Payday loans: your rights

Payday lenders operating in Nova Scotia must be licensed and follow the rules set out in Consumer Protection Act and Payday Lenders Regulations. The act outlines your rights in relation to getting and paying back a payday loan.

By law, payday lenders can charge a maximum of $22 for every $100 borrowed. The maximum charge for a late payment is $40. They can charge you up to 60% interest (annual interest rate) if you pay late.

Payday loans are high-cost loans that serve as a short-term cash advance. They are usually due to be repaid with the next paycheck you receive.

Rates, fees and interest

Different lenders charge different rates, but not every lender charges the maximum allowable rate. A lender may charge a different rate if you're able to pay back the loan sooner.

If you cannot afford to make the full repayment with your next cheque, you may be faced with more fees and interest.

Transparency

The lender must have a sign in the place of business that shows the cost of borrowing. It is calculated on a $300 loan due after 14 days. The calculations must show the total that must be paid and the annual interest rate.

The lender cannot make you pay for any additional services (for example, a cash card, credit card, bank account, or insurance) before giving you a loan.

Read your agreement. Make sure that the amount you're signing for matches what you asked to borrow.