How does a payday loan work?
Most payday loans must be repaid within 14 to 28 days. If your loan is longer than 62 days different rules apply. Those rules are not covered in this resource.
When you apply for a loan, lenders can ask for:
- proof you have regular income from a job, a pension, OW, or ODSP
- proof of your address, for example, a utility bill
- your bank account details
They cannot ask for:
- collateral, which is something valuable you give them that they keep if you cannot repay the loan
- a guarantor, who is a person who must repay the loan if you do not
A lender can ask your employer to confirm details of your employment, but cannot contact anyone else.
Lenders cannot give you another loan until you have paid off your first loan.
Previous page Next page