COVID-19: Get updates on the law and legal services on Steps to Justice

Change font size:


  • Increase
  • Decrease
  • Normal

Current Zoom: 100%

Payday loans

Step 1: Choose language Step 2: Choose from available formats and options
Available formats and options

What if I can't repay the loan?

If you can't repay the loan on time, the lender can add late fees and other charges to your loan. They can also charge interest for the time after your payment was due. This can be up to 60% as an annual interest rate.

These extra fees will make the loan even more difficult to pay off. Your bank will probably also charge you a fee if there was not enough money in your account to cover the payment.

The payday lender may send your file to a collection agency, which will affect your credit score and make it harder to get loans in the future.

The lender can also sue you in Small Claims Court. If the lender wins in court, the court might allow them to take some of your money or property. The court might also allow the lender to take money directly from your paycheque. This is called "garnishing your wages".

If you can't repay the loan on time, it is best to talk to the lender to try to work out a new payment plan. But the lender is not allowed to give you a new loan until the first one is paid off.

Rules for lenders if you don't repay the loan

If your loan is in default – which means you have missed a payment – the lender may contact you by phone or even in person. Lenders can contact you only on Mondays to Saturdays from 7 a.m. to 9 p.m. and Sundays from 1 p.m. to 5 p.m. They are not allowed to contact you on statutory holidays or more than 3 times during any 7-day period.

They are not allowed to threaten or swear at you, try to bully you into paying, or harass you.

If the lender cannot get in touch with you, they may call your friends, family, and employer to try to find out how to reach you. But they are not allowed to ask these people anything else or give them any information about your loan.