Can You Get A Payday Loan In British Columbia?
If you’re short on cash and need quick access to money, you may consider a payday loan in British Columbia. These are short-term loans for small amounts, usually no more than $1,500. Unlike a standard installment loan, a payday loan must be repaid in one lump sum, typically by your next paycheque. Given how quickly you need to repay the loan and how expensive they are, payday loans in BC should only be considered if you’re confident you can repay the loan in full when it’s due.
What To Expect When Taking Out A Payday Loan
If you’re facing a financial emergency, a payday loan can be a quick fix. But while these short-term loans are easier to qualify for than traditional personal loans, they come with steep costs and tight repayment windows. Here’s what you need to know about these loans:
| Loan Amounts | Payday lenders in BC provide up to $1,500. |
| Repayment Term | The loan must be repaid in full — including principal and fees — in a single lump sum. Typically, this falls on your next payday, but repayment terms may extend up to 62 days. |
| Cost | Expect to pay $14 for every $100 borrowed. That adds up fast and makes payday loans one of the most expensive borrowing options on the market. |
| Speed Of Access | One major perk is speed of funding — many lenders offer same-day approval with funds delivered via e-transfer for near-instant access. |
Here’s What You Need To Get A Payday Loan
To be eligible for a payday loan in BC, you must meet the following basic requirements:
- Be at least 19 years old (age of majority in BC)
- Have a steady source of income (some lenders may accept alternative income sources, including pensions (private and government pensions), disability benefits and other government support payments.
- Have an active chequing account
| Do I Need Good Credit? No, most payday lenders accept bad credit. In fact, many do not conduct a credit check. This means even those with poor credit histories may still qualify, as lenders primarily focus on your current income and ability to repay. |
Where Can I Find Licensed Payday Lenders In BC?
Lenders offering payday loans to consumers in BC, including in-person and online, must be licensed in the province. Before applying for a payday loan, make sure the lender is properly licensed in BC.
To help you find out whether a lender is licensed, you can search the Consumer Protection BC database.
Here are a few licensed payday lenders in BC to help you begin your search:
Where Can I Find A Payday Lender In Vancouver?
Here are a few locations where you can apply for a payday loan in Vancouver:
| CashMoney | – 4676 Main Street Suite 201, Vancouver, BC V5V 3R7 – 2390 East Hastings St, Vancouver, BC V5L 1V5 – 1251 Main Street, Vancouver, BC V6A4G5 Find a location near you with this CashMoney branch locator. |
How To Apply For A Payday Loan
When you’re ready to apply for a payday loan in BC, follow these steps:
- Step 1: Choose A Lender. Use a lender that’s licensed in BC to ensure you’re treated fairly. You may also want to compare lenders online, which you can do quickly and easily using an online loan comparison platform like Loans Canada.
- Step 2: Apply. You can apply for a payday loan either online or in person. You’ll need to provide various personal details such as your name, address, and contact information and financial information such as your income and employment.
- Step 3: Review The Loan Agreement. If approved, carefully read the terms of the loan contract before signing.
- Step 4: Receive Your Funds. Once approved, funds are typically sent via direct deposit, Interac e-transfer, cash, or prepaid card.
| Note: Many payday loan lenders do not require documents to prove income or employment. Instead, they’ll use instant bank verification (IBV). It is a secure digital process that provides lenders with read-only access to your bank statement through a trusted third-party service such as Plaid. IBV speeds up approvals, reduces fraud risk, and is commonly used for loans in BC. |
Your Rights As A Payday Loan Borrower In BC
As mentioned, payday lenders are required to follow specific payday loan regulations under the Business Practices and Consumer Protection Act. To ensure that you’re treated fairly by a payday lender in BC, get familiar with the following rules that lenders must follow when providing payday loans:
| Loan Amounts | Up to $1,500 (no more than 50% of borrowers’ paycheque) |
| Loan Terms | No longer than 62 days |
| Cost Limits | Maximum fee of $15 per $100 borrowed |
| Cooling-Off Period | 2 business days |
| Rollovers | Not permitted |
| Disclosures | – Statement that payday loans are high-cost loans – Borrower’s cancellation rights – Total amount owed, including interest and all fees – Date that each payment is due |
| Lender Licensing | All payday lenders in BC must be licensed in the province |
| Default Charges | – Interest up to 30% per annum, on the outstanding principal in default – NSF charge up to $20 |
What If You Don’t Pay Back Your Payday Loan?
When you take out any type of loan, including a payday loan, you’re required to pay it back by the due date specified in your loan contract. If you miss your payment due date, you could face certain consequences.
That said, there are rules and limitations that payday lenders must abide by when it comes to the types of penalties they impose on borrowers who are late making payments:
| Maximum Penalty Fees | Up to 30% of the default amount per year |
| Maximum NSF Fees | Up to $20 for bounced cheques or pre-authorized debit |
| Collections Actions | Lenders may not: – Harass you or your family in an effort to recoup overdue payments – Communicate with you until at least 5 days after the collection agency sends you written notice about your overdue debt – Communicate with your employer as a means of reaching you, with certain exceptions – Contact you outside business hours or on weekends/holidays |
How To File A Complaint Against A Payday Lender
If you feel that you’re being mistreated by your payday lender, you can file a complaint with Consumer Protection BC:
| By Mail | Consumer Protection BC PO Box 9244 Victoria, BCV8W 9J2 |
| By Telephone | 1-888-564-9963 |
| By email | operations@consumerprotectionbc.ca |
How Much Will You Pay For A Payday Loan?
As noted, the most a payday lender can charge for a payday loan is $14 per $100 borrowed. This is the equivalent of an APR of 365% (with a 2-week repayment period).
To help you get a sense of how much you could potentially pay for a payday loan in BC, we’ve listed a few loan amount examples and their associated costs in the chart below, assuming a 2-week repayment term:
| Loan Amount | Cost To Borrow | Total Loan Cost |
| $100 | $14 | $114 |
| $200 | $28 | $228 |
| $300 | $42 | $342 |
| $400 | $56 | $456 |
| $500 | $70 | $570 |
| $1,000 | $140 | $1,140 |
| $1,500 | $210 | $1,710 |
Learn more: Payday Loan Interest Rates
Things To Keep In Mind When Taking Out A Payday Loan
Before applying for a payday loan in BC, be sure to keep the following in mind:
- Watch Out For Scams: Some payday lenders are illegitimate, especially online. Some may promise fast cash with no checks, but then steal your personal info, charge hidden fees, or even drain your bank account. Always verify the lender and check online reviews or complaints before applying.
- Watch Out For Mounting Debt: Payday loans are notorious for their sky-high interest rates. Many borrowers can’t repay on time, so they reborrow to pay off what they owe, which can trigger a cycle of debt.
Is A Payday Loan Worth It?
Payday loans are risky and expensive, but there may be times when they might be a strategic choice, if you’re careful:
- Urgent, One-Time Expenses: There are times when an urgent expense comes up, like your car breaking down or a water leak in your home. In cases like these, a payday loan could bridge the financial gap.
- No Access To Traditional Credit: If your credit score is too low for a traditional loan, a payday loan may be the only option.
- You Can Cover Repayment: If you’re absolutely certain that you can pay back the loan on time and in full without relying on another loan soon after, the cost of a payday loan may be manageable.
Here Are Some Better Alternatives To Payday Loans
Considering how expensive payday loans are and how difficult it can be to repay them in such a short period of time, you may want to look at other options before applying.
Personal Loans
A personal loan is a type of loan that can be used for a variety of purposes and can be secured (backed by an asset) or unsecured (not backed by an asset). You’ll receive a lump sum of money that you pay back in fixed installments over a set term.
Small Credit Lines And Advances
Companies like Bree and Nyble offer small cash advances and credit lines that provide immediate access to cash when the need arises.
- Bree: Bree’s small cash advances are meant to help you steer clear of bank overdraft fees if your account is a bit short. No credit check is involved, and you can access up to $350.
- Nyble: Nyble’s small lines of credit are available for up to $150. No interest is charged, and repayments can be used to build a positive credit profile. You can pay back the money whenever you can with flexible repayment terms.
Can’t Keep Up With Expenses? Try Getting Debt Relief Instead
Relying on payday loans to deal with your recurring debt issues is unsustainable, expensive, and potentially dangerous. If you’re at risk of drowning in debt and are unable to get yourself out of the situation on your own, speak the a credit counselling agency for debt relief options:
| Debt Consolidation | Debt consolidation involves merging several debts into one loan or payment, often with a lower interest rate or easier repayment terms. The goal is to streamline debt management and reduce the cost of borrowing. |
| Debt Management Plans (DMP) | A DMP is a structured repayment program that involves negotiating with your creditors to reduce interest rates, eliminate late fees, and consolidate multiple debts into one payment. |
| Consumer Proposal | A consumer proposal is a legal debt relief option that can help reduce unsecured debt. It is a formal process administered by a Licensed Insolvency Trustee (LIT) who negotiates with your creditors to repay a portion of your outstanding balance, extend the repayment period, or both. |
| Bankruptcy | Bankruptcy is a legal process that helps to eliminate unsecured debt and is also administered by an LIT. You may have to surrender some assets to help repay creditors. It is often considered a last resort for dealing with unmanageable debt. |
Government Assistance Programs In BC
The BC government offers a few programs that provide financial assistance to residents experiencing financial difficulty:
Bottom Line
Payday loans can offer fast financial relief in an emergency situation, but they come with high costs and the potential to wind up in mounting debt. Before applying, be sure to understand the repayment terms and consider other options first.
