What does a payday loan cost in Ontario?
$14 for every $100 you borrow — the maximum total cost of borrowing allowed in Ontario, with worked examples and the APR at each term.
A payday loan in Ontario costs $14 for every $100 you borrow. That is the maximum total cost of borrowing permitted under the Payday Loans Act, 2008, it is what we charge, and there is nothing on top of it.
The figure changed on 1 January 2025. Before that date the cap was $15 per $100, and a great many articles, comparison sites and older lender pages have never been updated. If you see $15 quoted for an Ontario payday loan taken out today, the source is out of date.
What it works out to
| You borrow | Cost of borrowing | You repay |
|---|---|---|
| $100 | $14 | $114 |
| $300 | $42 | $342 |
| $500 | $70 | $570 |
| $1,000 | $140 | $1,140 |
| $1,500 | $210 | $1,710 |
The arithmetic never changes: the amount you borrow multiplied by 0.14. You can run your own figure through the calculator on our rates and fees page before you apply.
What the total cost of borrowing includes
This is the part that matters. The $14 is not an interest rate with fees to be added later. It is a cap on the total cost of borrowing, so it has to absorb every charge connected to the loan: interest, application handling, administration, brokerage, the cost of sending you the money. A lender that charges $14 per $100 and then adds a $25 “processing fee” has broken the cap and is breaking the law.
So there is:
- No application fee
- No processing or administration fee
- No broker fee
- No fee to receive your funds by Interac e-Transfer
- No penalty for repaying early
- No fee for an extended payment plan
Why the APR looks so large
Ontario requires the cost of a payday loan to be expressed as an annual percentage rate, and on a two-week loan that number is 365%.
It is not a second charge. It is the same $14, annualised. At the cap, the APR is simply 14 x 365 divided by the number of days in the term:
- 14 days — 365%
- 30 days — 170.33%
- 62 days — 82.42%
On a $500 loan repaid in 14 days you pay $70, not 365% of anything. The APR exists so that you can hold this loan up against a credit card at 22% or a credit union loan at 12% and see, honestly, what short-term borrowing costs. Compared on that basis, a payday loan is one of the most expensive forms of credit available. That is the point of publishing the number.
The only charges that can ever be added
Two, both capped, both only if a payment fails:
- Default interest — a maximum of 2.5% per month, non-compounding, on the outstanding principal only.
- A dishonoured payment — a maximum of $20, whatever our bank actually charges us.
No other default charge is permitted in Ontario. Not a “collection fee”, not a “rescheduling fee”, not a second NSF charge on the same loan.
Repaying early, and changing your mind
You can repay early at any time with no penalty. Because the $14 per $100 is a fixed cost of borrowing rather than interest that accrues day by day, paying three days early does not reduce it.
Cancelling is different. You can cancel a payday loan up to the end of the second day after the lender gives you your agreement and your advance — rolled to the next day they are open, if they are closed on that second day — without giving a reason. Return the amount advanced and the cost of borrowing disappears entirely — you pay nothing. That right belongs to you by statute, and no agreement can sign it away.
