The payday loan cost in Canada is easier to work out than most people expect. Since January 1, 2025, federal rules cap it at $14 for every $100 you borrow, with every fee included. A $300 loan costs at most $42, and a $500 loan costs at most $70.
Below you’ll find how the cap works, a table for amounts from $100 to $1,500, why the APR looks so large, and the extra charges that can still catch you out.
How the payday loan cost cap works in Canada
The $14 per $100 limit covers interest, set-up fees, administration fees and anything else the lender charges to give you the loan. A lender can charge less, but not more. So the payday loan cost in Canada is easy to predict for a single loan. If you borrow $100, the most you repay is $114.
Also, because the cap is a flat rate per $100, the cost grows in step with the loan. $200 costs up to $28 and $400 costs up to $56. The Financial Consumer Agency of Canada has a plain-language summary of the rule.
The cap applies wherever payday loans are offered in Canada. They aren’t available in Quebec.
What a $300 payday loan costs
At the maximum rate, a $300 loan costs $42. You repay $342 on your due date, usually in one payment taken from your bank account. In Alberta, the law requires repayment in instalments, so the same $342 would be split across at least 42 days.
However, if a lender quotes more than $42 for $300, it’s charging more than the law allows.
What a $500 payday loan costs
A $500 loan costs up to $70, for a total repayment of $570. That figure is the ceiling. A lender that adds a separate “processing”, “insurance” or “membership” charge on top is going past the cap.
Payday loan cost table for Canada
These figures show the highest payday loan cost in Canada for a single loan at $14 per $100.
| You borrow | Maximum cost | Total to repay |
|---|---|---|
| $100 | $14 | $114 |
| $200 | $28 | $228 |
| $300 | $42 | $342 |
| $500 | $70 | $570 |
| $750 | $105 | $855 |
| $1,000 | $140 | $1,140 |
| $1,500 | $210 | $1,710 |
You can try your own amount and term in the payday loan calculator.
Why the APR looks so high
For example, payday loans often show up with an annual percentage rate of around 365%. The fee itself hasn’t changed. APR expresses the cost as if the loan ran for a full year, and a payday loan usually runs for about two weeks.
Here’s the maths. First, $14 on $100 is 14% for the term. A year has about 26 two-week periods, and 14% repeated 26 times comes to roughly 364%. You’ll only pay that much if you keep taking a new loan every payday for a year.
That’s the real risk with payday loans. Still, one loan has a fixed cost you can see in advance. A string of back-to-back loans means paying the fee again each time, and the total climbs quickly.
Extra charges to budget for
The $14 per $100 cap covers the cost of the loan itself. Two other charges can apply if your repayment bounces. The lender can charge a one-time returned payment fee, which provinces cap, usually at $20 or $25. Your own bank may also charge an NSF fee for the failed payment, and at the big banks that is often $45 or more.
If you think you’ll be short on the due date, contact the lender before it arrives. In Ontario and BC, taking a third loan within about two months means the lender has to offer you a longer repayment plan.
How the payday loan cost compares with other options
In general, the payday loan cost in Canada is higher than most other short-term borrowing. Paying $42 to borrow $300 for two weeks is more than a credit card or a line of credit would usually charge for the same period. Meanwhile, credit union loans and employer pay advances often cost less again.
Our guide to payday loan alternatives in Canada goes through six of them, and the responsible borrowing guide helps you decide what fits.
Before you apply
First, work out the exact cost for your amount. Then check that the lender is licensed in your province, and make sure the repayment fits your next paycheque. If a payday loan is still the right call, you can check your eligibility and see the full cost before you sign anything. Our guide to payday loan rules by province covers your cancellation rights.
