What is a Payday Loan Company?

Payday loans in Canada are restricted by Usury Laws. The Criminal Code of Canada dictates that any interest rate charged above 60% every year is a criminal offense.
The Payday Loan Company in Canada provides fast and easy-term loans for employees.
This article discusses the business status of payday loan companies, the benefits of payday loans and

What is the Status of Payday Loan Companies?

There is widespread clamour for short term and quick pay-off payday loans in the country. This is the reason why payday loan companies in Canada are thriving. The payday loan company in Canada makes money by lending short term, but high interest payday loans to citizens with regular compensation. The high interest rates are understandable since these lenders do not conduct credit checks or ask for documents or down payments.

Employees and workers apply for payday loans from these unorthodox lenders and pay it off together with the interest as soon as they receive their pay-cheques. It is easy to apply for and is a profitable business for the lending company. Statistics reveal that the average loan amount for the payday loan is $280 for a period of 10 days. Most of payday loan companies in Canada take a post-dated check from the borrower covering the principal amount plus the interest. Another option is for the borrower to authorize the lender to withdraw the amount from his or her account.

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What are the Benefits of Payday Loans?

• Processing time is very fast and can be done online or over the telephone. The money is credited to the borrower’s account within an average of 24 hours.


• The procedure is relatively simple and people in need of fast cash are benefitted by this scheme.

Payday loans have become very popular in Canada. In Edmonton, Vancouver, Toronto, Calgary, Montreal, Ottawa and other cities and towns, there are Canadian pay day loan lenders ready to charge a fee to help you out of a tight, emergency quick cash situation. One of the latest issues being raised about the Canadian payday loans is the question about existing regulations. The Canadian payday loan industry has uncovered a new code of conduct to protect Canadian payday loan consumers and their money. Canadian payday loans are offered to people as a form of short-term loans. The idea behind this is to help thousands of customers to bridge the gap between pay cheques. Canadian quick cash advance payday loan amounts typically range from $100 to $2000. Interest rates can cost $15 to $25 for every $100 within a week. This condition may sound safe. However, if you borrowed $200 for seven days at a cost of $50, it translates into an Annual Percentage Rate (APR) of more than 1,300 percent. It is a good emergency solution but should not be utilized regularly.

Pls Refer To: wikipedia.org

What are Canadian Laws regarding Payday Loan Interest Rates?

In 2006, the Criminal Code of Canada was amended to allow provincial governments to standardize the payday loan industry. Since November 1, 2009, the Payday Loans Regulation has been enforced in British Columbia. The maximum charges for short term loans were limited to 23% of the principal (including interests and fees). the borrower can cancel the loan by the end of the following day of signing the agreement without paying any charge, only 1 loan per borrower at a time is permitted, and the lenders ability to access the borrower's bank or employer has been restricted. In addition, lenders are prohibited from lending more than 50 percent of a borrower's take-home pay or requiring repayment before the borrower's next payday. All lenders are required to register and are regulated under the Business Practices and Consumer Protection Authority (Consumer Protection BC).

In June 2010, the government of Saskatchewan announced regulations on payday loans similar to those in British Columbia. They include an interest rate cap of 23% of the principal, a cap of 30% on a defaulted loan, and a borrowing limit of 50% of the net amount of the individual's next pay. Companies offering payday loans will be charged a licensing fee of $2,000 per location.

A Case of Prudence

Employees should exercise prudence in terms of availing Payday Loans. Precaution must be exercised to avoid being buried in debt. It is also important to find out laws regarding interest rates for payday loans as a form of protections against lenders who want to take advantage of unsuspecting employees.