Responsibility of using online short term loans
When a borrower is applying for payday loans, then it is prior duty of user to understand responsibility for accessing them. Consuming these loans is a very responsible task. Understand the risk that misbehaving like non repayment or showing false personal details will directly lead to credit risk. To avoid this, a borrower can take wise decision of borrowing that much amount only which can satisfy current financial requirement. The user should be ensured of repayment after 14 days period of loan disbursement. These loans come with higher risk factors for lenders as compared to other short term loans that are why repayment implications are very strict here.
Interest Rate Implications for Payday Loans
Online short term loans offer instant cash help in utmost economic needs to the borrowers. So, it is very obvious that they definitely cost something. That cost includes interest rates capped by Canadian legislation. These interest rates along with loan fee together forms APR (Annual Percentage Rate) which is currently set to 60% as per Canadian regulation. Our network of lenders strictly follows this but you have to make sure that you must be able to payback this much with principal amount.
Payday Loan Interest Rate Implications according to province
Canadian legislation has also stated that interest rates and fee for short term loans vary from state to state. The list is as follows: -
1. Alberta- In Alberta, maximum amount can be lend up to $1500 and the repayment schedule falls on borrower’s next salary day. The loan is set to 2.5% per month. There can be additional charges of $25 in case of non-sufficient funds.
2. British Columbia- For default loans, monthly charges are up to 30%. In case of NSF, extra $25 is asked and these charges can be made for two times at maximum.
3. Saskatchewan- In Saskatchewan too, payday loan cost is set up to 30% and extra charges in case of NSF can only be obtained once.
3. Nova Scotia- One day past default loans are charges up to 59% per annum and extra cost of $40 can be charges in case of non-sufficient funds.
4. Prince Edward Island- Maximum administration fee is set to $50 one day after due date. The total penalty cannot exceed $50 irrespective of the number of instances.
5. Northwest Territories- Default loans are charged to 59% per annum. Administration fees of $50 is charged after one day past of due date.
6. New Brunswick- Additional charges of $40 can be charged in case of NSF, however default loans can be charged to maximum of 30% per annum.
7. Newfoundland and Labrador- 59% is charged for default payday loans. $40 penalty fee is added to loans that has passed one day after due date.
Representative Example for APR
Consider that borrower is borrowing $300 in British Columbia and is supposed to pay back after 2 weeks, total charges for this principal amount will be 62.94$. APR is fixed to 599.12% in this case that can be translated into interest rate of 22.98%. Calculation of APR however considers various factors like loan period, interest rate and repayment method.
On the other side of the borrower is borrowing same amount in Ontario then total charges would be 62.94% at fixed interest rate of 20.98% resulting in APR of 546.98%. So expected repayment amount will be $362.94.
We, hereby suggest you that know about interest rates and other costs thoroughly before submitting loan application. If you need to know anything else than above, then feel free to contact us anytime.
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