Ontario lowered its maximum payday lending fee from $21 per $100 to $15 per $100 in 2018, becoming one of the strictest provincial caps in Canada at the time. Even at this reduced rate, a typical two-week payday loan still works out to roughly 391% APR when annualized. You can read the official rules and current consumer protections on the Financial Consumer Agency of Canada (FCAC) website.
Quick summary
- Payday loans in Ontario are short-term loans of $100 to $1,500 capped at $15 in fees per $100 borrowed, the lowest mainstream cap among major Canadian provinces.
- A $500 loan costs $75 in fees ($575 to repay); use the Cashero payday loan calculator to see the exact cost for any amount.
- Ontario law gives you a two-business-day cooling-off period to cancel without penalty, plus protection against rollovers and unlimited NSF fees.
- Every legitimate Ontario lender must hold a provincial payday loan licence and display it clearly; if you cannot find a licence number, do not apply.
- Compared to a credit card cash advance ($5 for the same $500), a payday loan is roughly 15× more expensive, see our responsible lending guide for cheaper backup options.
- Cashero is a comparison service, not a lender; we help you see the real cost before you commit to any provider.
What is a payday loan in Ontario?
A payday loan in Ontario is a short-term, small-dollar loan, typically between $100 and $1,500, designed to be repaid on your next payday (usually 14 days). The loan is provided by a licensed payday lender, regulated under Ontario’s Payday Loans Act, 2008, and capped on what the lender can charge in fees.
Unlike a bank loan, the application is fast (often minutes online) and the lender places less weight on your credit score, focusing more on income and banking history. The trade-off is cost: the regulated maximum is $15 in fees for every $100 borrowed, which annualizes to roughly 391% APR over a typical two-week term.
Cashero is not a lender. We are an independent comparison service that helps Ontario residents review licensed payday lenders, see real costs side by side, and check cheaper alternatives before signing anything. To see how the comparison process works, visit our how it works guide.
Ontario’s payday loan rules at a glance
Ontario has some of the strongest consumer protections for payday borrowers in Canada. Every licensed lender must follow these rules:
- Maximum fee: $15 per $100 borrowed (lowered from $21 in 2018).
- Cooling-off period: two business days after signing, during which you can cancel and return the principal at no cost.
- No rollovers: a lender cannot extend your loan by charging a new fee. To borrow again, you must fully repay the existing loan first.
- Concurrent loans: a lender cannot issue you a second loan while a first one is outstanding with them.
- NSF fee cap: if a payment fails, the lender’s NSF charge is capped at $25 in addition to your bank’s NSF fee.
- Default interest cap: any default interest is also limited under provincial rules.
- Mandatory licensing: every lender must hold a provincial licence and display the licence number on its website and in its agreement.
How much does a payday loan in Ontario cost?
The simplest way to think about Ontario payday loan costs is the formula: $15 × (loan amount ÷ $100). That fee, plus the loan principal, is what you’ll repay on your next payday.
| Loan amount | Fee at $15 per $100 | Total to repay |
|---|---|---|
| $200 | $30 | $230 |
| $300 | $45 | $345 |
| $500 | $75 | $575 |
| $750 | $112.50 | $862.50 |
| $1,000 | $150 | $1,150 |
| $1,500 | $225 | $1,725 |
$500 Ontario payday loan · 14-day term
Important note: $15 per $100 is the maximum Ontario allows, not a minimum. Some lenders charge less, especially for first-time borrowers or returning customers in good standing. Comparing two or three licensed Ontario lenders before applying is one of the easiest ways to lower your fee.
Who can qualify for a payday loan in Ontario?
Most Ontario lenders share a similar set of eligibility checks. You generally need to meet all of the following:
Meeting the basic criteria does not guarantee approval. Ontario lenders run their own affordability checks on income verification, banking history, and any existing payday loans you may have elsewhere before deciding.
How to apply for a payday loan in Ontario
The Ontario application process is short, mostly online, and follows a predictable path with any licensed lender.
Compare licensed Ontario lenders first
Use the Cashero calculator to see your exact cost, then check at least two lenders’ fee schedules side by side before committing.
Apply on the lender’s website
Submit basic personal info, income source, banking details, and proof of address. Most decisions arrive within minutes during business hours.
Review and sign the agreement
Confirm the principal, fee, total repayment, and due date. By Ontario law, all of these must be shown clearly in dollars before you sign.
Receive the funds
Online lenders typically send funds via Interac e-Transfer within 5 to 30 minutes. Storefront lenders issue cash or cheque the same visit.
Repay on your next payday
The lender uses pre-authorized debit (PAD) to withdraw the full repayment on the agreed date. The loan is then closed.
NEWHow to choose the right Ontario lender
Once eligibility is sorted, the lender you pick is the single biggest factor in what your loan will cost and how smoothly the experience will go. Use these four checks to narrow your options.
- Confirm the Ontario licence: the licence number must appear on the lender’s website. If absent, do not apply, even if everything else looks polished.
- Compare the fee, not just the speed: $15 per $100 is the cap, not the floor. Some lenders charge less, especially for returning customers in good standing.
- Check the agreement preview: a legitimate Ontario lender shows the full agreement, with dollar costs, before asking you to sign.
- Look at customer reviews carefully: filter for issues around hidden fees, NSF practices, and collection behaviour, more useful than five-star praise. For broader guidance, see our Why Cashero overview.
NEWRed flags: payday loan scams targeting Ontarians
Most licensed Ontario lenders operate fairly within the rules. A small number of online operators do not. If a lender or website does any of the following, walk away.
Asks for money up front
A legitimate Ontario lender deducts fees from your repayment, never before sending the loan. Anyone asking for “insurance” or “processing” payments first is running a scam.
No Ontario licence number visible
Licensed lenders must display their licence number. If a website hides it or claims they don’t need one, do not share your details.
Demands your online banking password
No legitimate Canadian lender will ever ask for it. Read-only banking-portal connections (such as Plaid) are different and acceptable.
“Guaranteed approval, everyone qualifies”
No real lender can promise this. A responsible Ontario lender always runs an affordability check first. See our complete FAQ for what to expect.
Cheaper alternatives worth checking first
Before applying anywhere, it is worth spending a few minutes on the alternatives below. Most Ontarians who do this find at least one cheaper path they hadn’t considered.
Far cheaper than a payday loan; interest accrues from day one but rates are typically 22 to 28%.
Many Ontario chequing accounts include overdraft for short gaps; significantly less than payday fees.
Many Ontario credit unions offer small personal loans at much lower rates than payday lenders.
Some employers will advance part of your pay against your next cheque, with no interest.
Utilities, telecoms, and landlords often offer payment extensions if you ask before the bill is due.
The Credit Counselling Society offers free guidance on debt and budgeting.
Frequently asked questions
How much does a payday loan cost in Ontario?
Ontario caps payday lender fees at $15 per $100 borrowed. So a $300 loan costs $45 in fees ($345 total), a $500 loan costs $75 ($575 total), and a $1,000 loan costs $150 ($1,150 total). When annualized over a typical two-week term, this works out to roughly 391% APR.
Who can get a payday loan in Ontario?
To qualify in Ontario, you typically need to be 18 or older, an Ontario resident with a valid address, have a recurring source of income (employment, EI, pension, or other), and hold an active Canadian chequing account. Each licensed lender runs its own affordability and identity checks before approval.
Are payday loans regulated in Ontario?
Yes. Ontario regulates payday lending under the Payday Loans Act, 2008. Every lender must hold a provincial licence, follow the $15 per $100 fee cap, honour a two-business-day cooling-off period, and limit collection practices. The province publishes a public registry of licensed lenders.
How fast can I get a payday loan in Ontario?
Online Ontario lenders typically fund approved loans by Interac e-Transfer within 5 to 30 minutes during business hours. Storefront loans are usually issued the same visit. Approvals at night or on holidays may fund the next business day.
Can I cancel a payday loan in Ontario after signing?
Yes. Ontario law gives borrowers a cooling-off period of two business days after signing. During this window, you can cancel the loan and return the principal in full at no cost. Lenders cannot charge you any fee for using this right.
What happens if I cannot repay my Ontario payday loan?
If a payment fails, your bank charges an NSF fee (about $45 to $50), and the Ontario lender can charge an additional NSF fee capped at $25. Default interest accrues on the unpaid balance. After 30 to 60 days, the file may be sent to collections, which can affect your credit score. See our responsible lending guide for what to do.
The bottom line
Payday loans in Ontario solve a real problem, fast cash for a one-time shortfall, but the cost is significant: $15 per $100 in fees, or roughly 391% APR for a typical two-week loan. The province’s strong rules, including the cap, the cooling-off period, and the licensing requirement, give Ontario borrowers more protection than in most provinces, but they don’t change the math on the underlying cost.
If you’ve weighed the alternatives and a payday loan is still the right fit for a one-time need that your next paycheque can comfortably absorb, comparing two or three licensed Ontario lenders is the simplest way to keep costs as low as legally possible.
See your exact Ontario payday loan cost
Compare costs by amount and term across licensed Ontario lenders, before you commit.