Payday Loans

We know how hard it can be to pay your bills when you’re running short on cash and you’re between paydays. You’re uncertain of what to do and so to overcome this shortage, you turn to a cash advance from one of the many payday loan providers, just to tide you over until your next paycheque.

But, what you may not realize is that this loan can end up costing you considerably more than what you borrowed. In fact, it’s the most expensive way to borrow money. We know it can be a stressful experience trying to pay off payday loans, so the following information is provided to help you better understand payday loans, how they work, their risks, and what you can do to repay them without running into trouble.

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What do I need to know about the costs of a payday loan?

The cost of a payday loan varies, depending on the company, but fees charged normally include:

  • Interest charges
  • Initial or one-time setup fees
  • Rollover fees
  • Processing fees
  • Early or late repayment fees
  • Convenience charges
  • Verification fees
  • Broker and collection fees

The estimated interest rate on a payday loan is slightly less than 600% each year! When it’s combined with fees, it will cost you well over what was initially borrowed.

As well, if you have an outstanding payday loan, the issuing company may extend the loan for a fee. It may also grant a new loan to pay off an existing one, called a rollover, which can keep you in a seemingly never-ending loan repayment cycle.

How can I stop the cycle of payday loans?

If you are caught in payday loan rollovers, or you are relying on them to make it to your next paycheque, you might consider the following to take back control of your finances:

You can create an affordable repayment plan to pay back your unsecured debts, including a payday loan, with a consumer proposal. Learn more about the consumer proposal process by visiting our Consumer Proposals page. Keep in mind that neither a debt management plan (DMP) or debt settlement plan have the ability to resolve your payday loan obligations, as they are not court authorized debt solutions and payday loan lenders will rarely recognize them.


You may also speak to one of our local debt professionals, who will assess your financial situation for free, with no obligation and walk you through your options to paying off a payday loan. You can request a call by filling out our online form. No matter your debt concerns, we’re here to help.

In addition to self-help options, our Trustees will walk you through formal solutions for debt control like a debt consolidation loan, a debt management plan, a debt settlement plan, and a consumer proposal to find the option that works best for your financial situation. We look at filing for bankruptcy after exploring all your other options first.

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Licensed Insolvency Trustees Since 1958