Payday loan alternatives in Canada
Quick summary
A $300 payday loan for 14 days costs about $42 in fees. A line of credit costs about $6 in the official example. Ask for more time on a bill, or ask your employer for a pay advance, before you borrow. Next step: read the risks of payday loans.
Checked November 2, 2026. Main source: Financial Consumer Agency of Canada, Payday loans. Checked November 2, 2026.. See all 2 sources.
What a payday loan costs
A payday loan is a short-term loan with high fees. In Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan, the most a lender can charge is $14 per $100 borrowed.
The Financial Consumer Agency of Canada compares the cost of borrowing $300 for 14 days. The card, overdraft and line of credit amounts use the agency's own assumptions.
| Way to borrow $300 for 14 days | Cost | Assumption |
|---|---|---|
| Payday loan | $42.00 | $14 per $100, about 365% a year |
| Credit card cash advance | $7.65 | $5 fee and 23% yearly interest |
| Overdraft protection | $7.42 | $5 fee and 21% yearly interest |
| Line of credit | $5.92 | $5 fee and 8% yearly interest |
Source: Financial Consumer Agency of Canada, Payday loans. Checked November 2, 2026.
Alternatives to try first
- Ask the company you owe for more time to pay the bill.
- Cash in vacation days.
- Ask your employer for a pay advance.
- Borrow from family or friends, and agree on the terms in writing.
- Ask a bank or credit union for a loan or line of credit.
- Use a credit card cash advance, if you have one and can repay it fast.
- Use overdraft protection on your chequing account.
- Ask for a payment deferral, such as a mortgage payment deferral or a credit card payment holiday.
Source: Financial Consumer Agency of Canada, Payday loans. Checked November 2, 2026.
What happens if you miss a payday loan payment
- Example from the agency: borrow $300 for two weeks and owe $342. Missing the payment adds a $20 penalty, so you owe $362.
- Interest may keep growing on what you owe.
- Your bank may charge a bounced payment fee, and so may the lender.
- The debt may go to a collection agency and show on your credit report. The lender or collector may sue.
Source: Financial Consumer Agency of Canada, Payday loans. Checked November 2, 2026.
If you are already in a payday loan cycle
The agency says a financial advisor, an accredited credit counsellor, or a licensed insolvency trustee can help. It says their advice is confidential, non-judgmental and often free.
See what a loan costs in total
Enter the amount, the rate, the length and any flat fee from an offer. The total you repay is the number to compare.
You borrow $1,000 and repay $1,117 in total.
That is $93.11 a month. The interest alone is $117.
Every $1 you borrow costs $1.12 to repay. The cost of borrowing is $117.
Nothing you type here is saved or sent. These are estimates. Your lender's contract is the final word, and it may add fees or insurance.
Questions people ask
What can I use instead of a payday loan?
Ask for more time on a bill, cash in vacation days, ask your employer for a pay advance, borrow from family, or ask a bank for a loan, line of credit or overdraft.
How much does a payday loan cost in Canada?
In most provinces, up to $14 per $100 borrowed. For $300 over 14 days that is $42.
Is a line of credit cheaper than a payday loan?
In the agency's example, $300 for 14 days costs $5.92 on a line of credit and $42 on a payday loan.
What if I cannot repay a payday loan?
Fees and interest can grow, the debt can go to collections and show on your credit report, and the lender can sue. Talk to a credit counsellor or a licensed insolvency trustee.