Usury practices in Canada began receiving close scrutiny 2008. Payday lenders in the United States were targeting Canadian borrowers because Canada was less regulated. When it was learned that online payday lenders were charging higher fees and interest rates in Canada, the Canadian Legislature passed usury regulations and put caps on the amount of interest and fees that Canadian payday lenders can charge. Specific payday loan rates and fee regulation was then left to each province to determine what their rates and charges would be.

Payday loans in the province of Saskatchewan cannot charge rates plus charges that are higher than 23 percent of the principal balance of the loan. Most payday lenders in this province charge on a descending scale, beginning with 17 percent interest on the first $500, 15 percent on the next and 6 percent on loan amounts $1,000 or over. Fees will vary from one establishment to another, with no fees / interest being more than 23 percent of the total balance of the loan.

Each payday lender in Saskatchewan follows an efficient licensing system. This system requires to lenders to obtain a separate license for each location even if they are associated with the same company. Payday lenders in Saskatchewan are prohibited from charging any fees when the loan is renewed or extended.

Ontario payday loans are comparable to payday loans in the province of Saskatchewan. Ontario’s payday loan interest rate cap is 21 percent of the principal balance. Ontario has also passed new laws limiting the amount that a borrower can be loaned, and this lending amount is based on a borrower’s income. There is no charge to extend a payday loan in Ontario.

Although payday loans for Canada are better regulated for the protection of the consumer, payday loans in the province of Saskatchewan have the most comprehensive licensing system.

When people need money in a hurry, a payday loan can be very helpful. It is a short- term loan, and it doesn’t require a loan committee’s approval as bank loans do. This means that approval in a payday loan is quick and easy. If borrowers want to extend their loan for another two weeks, they can do so for no additional fee if they notify the payday lender a few days before payment is due. With the new payday loan legislation, Canada’s payday loans are a reliable, trustworthy source of emergency loan funds.