Payday loans in Ontario: 2026 guide

Updated 2026-10-29 · We are not a lender. Free referral service.

Ontario has one of the most detailed payday-lending regimes in Canada, under the Payday Loans Act, 2008. Combined with the federal changes of 2025, here is what applies to Ontario borrowers in 2026.

The key rules

• Maximum cost: $14 per $100 borrowed (federal cap; Ontario’s own regulated maximum was previously $15, so the lower federal limit now governs).
• Maximum amount: 50% of your net pay per pay period, and no more than $1,500 under the federal exemption.
• Term: 62 days or less.
• Cooling-off: two business days to cancel without cost.
• No rollovers: a lender cannot extend or renew a payday loan with new fees, or lend you a second one while the first is outstanding.
• Extended payment plan: if you take three loans from the same lender within 63 days, you are entitled to an extended repayment plan.
• Licensing: lenders and brokers must be licensed by the province. You can search licensees through Ontario’s consumer protection service at ontario.ca.

Full cost examples

Use the calculator for your own figures.

Before you sign in Ontario

1. Check the lender’s Ontario licence.
2. Read the agreement: it must show the amount, total cost, APR and due date.
3. Make sure the due date is after your next payday.
4. Remember your two-day cancellation right.

Cheaper Ontario options to consider

• Ask a utility like Ontario hydro providers or your gas company about payment arrangements and the Ontario Electricity Support Program (OESP).
• Community and municipal emergency funds; call 211 Ontario.
• Credit union small-dollar loans.
• Free non-profit credit counselling.

On ODSP or Ontario Works? Read Loans on EI, CPP or ODSP first.

Step by step: borrowing in Ontario

1. Find the lender’s Ontario licence (search on ontario.ca or ask for it).
2. Calculate 50% of your net pay; the loan can’t exceed it.
3. Check the cost: no more than $14 per $100.
4. Read the agreement for the total, APR, due date and default charge.
5. Keep a copy and note the two-business-day cancellation deadline.

Example: a borrower paid every two weeks

Net pay of $1,300 every two weeks means a maximum payday loan of $650. Borrowing $650 for 14 days costs at most $91, for $741 total. If $741 leaves too little for rent and food on payday, a smaller loan or an alternative is safer.

Municipal licensing

Several Ontario municipalities also license or restrict where payday loan stores can operate. This affects storefronts more than online lending, but a licensed online lender must still meet provincial rules.

Common mistakes in Ontario

• Using two lenders at once to get more than 50% of net pay.
• Missing the two-business-day cancellation window.
• Accepting a “new loan” to pay the old one; Ontario restricts this for good reason.
• Not asking about the extended payment plan after repeated loans.

What your Ontario agreement must show

• Lender’s name, address and licence number
• Amount borrowed and total cost of borrowing in dollars
• Cost expressed as an APR and per $100
• Due date and how to repay
• Your cancellation right and how to use it
• Default charges

Ontario also requires lenders to display certain information prominently, including the cost of borrowing. If anything is missing, ask before signing.

If you already owe several lenders

Ontario borrowers with multiple payday loans can get free help from non-profit credit counselling agencies, which may negotiate with lenders on your behalf. Before taking another loan, list every debt with its due date and amount. Seeing the full picture often makes it clear that a new loan would only move the problem forward by two weeks.