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Ontario Reducing the Cost of Borrowing for Payday Loans

Archived News Release

Ontario Reducing the Cost of Borrowing for Payday Loans

Further Changes Proposed to Help Protect Consumers

Ministry of Government and Consumer Services

Ontario is lowering the maximum total cost of borrowing for a payday loan from $21 to $18 per $100 borrowed as of January 1, 2017.

Payday loans are a commonly used financial service in Ontario, and this change will ensure consumers are better protected and able to benefit from lower costs for each loan.

Ontario has also introduced legislation to strengthen protections for consumers who use financial services such as payday loans, instalment loans, rent-to-own services and cheque-cashing services, as well as for consumers who have debts in collection.

If passed, the Putting Consumers First Act, would increase protections for consumers in several new ways, including:

  • A grace period for repayment for consumers using rent-to-own services 
  • An extended repayment period option for consumers who are repeat payday loan borrowers 
  • Establishing standards or factors that payday lenders must take into account when determining a borrower's ability to repay
  • Restrictions on high-frequency borrowing
  • Adding and improving compliance and enforcement powers to address unlicensed lenders and loan brokers

Strengthening consumer protection is part of our plan to create jobs, grow our economy and help people in their everyday lives.

Quick Facts

  • Alternative financial services are any financial service offered by a party other than a bank or a credit union.
  • There are over 800 licensed payday lenders and loan brokers in Ontario.
  • The majority of calls and inquiries to the Ministry of Government and Consumer Services are about debt collection.

Additional Resources


“Our government is committed to protecting consumers and helping people in their everyday lives. This includes lowering the cost for taking out a payday loan, and further changes to ensure that financial services are fairer and more transparent for all.”

Marie-France Lalonde

Minister of Government and Consumer Services

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