ST. JOHN’S, NL — Newfoundland and Labrador lowered the maximum cost of borrowing from a payday lender, making it the cheapest province in the country to get a payday loan.
Every $100 lent by a payday lender will now cost $14 in fees instead of $21. The new changes will take effect on December 15.
“The government recognizes that such credit products can help people in difficult situations, and it is important that payday loan customers are not taken advantage of,” said Sarah Stoodley, Minister for Digital Government and Services.
Payday loans are short-term loans under $1,500 that must be repaid within 62 days.
Newfoundland and Labrador began regulating payday loans in April 2019.
The provincial government is reducing the maximum total cost of borrowing for a payday lender, making NL’s cost of borrowing less. the lowest in the country. For more information – https://t.co/WMgCepXv8b #GovNL
– Digital Government and NL Service (@DGS_GovNL) September 26, 2022
Although the cost is coming down, Stoodley said payday loans aren’t the only option for those who need extra cash.
“I would recommend that clients who need short-term cash consider all of the financial options available to them and read the fine print.”
The changes align payday loan prices in Newfoundland and Labrador with those of other provinces in Atlantic Canada.
Both New Brunswick and Nova Scotia have legislated a price of $15 per $100.
The New Brunswick price came into effect on January 1, 2018, while the Nova Scotia price will come into effect on January 1, 2024.
PEI is the most expensive province to get a payday loan, with a cost of $25 on every $100 loaned.