1. Learn more about what the lender can do

I can't repay my payday loan. What should I do?
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1. Learn more about what the lender can do

If you can’t repay your payday loan on time, the lender can do one or more of the following:

  1. Add late fees and other charges to your loan. They can also charge interest for the time after your payment was due. This can be up to 60% as an annual rate. This can make it very hard to pay back the loan, and can cause you a lot of trouble in the future.
  2. Send your file to a collection agency, which means that the collection agency will try to get repayment from you. This will affect your credit score and make it harder for you to get loans in the future.
  3. Take you to Small Claims Court. If the lender wins in court, the court might allow them to take some of your money or property. The court may also allow the lender to take money directly from your paycheque. This is called garnishing your wages.

If you cannot repay your loan and the lender won’t agree to a new payment plan, try and speak to a non-profit credit counsellor. They may be able to help you.

Options that are not allowed

A payday lender can't take money directly from your wages or employer to repay the loan. This means they can't ask you to sign a "wage assignment" or other document that would let them take your pay. 

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Ontario Ministry of Government and Consumer Services
Reviewed: July 18, 2018

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