2. If you change your mind after 2 days

Can I cancel a payday loan agreement?
This question has an answer and 4 steps

2. If you change your mind after 2 days

After the 2-day cooling-off period, you can only cancel the agreement if the payday lender didn’t follow all the rules.

The rules say payday lenders can't:

  • charge interest and fees more than $15 for every $100 you borrow
  • lend you more than 50% of your net monthly pay per loan
  • ask you for collateral
  • ask you for a guarantor 
  • give you a new loan until the first one is paid off
  • offer you other services when you apply for a loan, like buying your gold or jewellery, or cashing your cheques
  • contact you more than 3 times a week or on statutory holidays
  • take money from your paycheque to pay the loan

What payday lenders have to do

The rules say what has to be in a payday loan agreement. This includes things like:

  • It must be in writing.
  • It must be printed in text that is big enough to read easily.
  • It must have details like:
    • a 2-day cooling-off period, during which you can cancel the loan for any reason without paying any fees
    • when you must repay the loan
    • the total amount you must repay
    • what it would cost to borrow $500
    • the cost of borrowing as an annual interest rate for a 14-day loan

What you get

The rules say that as soon as you sign a payday loan agreement, the payday lender must give you: 

  • a copy of the agreement right away
  • the full amount of the money you want to borrow -- they cannot keep part of it to cover any fees or charges
  • the money as soon as you sign the agreement in person, or within one hour if you make the agreement online

If you borrow from a payday lender over the internet, you can usually get the money by picking it up at their store, or they can deposit it into your bank account.

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

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