Payday Lending Regulations in Ontario
Payday lending in Ontario is different from payday lending in Canada. Not all of Canada’s payday lending laws are the same. Ontario has its own set of lending laws that lenders must abide by and that consumers are protected by. There are about 750 to 800 payday lending stores in Ontario alone. These store fronts do not account the hundreds of Ontario payday loan lenders that you can find online. Legislation has helped to curve poor payday lending practices and to protect the consumer overall. Here are a few laws and regulations concerning cash advances in Ontario, Canada.
- All payday lenders must be licensed by the provincial government.
- Payday lenders cannot offer roll over loans as an alternative to paying back their original payday lending loan. Roll over loans are used to pay off original payday loans at a higher price which often creates a cycle of debt for many payday loan borrowers.
- There is also a two day cooling off period which allows the borrower to return the loan money without any penalties. The contract can be voided and cancelled.
- Lenders who do not abide by these regulations will be subject to prosecution and the revocation of their payday lending license.
These payday loan regulations have been put in place in order to protect borrowers from poor lending practices that often lead them into a cycle of debt. As more payday lenders in the area of Ontario are held more accountable of their actions, the safer payday lending has become for consumers.
