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Canadian legislation forbids loan providers from charging significantly more than 60-percent annual interest on loans.

Canadian legislation forbids loan providers from charging significantly more than 60-percent annual interest on loans.

Bu t the government introduced legislation permitting provinces to exempt payday loan providers from that limitation when they created a regulatory system to govern the industry.

Seven provinces have actually legislation, nevertheless the approaches vary.

Manitoba gets the many strict guidelines, capping pay day loan costs at $17 per $100 lent, while Prince Edward Island permits loan providers to charge as much as $25 per $100.

The knock in the industry could be the costs, which frequently find yourself hitting people who can minimum manage them. Both of which include a $5 administration fee, according to the Financial Consumer Agency of Canada (FCAC) for example, a $300 twoweek payday loan can carry a fee of $63, compared with just $5.81 for borrowing from a line of credit or $7.42 for a cash advance on a credit card.

In Ontario, a payday that is two-week expenses as much as $21 per $100 lent.