What is a payday loan cooling-off period? It’s the time lenders give you to cancel a payday loan without penalty. Cooling-off periods are mandatory in Canada and vary by province.
Depending on where you live, you may have a longer cooling-off period. For example, in Alberta, British Columbia, and Ontario, you have 2 business days to cancel a loan. In Nova Scotia and Saskatchewan, it’s one day.
The purpose of this mandatory waiting period is to give you time to reconsider your decision and cancel a loan if needed. If you find alternative financing or realize you don’t need the loan after all, this period gives you more flexibility in your financial decisions.
Of course, if you need additional monetary support, short-duration loans are an excellent option. iCash lets you borrow up to $1,500 in minutes and use the funds for any pressing expense. It’s a fast and convenient way to access funding when you’re stuck in between paychecks. Plus, the iCash cooling-off period gives you more borrowing power.
Whether you’re considering payday financing services or have already applied for a small loan, familiarize yourself with the cooling-off period in your province. Knowing your rights can help you make the best financial decisions and avoid any penalties if you change your mind.
Continue reading to learn more about the payday loan cooling-off period, including how it works in different provinces and knowing your rights and responsibilities as a borrower.
How Does the Payday Loan Cooling-Off Period Work?
How does the payday loan cooling-off period work? It varies by province, but generally, it begins when you sign the loan agreement. During this time, you can cancel the loan without any penalties or fees.
If you choose to cancel the loan in this timeframe, you must return all funds borrowed (if already received). The loan provider cannot charge you any fees for cancelling.
However, if you cancel the loan after this period ends, you may be subject to penalties and fees as outlined in your loan agreement. As a general rule, always review the terms and conditions set out by your lender and ensure that you understand everything.
Payday Loan Cooling-Off Period by Province
Canadian regulations on a payday loan cooling-off period by province ensure that you have a fair chance to reconsider your loan decisions. As mentioned, the length of time you have to cancel a loan depends on where you live.
Here’s a breakdown of the payday loan cooling-off period in different provinces:
Province | Payday Loan Cooling-Off Period |
Alberta | 2-day cooling-off period |
British Columbia | 2 business days |
Manitoba | 48 hours, with the exception of Sundays/holidays |
New Brunswick | 48 hours, with the exception of Sundays/holidays |
Newfoundland & Labrador | 2 business days |
Nova Scotia | The next business day |
Ontario | 2 business days |
Prince Edward Island | 2 business days |
Saskatchewan | The next business day |
Cancelling a Payday Loan Agreement & Your Borrowing Rights
Cancelling a payday loan agreement and knowing your borrowing rights is important. The Financial Consumer Agency of Canada (FCAC) recommends that you understand your rights in the following areas:
1. Interest Rates
Lenders must disclose all interest rates, including the annual interest rate (APR), total cost of borrowing, and any other fees associated with the loan. You should know exactly what your loan will cost before agreeing to the terms.
For example, if you live in Ontario, the maximum allowable cost of borrowing is $15 per $100 borrowed. For a $300 loan over 14 days, you'd pay back $345, including both the loan and interest.
2. Payment Schedules
Payment schedules should be clearly outlined. This means you should know exactly when payments are due, how many repayments you’re eligible to make, and how long you have to repay the amount borrowed.
Residents of Ontario must repay their loan in one lump sum, up to a 62-day maximum term. For residents of Alberta, 2 to 7 repayments are available based on pay frequency at no extra cost or fees. This term ranges between 42 and 62 days.
If you live in another province, ask your lender about the number of repayments and term duration. This way, you're aware of your options and obligations regarding loan repayments and terms in your specific location.
3. Prepayment Penalties
Your loan provider will inform you of any prepayment penalties or fees for paying off the loan early. Not all lenders charge this fee, so it’s important to compare options.
You may want to consider working with a company that has no early prepayment penalties, like iCash. That way, if you choose to repay your loan before your scheduled payment agreement, you can do so without extra costs.
4. Payday Loan Cooling-Off Period
As mentioned earlier, you have the right to cancel a payday loan within a specified period. If you change your mind about financing, make sure to do so during this time. You won’t incur any penalties for cancelling during this period.
How can I cancel a payday loan after signing?
To cancel your payday loan without incurring any penalty, ensure you do so within the allotted cooling-off period. Then, return the borrowed amount to the lender either via e-Transfer or automatic debit. The lender must also deactivate any authorized electronic withdrawals from your bank account.
Remember, you must proceed with the loan cancellation at the same location where the loan was initially obtained. For example, if you received a payday loan online, you must complete the cancellation process through the same platform or contact method used to secure the loan. This involves logging into your account on the lender's website and following the steps for loan cancellation.
The Benefits of a Payday Loan Cooling-Off Period
The benefits of a payday loan cooling-off period are significant. This timeframe plays an important role in helping you manage your finances responsibly. It gives you time to reassess your financial obligations without immediate pressure.
Perhaps you miscalculated the total amount of money you need to borrow. Or, maybe you found another alternative to cover your expenses. Whatever the reason, you can cancel the loan without any hassle during this timeframe.
Additional benefits of a payday loan cooling-off period include:
More time to compare financing options: With the hectic pace of life, it’s easy to rush into a decision without exploring all of your options. Having more time to compare loans from different lenders can help you make a better decision for your needs.
Protection from unethical lending: While the provincial governments aim to regulate lending practices across Canada, unethical practices may still exist. The cooling-off period gives you more time to research and find a loan provider that holds all the necessary licences and adheres to responsible lending practices.
Opportunity to seek financial advice: If you’re unsure about whether or not a short-term loan is right for you, you have time to speak to a professional. By seeking professional advice, you’ll gain more confidence to make an informed decision based on your needs.
Above all, this allocated period serves as a reminder to consider all options before taking on any financial commitment. It allows for responsible decision-making and prevents impulsive borrowing.
Enjoy a Payday Loan Cooling-Off Period with iCash
Enjoy a payday loan cooling-off period with iCash for hassle-free cancellations. This gives you peace of mind and the opportunity to make smart decisions, every time. Plus, transparent and responsible lending practices ensure you are fully aware of the loan terms.
Even if you need additional information, we offer a variety of resources on the iCash website. Navigate the financial landscape with our personal finance hub, where you can find valuable insights on budgeting, saving, and managing debt. We also provide a list of resources about online loans, so that you can better understand the process.
Ready to explore reliable financial solutions? Don’t wait! Get up to $1,500 by applying through our easy-to-navigate mobile loan app.
