Starting February 15, 2018, changes to The Payday Loans Regulations will result in a reduction in the maximum allowable cost a payday lender can charge on a loan and a reduction in the fee if there is a dishonoured payment.
These changes make payday loans less costly for Saskatchewan borrowers while maintaining the ability of licensed payday lenders to provide loans in the province so consumers who want them have access to them. Payday loans are short-term loans of up to 62 days.
In practice, most payday loans are due on the borrower’s next payday. Currently, the maximum cost of borrowing for a payday loan is capped at 23 per cent of the loan amount, no matter how many days the loan is for. That means, for every $100 a consumer borrows, they could be charged up to $23. The maximum cost of borrowing will be reduced to 17 per cent of the loan amount.
This change will match British Columbia and Manitoba’s rules for payday loans. Additionally, the fee charged for a dishonoured cheque or payment typically known as a non-sufficient funds fee (NSF fee) will be reduced to $25 from $50 and may still only be charged once per loan. This means consumers who have one or more dishonoured payments in relation to the same payday loan would only be charged a single NSF fee of up to $25.
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