📚 Financial Glossary Canada

The total yearly cost of borrowing expressed as a percentage. Includes interest and all mandatory fees. In Canada, lenders must disclose APR under the Interest Act and provincial consumer protection laws.

Federal agency that protects consumers of financial products and services. Oversees federally regulated financial institutions and provides educational resources.

Ontario's financial regulator overseeing payday lenders, mortgage brokers, and insurance companies. Other provinces have their own regulators.

Short-term loan of $1,500 or less, due on or before your next payday. Regulated provincially — fees vary by province (e.g., $15/$100 in Ontario, $17/$100 in BC, $15/$100 in Alberta).

Three-digit number (300-900) predicting loan repayment likelihood. Provided by Equifax and TransUnion in Canada. Score above 700 is considered good.

Canada's two major credit bureaus. They maintain credit reports and calculate credit scores. You can request one free report per year from each.

Maximum cost per $100 borrowed for payday loans, set by each province. Ontario: $15, BC: $17, Alberta: $15, Saskatchewan: $17, Manitoba: $17.

Under Section 347 of the Criminal Code, charging more than provider-disclosed percentage APR (effective annual rate) is a criminal offense in Canada. Does not apply to regulated payday loans.

Loan repaid in regular payments over a set period (weeks, months, or years). Lower APR than payday loans. Available from $500 to $35,000+ from licensed lenders.

Minimum the current published timeframe in most provinces during which you can cancel a payday loan without penalty. Must return the full principal.

Charge when a pre-authorized payment bounces due to insufficient funds in your account. Payday lenders typically charge $25-$50 for NSF.

Loans with APR exceeding provider-disclosed percentage (or provider-disclosed percentage in some provinces). Subject to additional disclosure requirements and consumer protections.

Percentage of gross monthly income used for debt payments. Canadian lenders typically require DTI below provider-disclosed percentage for loan approval.

Legal process under the Bankruptcy and Insolvency Act allowing you to negotiate reduced debt repayment with creditors. Alternative to bankruptcy.

A lender holding a valid provincial license to operate. All payday lenders must be licensed. Verify at your provincial regulator's website.

Agreement allowing the lender to withdraw payments directly from your bank account. Standard for payday loan repayment in Canada.

Renewing a payday loan by paying fees and extending the due date. Banned in most Canadian provinces including Ontario, BC, Alberta, and Manitoba.

Time between receiving funds and the first required payment. Payday loans typically have no grace period; installment loans may offer the current published timeframe.

The total amount of money paid in interest, fees, and charges over the life of the loan. Required disclosure under Canadian consumer protection law.

Flexible borrowing facility with a set limit. You pay interest only on the amount used. Available as secured (backed by home equity) or unsecured.

Professional advice to help manage debt and improve financial health. Non-profit agencies like Credit Counselling Canada offer free services.

Loan disbursed via Interac e-Transfer. Common for online payday and installment loans in Canada. Funds available within hours.

Understanding of financial concepts needed to make informed decisions. FCAC provides free resources at canada.ca/financial-literacy.

Court-ordered deduction from wages or bank account to repay a debt. Protected amounts vary by province. Requires a court judgment.

The process of gradually repaying a loan through regular payments. Each payment covers interest and reduces the principal.