What is the maximum legal interest rate in Canada?

35% APR. The criminal interest rate under section 347 of the Criminal Code fell from a 60% effective annual rate (roughly 48% APR) on 1 January 2025. Higher limits apply only to certain commercial loans and small pawn loans. Charging, offering or advertising credit above the limit is a criminal offence.

How much does a payday loan cost in Canada?

A maximum of $14 per $100 borrowed a federal cap in force since 1 January 2025. A $500 loan costs at most $70. Over a typical 14 day term that's an APR of roughly 365%. Payday loans are capped at $1,500 with a maximum term of 62 days, and the maximum dishonoured payment charge is $20.

Did payday loan caps change recently?

Yes. Before 1 January 2025, provincial caps ranged from $14 to $17 per $100 Ontario, BC and Alberta were at $15, Manitoba and Saskatchewan at $17. The federal Criminal Interest Rate Regulations now limit the payday exemption to $14 per $100, which brought every province down to $14. Any quote above that on an agreement signed after 1 January 2025 is not legal.

Are payday loans legal in Quebec?

Not in practice. Quebec caps all consumer credit at 35% APR under its Consumer Protection Act and has never created a payday exemption, so the payday model can't operate there. The same applies in Northwest Territories, Nunavut and Yukon, which have no payday specific legislation.

What's the payment on a $20,000 loan?

At 9% APR over five years, about $415.17 a month, repaying $24,910 in total with $4,910 of interest. Over four years the payment is $497.70 with $3,890 of interest; over seven years it's $321.78 with $7,030 of interest.

What's the difference between interest rate and APR?

The interest rate is charged on your outstanding balance. The APR includes interest plus mandatory fees, so it reflects the true cost of the credit. Always compare APRs two loans quoting the same rate can cost different amounts. Under the Criminal Code, interest is defined broadly enough to include fees, penalties and commissions.

Does a longer loan term cost more?

Yes, always. The monthly payment is lower but you pay interest for longer. On a $20,000 loan at 9%, moving from four years to seven reduces the payment by $176 a month and adds $3,140 in total interest.

Can I pay off a loan early?

It depends whether the loan is open or closed. Open loans allow repayment in full at any time without penalty. Closed loans restrict prepayment, often permitting a percentage each year with a charge beyond that. Check your agreement before making a lump sum payment.

What happens if I can't pay my loan?

Contact your lender before missing a payment they have more options with a borrower in good standing. Unpaid consumer debt is a civil matter in Canada, never criminal, and you can't be jailed for it. A lender needs a court judgment before wages can be garnished. Default usually goes to collections and appears on your credit report for up to six years. Non profit credit counselling agencies offer free initial consultations.

Can my wages be garnished in Canada?

Only with a court judgment. A lender must sue and obtain a judgment before garnishment is possible. Without one, no garnishment can occur. Provincial rules also prohibit harassment in debt collection, and breaches are reportable to your provincial regulator.

Does debt consolidation actually save money?

Only if the new rate is genuinely lower than the weighted average of what you're replacing and the term isn't stretched far enough to erase the benefit. Compare total interest, not monthly payments a consolidation that lowers your payment while raising your total cost is common and is usually presented as a saving.

How do I check whether a lender is licensed?

Every province that regulates payday and high cost lending publishes a public registry of licensed lenders. Check it before signing. Warning signs include quotes above $14 per $100, guaranteed approval promises, upfront fees before funds are advanced, and requests for repayment by gift card or cryptocurrency.

Is this calculator free?

Yes. No account, no email, no limits and we don't sell loans or refer you to lenders.

Loan Calculator Canada

Work out what a loan will cost you not just the monthly payment, but the total interest over the full term.

Enter the amount, rate and term. We show the payment and the total cost side by side, because the payment is the number lenders lead with and the total is the one that matters.

Loan Calculator Canada

Loan Type

Loan amount

Interest rate (%)

Term (months)

Payment frequency

Estimated Monthly Payment

$604 / month

Total loan cost: $29,015 over 48 months

Payment Amount

$604

Every month

Total Interest

$4,015

at 7.5% annual rate

Total Repaid

$29,015

Principal + interest

Loan Balance Paydown Over TimeYear

Borrowing $25,000 at 7.5% over 48 months results in 48 payments of $604, with final payoff expected in 2030.

How This Calculator Works

Enter three things how much you're borrowing, the annual rate, and how long you'll take to repay it and the calculator returns your regular payment, the total you'll repay, and how much of that is interest.

What it assumes

Monthly compounding, standard for Canadian personal, auto and consolidation loans. (Fixed rate mortgages compound semi annually by law.)
A fixed rate for the whole term. Variable rate loans and lines of credit move with prime (currently 4.45%)
Equal payments with no missed or extra payments
The rate you enter includes all costs. If your lender charges fees on top, your true cost is higher see the APR section below

What it doesn't know

Whether you'll be approved, what rate you'll actually be offered, or whether the loan is a good idea. The first two depend on your credit and income. The third depends on things a calculator can't see.

What Determines Your Payment

Three inputs, and they don't pull in the same direction.

The amount

Straightforward double the loan, double the payment at the same rate and term.

The rate

On a $20,000 five year loan, every percentage point costs roughly $9 to 10 a month and around $550 in total interest.

The term

This is where most people get caught stretching the term lowers monthly payment but increases total interest.

Term Length Lower Payment, Higher Cost

Stretching a loan makes the monthly payment smaller and the loan more expensive. Both are always true, and lenders tend to emphasise only the first.

A $20,000 loan at 9%:

Term	Monthly payment	Total repaid	Total interest
4 years	$497.70	$23,890	$3,890
5 years	$415.17	$24,910	$4,910
7 years	$321.78	$27,030	$7,030

Going from four years to seven drops the payment by $176 a month and adds $3,140 in interest. You're paying roughly $3,140 for the privilege of paying $176 less each month. Make it a decision, not a default.

Interest Rate vs APR

The interest rate is what's charged on the outstanding balance. The APR annual percentage rate includes the interest plus mandatory fees, which makes it the number that actually tells you what the credit costs.

Under the Criminal Code, "interest" is defined broadly enough to capture fees, fines, penalties, commissions and similar charges not just the stated rate. A lender can't stay under the legal ceiling by relabelling interest as an administration fee.

The Maximum Legal Interest Rate in Canada

The criminal interest rate in Canada is 35% APR.

It changed on 1 January 2025. Before that, the limit was a 60% effective annual rate, roughly equivalent to 48% APR. The amendments came through Bill C 47 which received Royal Assent on 22 June 2023.

Type of credit	Maximum rate
Consumer loans $10,000 and under	35% APR
Commercial loans $10,000 to $500,000	48% APR
Commercial loans above $500,000	No cap
Small pawn loans under $1,000	48% APR
Qualifying payday loans	$14 per $100

What Different Credit Actually Costs

The same amount borrowed for the same period costs wildly different amounts depending on the product. Here's $500 for two weeks:

Product	Cost for 14 days
Payday loan at $14 per $100	$70 (365% APR)
Credit card at 19.99%	$3.83
Personal loan at 9%	$1.73

$70 versus $3.83. Eighteen times the cost, for the same money over the same fortnight.

Payday Loans and the Rules Where You Live

Since 1 January 2025, the Criminal Interest Rate Regulations limit the total cost of borrowing on a qualifying payday loan to $14 per $100 lent across all Canadian provinces.

Jurisdiction	Cost cap	Notable rules	Regulator
Ontario	$14/$100	Instalment option required on 3rd loan within 63 days	FSRA
British Columbia	$14/$100	Loan limited to 50% of net pay	BCFSA
Alberta	$14/$100	42 to 62 day instalment term required; 2 day cooling off	Service Alberta
Manitoba	$14/$100	Loan limited to 30% of net pay; 1 active loan at a time	Consumer Protection
Quebec	No payday lending	All consumer credit capped at 35% APR under CPA	AMF
Territories (NT, NU, YT)	35% APR	No payday legislation federal cap applies	—

Why Use the CalcVault Loan Calculator

Total cost leadingFocuses on total interest paid, not just low monthly payments.

Term trade off comparisonShows 4, 5, and 7-year options side by side automatically.

Legal ceiling accuracyUpdated with the 2025 federal 35% APR cap and $14/$100 payday rules.

100% unbiasedNo lender referral fees, no affiliate links, no lead forms.

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Loan Calculator FAQs

Sources and Disclaimer

Method: Payments are calculated with monthly compounding using the standard annuity formula for Canadian personal, auto and consolidation loans.

Sources: Criminal Code of Canada (section 347, 35% APR cap, $14 per $100 payday cap), Bill C 47 Budget Implementation Act, Financial Consumer Agency of Canada, provincial regulators (FSRA, BCFSA, Service Alberta, AMF).

Disclaimer: CalcVault is not a lender or loan broker. This calculator and content are general information only and do not constitute financial or legal advice.