Loans in Canada: What Each Type Costs in BC, Alberta and Ontario

Loans in Canada run from a bank average of 3.99% (July 2026, Bank of Canada) on secured lines of credit up to 35% APR. That is the legal maximum once interest and fees are added together (Criminal Code, s. 347, since January 1, 2025). The main exception is a provincially regulated payday loan, capped at $14 per $100.

Finder Canada puts non-prime car loans at 12.9% to 29.99% (updated September 17, 2026). This guide covers BC, Alberta and Ontario. It compares each loan type on cost, term, regulator and the provincial rule that matters most.

Source: Bank of Canada, Valet series V39079, V80691311 and V122667805, refreshed daily. The auto loan figure covers chartered banks only and runs about two to three months behind.

On this page 9 sections

1. What does each type of loan cost in Canada?
2. What does $5,000 for 12 months cost by loan type?
3. What is each type of loan?
4. What is the 35% criminal interest rate?
5. What is the 32% high-cost credit line?
6. How do you read an APR and the cost of borrowing?
7. Which loan offers are red flags?
8. Where do you complain about a lender?
9. FAQ

What does each type of loan cost in Canada?

Secured bank credit costs least and payday loans cost most: chartered banks averaged 3.99% on secured lines of credit in July 2026 (Bank of Canada). Fairstone and easyfinancial publish personal loan rates from 29.99% (checked October 15, 2026), and a payday loan costs up to $14 per $100.

Bank of Canada figures cover chartered banks only and lag two to three months. They show what bank customers paid, not what a finance company will quote you today.

What does $5,000 for 12 months cost by loan type?

Borrowing $5,000 for 12 months costs about $109 in interest on a secured bank line of credit at 3.99% and $997 at 34.99% APR. Those are our own calculations from the July 2026 Bank of Canada averages and the published lender rates. A payday loan can’t be used for this at all: the legal maximum is $1,500.

Our method:

• 12 equal monthly payments on a standard amortizing loan.
• The APR treated as the full cost of credit.
• Line of credit rates held steady for the year.

FCAC’s own example totals run slightly higher because FCAC rounds payments to the dollar.

What is each type of loan?

Canadian consumer credit comes in six common forms: bank car loans, non-prime car loans, instalment loans, lines of credit, payday loans and wage advances. Each is defined below in one sentence from FCAC’s guides (October 14, 2025) or the Criminal Code.

Car loans

A car loan is an instalment loan secured by the vehicle it pays for, so the lender can repossess the car if you stop paying. A non-prime car loan is the same loan priced for weaker credit. Finder’s published non-prime range tops out at 29.99%, below the 35% cap.

Most non-prime car credit is arranged at the dealership. FCAC warns that “a dealer doesn’t have to offer you the lowest interest rate.” Our bad credit car loan guide compares rates by tier, and the car loan rate tracker follows the bank average.

Instalment loans

An instalment loan is a fixed amount repaid in equal payments over a set term. Most run from $100 to $50,000 over 6 to 60 months (FCAC). The rate can go up to the 35% ceiling, and it depends on:

• your credit
• the lender
• whether the loan is secured

Lines of credit

A line of credit is a pre-set borrowing limit you draw on as needed. You pay interest only on what you use, at a rate that is usually variable (FCAC). A secured line of credit is one backed by an asset such as your home or car. A home equity line of credit (HELOC) is the common form.

Because the rate moves, your payment can rise when prime does. Prime at the big banks is 4.45% (October 14, 2026, Bank of Canada). A higher credit score usually means a lower rate (FCAC).

Payday loans

A payday loan is an advance of $1,500 or less, for 62 days or less (Criminal Code, s. 347.1). You repay it through one of these:

• a post-dated cheque
• a pre-authorized debit
• a similar future payment

In these three provinces it can cost up to $14 per $100 borrowed (FCAC), so a $500 two-week loan can cost $70.

Provincially regulated payday loans are exempt from the 35% criminal rate (s. 347.1). Their total cost is capped at 14% of the amount advanced (SOR/2024-114), which is why they are quoted in dollars. Ontario gives you two business days to cancel without penalty (Ontario.ca).

Wage advances

A wage advance is early access to pay you have already earned, for a flat fee, before your employer’s payday. NotchUp offers up to $1,500 of earned wages for a $5 fee. It is not a car loan or a way to fix credit.

What is the 35% criminal interest rate?

The criminal interest rate is any APR that “exceeds 35 per cent on the credit advanced” (Criminal Code, s. 347(2)), a limit in force since January 1, 2025. The law counts fees, fines, penalties and commissions as interest, so a lender cannot get under the cap by moving cost into an “admin fee”.

The same section makes it an offence to advertise an offer above the criminal rate, not only to collect it. The exceptions are:

• provincially regulated payday loans
• some commercial loans to businesses
• pawn loans under $1,000

None covers a consumer car loan (Criminal Code, s. 347.1; SOR/2024-114).

What is the 32% high-cost credit line?

In Alberta, anyone who “offers, arranges for, or enters into” credit at 32% APR or more must hold a high-cost credit business licence (alberta.ca, checked October 15, 2026). That includes online operators, and a loan between 32% and 35% is legal in Alberta only from a licensed business.

BC draws a similar line: Consumer Protection BC licenses consumer credit above 32% APR. Payday loans and mortgages are excluded, and banks and credit unions are exempt. A borrower may cancel before the end of the lender’s next business day (BPCPA, s. 112.20(1)).

Ontario has no high-cost credit licence. It licenses payday lenders under the Payday Loans Act, 2008, and the federal 35% cap is otherwise the only ceiling. In Alberta or BC, ask a 32% to 35% lender for its licence number and check it.

How do you read an APR and the cost of borrowing?

The APR is the yearly cost of a loan with required fees folded in, and the cost of borrowing is that cost in dollars for the whole term. In FCAC’s example (October 14, 2025), a $2,000 loan over 36 months costs $2,304 in total at 8.99% APR, $2,700 at 19.99% and $3,312 at 34.99%.

The cost-of-credit disclosure rules are harmonized through the Consumer Measures Committee. The disclosure statement must show the total cost of borrowing and total payments. Any ad quoting a rate or payment must show the APR and term. The rules are:

• O. Reg. 17/05, s. 61 under Ontario’s Consumer Protection Act, 2002
• Alberta’s Cost of Credit Disclosure Regulation, s. 6(2)
• BC’s Business Practices and Consumer Protection Act, s. 60(2)

1. Compare the total cost of borrowing in dollars, over the same term.
2. Check the APR, which includes required fees such as admin and brokerage charges.
3. Check the term: a lower payment over more months usually costs more (FCAC).
4. Remove optional credit insurance you do not want; it is excluded from the APR.
5. Get the disclosure statement before you sign, and keep a copy.

Which loan offers are red flags?

Walk away from any lender that asks for money before you receive the loan, because in most provinces “it is illegal for a company to request an upfront fee.” That is the Canadian Anti-Fraud Centre’s warning (January 16, 2026), and it also flags guaranteed loans for bad credit, instant approvals and payment by e-transfer or prepaid card.

• A “guaranteed approval” promise; our guide to what sits behind “guaranteed approval” ads explains the catch.
• An APR above 35%, or a payment quoted with no APR and term.
• “Insurance”, “processing” or “membership” fees that appear only on the contract.
• Pressure to sign before you can take the disclosure statement home.
• A high-cost lender in Alberta or BC with no licence number.

Where do you complain about a lender?

Complain to the lender first, then to its regulator: FCAC for banks, the provincial consumer protection office for payday and finance companies, and the provincial dealer regulator for car dealers. Every federally regulated financial institution must have a complaint procedure (FCAC, July 15, 2026).

• Banks, anywhere in Canada: the FCAC complaints page.
• Ontario: Consumer Protection Ontario for payday lenders and other businesses; the Ontario Motor Vehicle Industry Council (OMVIC) for car dealers.
• Alberta: Service Alberta’s Consumer Investigations Unit (contact centre 1-877-427-4088) for payday loans and unfair practices; the Alberta Motor Vehicle Industry Council (AMVIC) for car dealers.
• British Columbia: Consumer Protection BC for payday and high-cost credit; the Vehicle Sales Authority of BC (VSA) for car dealers.

Behind on payments already? Read what to do if you can’t pay a loan. For how our tables are checked, see NotchUp’s loans methodology.

Frequently asked questions

What is the maximum interest rate on a loan in Canada?

The maximum is 35% APR, counting interest and fees together, under section 347 of the Criminal Code since January 1, 2025. Provincially regulated payday loans are exempt and are capped instead at $14 per $100 borrowed in BC, Alberta and Ontario. Advertising an offer above 35% is itself an offence.

Which type of loan costs the least in Canada?

Secured bank credit costs the least. Chartered banks averaged 3.99% (July 2026, Bank of Canada) on secured lines of credit, against 7.97% (July 2026, Bank of Canada) on personal loans (Bank of Canada). By our calculation, $5,000 for 12 months costs about $109 at 3.99% and $997 at 34.99% APR.

Do I need a licensed lender for a loan above 32% in Alberta?

Yes. A business that offers, arranges or enters into credit at 32% APR or more with an Alberta borrower must hold a high-cost credit business licence (alberta.ca). Online operators are included. BC requires a licence for consumer credit above 32%, with banks and credit unions exempt.

How much does a payday loan cost in Ontario, Alberta or BC?

A payday loan in all three provinces can cost up to $14 for every $100 borrowed, including all fees, since January 1, 2025. At that rate, the $1,500 maximum costs up to $210. A payday lender may also charge a one-time fee of up to $20 for a dishonoured cheque or payment (FCAC; SOR/2024-114).

Is it legal for a lender to charge a fee before I get the loan?

In most provinces it is illegal for a company to ask for an upfront fee before you receive your loan, according to the Canadian Anti-Fraud Centre. The request is a common sign of a loan scam. Do not pay, stop contact, and report it to the Anti-Fraud Centre.

Sources

1. Bank of Canada, Valet: consumer credit interest rates, funds advanced (series V122667804 to V122667807, July 2026)
2. Bank of Canada, Interest rates: policy rate and prime
3. Justice Laws, Criminal Code, section 347: criminal interest rate
4. Justice Laws, Criminal Code, section 347.1: payday loans ($1,500 or less, 62 days or less)
5. Justice Laws, Criminal Interest Rate Regulations, SOR/2024-114 (in force January 1, 2025)
6. Financial Consumer Agency of Canada, Personal loans (October 14, 2025)
7. Financial Consumer Agency of Canada, Lines of credit (October 14, 2025)
8. Financial Consumer Agency of Canada, Payday loans (October 14, 2025)
9. Financial Consumer Agency of Canada, Shopping around for a car loan (October 14, 2025)
10. Financial Consumer Agency of Canada, Complaints (July 15, 2026)
11. Financial Consumer Agency of Canada, How you are protected when financing a car (October 14, 2025)
12. Consumer Measures Committee, Agreement for the harmonization of cost of credit disclosure laws in Canada
13. Government of Alberta, High-cost credit business licence
14. Government of Alberta, Payday loans
15. Government of Alberta, File a consumer complaint
16. Consumer Protection BC, High-cost credit granting
17. Consumer Protection BC, Payday lending basics
18. Consumer Protection BC, Consumer help
19. BC Laws, Business Practices and Consumer Protection Act, Part 6.3: high-cost credit products
20. Government of Ontario, Payday loan: your rights
21. Government of Ontario, Filing a consumer complaint
22. Government of Ontario, Payday Loans Act, 2008
23. Government of Ontario, O. Reg. 17/05 under the Consumer Protection Act, 2002
24. Alberta King’s Printer, Cost of Credit Disclosure Regulation, AR 198/1999
25. BC Laws, Business Practices and Consumer Protection Act, Part 5
26. Finder Canada, Subprime auto loans in Canada (September 17, 2026)
27. iA Auto Finance, Auto loans (checked October 15, 2026)
28. NerdWallet Canada, How car loans work (February 4, 2025)
29. Fairstone, Car and auto loans (checked October 15, 2026)
30. easyfinancial, Personal loans (checked October 15, 2026)
31. Canadian Anti-Fraud Centre, Grant and loan scams (January 16, 2026)
32. OMVIC, File a complaint
33. OMVIC, Cancelling an agreement
34. AMVIC, Complaint process
35. AMVIC, Before you sign
36. Vehicle Sales Authority of BC, Make a formal complaint to the VSA
37. Vehicle Sales Authority of BC, Vehicle returns