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.
This guide covers BC, Alberta and Ontario. NotchUp’s loans methodology explains how every figure is checked.
The short answer
- 35%
The legal maximum APR on loans in Canada since January 1, 2025, counting interest and fees together (Criminal Code, s. 347).
- $14
The most a payday lender in BC, Alberta or Ontario may charge per $100 borrowed, all fees included, since January 1, 2025 (Financial Consumer Agency of Canada and the three provinces).
- 32%
The APR at which a lender needs a high-cost credit licence in Alberta (32% or more) and in BC (above 32%), according to each province’s regulator.
- $1,008
The extra cost of a $2,000, 36-month loan at 34.99% compared with 8.99%, in FCAC’s own worked example ($3,312 against $2,304 repaid).
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 7 sections
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).
| Loan type | APR or cost, with source and date | Typical term | Key BC, Alberta and Ontario rule |
|---|---|---|---|
| Bank car loan | 6.66% average on new loans, July 2026 (Bank of Canada, chartered banks only) | 12 to 72 months, some 84 or 96 (NerdWallet Canada, February 4, 2025) | No cooling-off period on a signed car purchase or loan in any of the three provinces (OMVIC, AMVIC, VSA) |
| Non-prime car loan | 12.9% to 29.99% (Finder Canada, updated September 17, 2026); iA Auto Finance advertises non-prime rates “from as low as 8.99%” (checked October 15, 2026) | 12 to 72 months, some 84 or 96 (NerdWallet Canada) | Alberta: licence needed at 32% APR or more, dealers included. BC: licence above 32%. Ontario: the federal 35% cap is the only ceiling. |
| Bank personal loan | 7.97% average on new loans, July 2026 (Bank of Canada, personal loan plans, which include auto loans) | Most run 6 to 60 months, $100 to $50,000 (FCAC) | The 35% criminal rate applies in all three provinces |
| Finance company instalment loan | Fairstone 29.99% to 34.99% over 6 to 60 months; easyfinancial from 29.99% over 9 to 84 months (each lender’s own page, checked October 15, 2026) | 6 to 84 months at these two lenders | Alberta licenses lenders at 32% APR or more and BC above 32%; in BC you may cancel a high-cost loan before the end of the lender’s next business day (BPCPA, s. 112.20) |
| Unsecured line of credit | 7.75% average on new borrowing, July 2026 (Bank of Canada, chartered banks only) | Open: borrow up to a limit and repay at any time (FCAC) | The rate is variable and can rise (FCAC) |
| Secured line of credit | 3.99% average on new borrowing, July 2026 (Bank of Canada, chartered banks only) | Open: borrow up to a limit and repay at any time (FCAC) | An asset such as your home or car is the collateral (FCAC) |
| Payday loan | Up to $14 per $100 borrowed, all fees included, not quoted as an APR (FCAC; in force January 1, 2025) | 62 days or less, for $1,500 or less (Criminal Code, s. 347.1) | Ontario lets you cancel within two business days; a dishonoured payment fee is capped at $20 (SOR/2024-114) |
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. That is our calculation from July 2026 Bank of Canada averages and published lender rates. Bank of Canada figures cover chartered banks only and lag two to three months.
Our calculation: 12 equal monthly payments, the APR treated as the full cost of credit, line of credit rates held steady for the year. Bank rates are July 2026 Bank of Canada averages.
What is each type of loan?
Each type is defined below from FCAC’s guides (October 14, 2025) or the Criminal Code.
Car loans and instalment loans
A car loan is an instalment loan, a fixed amount repaid in equal payments over a set term, secured by the vehicle it pays for. The lender can repossess the car if you stop paying. A non-prime car loan is the same loan priced for weaker credit. See our bad credit car loan guide and the car loan rate tracker.
Lines of credit
A line of credit is a pre-set borrowing limit you draw on as needed, paying interest only on what you use (FCAC). The rate is usually variable, so your payment can rise when prime does; prime at the big banks is 4.45% (October 14, 2026, Bank of Canada).
Payday loans
A payday loan is an advance of $1,500 or less, for 62 days or less, repaid by post-dated cheque, pre-authorized debit or a similar future payment (Criminal Code, s. 347.1). Provincially regulated payday loans are exempt from the 35% criminal rate and are capped in dollars instead (SOR/2024-114).
Wage advances
A wage advance is early access to pay you have already earned, before your employer’s payday. NotchUp offers wage advances in BC, Manitoba, Alberta and Ontario. The $5 fee applies when your payroll is connected. A wage advance 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. Fees, fines, penalties and commissions count as interest, so a lender cannot slip under the cap with an “admin fee”.
Advertising an offer above the criminal rate is also an offence. Provincially regulated payday loans, some commercial loans to businesses and pawn loans under $1,000 are exempt, but a consumer car loan is not (Criminal Code, s. 347.1; SOR/2024-114).
The 32% high-cost credit line in Alberta and BC
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). Online operators are included.
Consumer Protection BC licenses consumer credit above 32% APR, with banks and credit unions exempt. A BC borrower may cancel before the end of the lender’s next business day (BPCPA, s. 112.20(1)). Ontario has no such licence.
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%.
Disclosure rules are harmonized through the Consumer Measures Committee. The statement must show the total cost of borrowing and total payments, and any ad quoting a rate or payment must show the APR and term (in Ontario, O. Reg. 17/05, s. 61).
Compare the total cost in dollars
Put the total cost of borrowing side by side, over the same term.
Check the APR
It includes required fees such as admin and brokerage charges.
Check the term
A lower payment over more months usually costs more (FCAC).
Remove credit insurance you don’t want
Optional credit insurance is excluded from the APR.
Get the disclosure statement first
Read it 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. In most provinces “it is illegal for a company to request an upfront fee” (Canadian Anti-Fraud Centre, January 16, 2026). The Centre 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 to complain about a lender
Complain to the lender first, then to its regulator. Every federally regulated financial institution must have a complaint procedure (FCAC, July 15, 2026). Behind on payments? Read what to do if you can’t pay a loan.
- Banks: the FCAC complaints page.
- Ontario: Consumer Protection Ontario; the Ontario Motor Vehicle Industry Council (OMVIC) for car dealers.
- Alberta: Service Alberta’s Consumer Investigations Unit (1-877-427-4088); the Alberta Motor Vehicle Industry Council (AMVIC) for car dealers.
- British Columbia: Consumer Protection BC; the Vehicle Sales Authority of BC (VSA) for car dealers.
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.
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.
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, so 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 Centre.