What an installment loan costs

The cost of a loan is everything you pay back on top of the amount you borrowed. Most lenders in our network lend $300 to $3,000 over 90 to 120 days, at an annual percentage rate (APR) of 22% to 32% depending on the risk of the application. Terms vary by lender, and membership fees may apply.

A worked example

Here is what a $300 loan at the top of that range looks like. The figures are an example for illustration only.

You make a payment every two weeks, usually on your payday, and after seven payments the loan is paid off. You repay $314.93 in total, so borrowing $300 for about three months costs $14.93.

Why a 32% APR doesn't mean paying 32%

An APR is a yearly rate. It tells you what the loan would cost if you kept the money for a full year. Installment loans in our network last 90 to 120 days, and you repay part of the balance with every payment, so you pay interest on a smaller amount each time.

That's why, in the example, a 32% APR on $300 comes to $14.93 rather than $96. The APR is still the best number for comparing offers, because it puts loans of different lengths and amounts on the same scale.

What changes the cost

• The amount. Borrowing $1,000 costs more in dollars than borrowing $300 at the same rate and term.
• The rate. Each lender sets its own APR, based on the risk of your application.
• The term. A longer loan means smaller payments, but you pay interest for longer.
• Fees. Membership fees may apply. Ask the lender for a list of every fee and what it's for before you sign.
• Missed payments. A missed payment can bring fees. If you think you'll miss one, call your lender before the date: lenders can often move a payment.

Canada's legal limit on interest

Since January 1, 2025, the Criminal Code makes it a crime to lend at an annual percentage rate above 35%.

Payday loans follow different, provincial rules. The loans in our network are installment loans, repaid over several months.

Before you sign, check

• The amount you'll receive in your bank account
• The annual percentage rate
• Every fee, what it's for and when you pay it
• Each payment amount and date
• The total you'll repay
• What happens if a payment is late or missed
• Whether you can repay early, and whether that costs anything

Your lender shows you the actual amount, rate, fees and schedule before you sign. If something isn't clear, ask before you agree. You can always say no to an offer.

Is a loan the right choice?

An installment loan can cover a short gap, but it's still debt. Borrow only what you need and can repay on time, and avoid having several loans at once. If you're behind on several bills, a non-profit credit counsellor can help you look at your options for free.

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Urgent Loans is not a lender. All amounts on this page are examples for illustration only. See how it works for the steps after you apply.