A payday loan is a short-term, high-interest loan, usually due on your next paycheque. It is an alternative financial service, not a regular bank loan.

Payday loans typically have extremely high interest rates and are a factor in trapping a person in a cycle of poverty. Canada’s criminal interest-rate cap is meant to limit this kind of lending.

Related Lessons

• Click Here for our lesson on Short Term Financing
• Click Here for our lesson on Good Debt, Bad Debt
• Click Here for our Lesson on Financial Resilience and Life Transitions
• Click Here for our lesson on Banks, Credit Unions, and Savings and Loans
• Click Here for our Lesson on Canadian Banking Essentials