What Is The Payday Loan Cooling-Off Period?

Blog Header- PDL Cooling Off

“Can I cancel my payday loan” is a question we get every-so-often, and the best general answer is “it depends”. Cancellations are certainly a right of a payday loan customer, but there are rules and regulations that apply to that right to cancel.

ONTARIO

The Ontario Payday Loan Act stipulates the following;

30. (1) A borrower under a payday loan agreement may, without any reason, cancel the agreement at any time up to the end of,

(a) the second day after the time that the lender complies with subsections 29 (1) and (2), if the lender is open for business on that day;

or

(b) the next day that the lender is open for business following the second day described in clause (a), if the lender is not open for business on that second day. 2008, c. 9, s. 30 (1).

Generally speaking, you can cancel your payday loan agreement within 2 business days that you signed said agreement. This is what’s referred to in the industry as the “cooling-off period”. Perhaps you rushed into the agreement too quickly. Or maybe a friend or family member is now able to loan you the money instead. It doesn’t really matter the reason why you want to cancel, since you are not obligated to tell your lender why. You can simply state that you’ve changed your mind and would like to cancel your agreement.

Your Obligations

You MUST notify your lender no later than the end of the second business day from the moment your loan funds were recieved. For example, if you recieved your loan on Wednesday morning, you need to contact your lender to cancel no later than by the end of business day on Friday. Remember that “end of business” varies by each lender. Weekends are a bit trickier, since not all lenders operate on Saturday’s and Sunday’s. If you signed your loan agreement on Friday morning, but your lender is closed on the weekends, you have until the end of business on Tuesday.
If you signed your loan agreement on a Thursday, but your lender is open on Saturday’s, you have until end of business on Saturday to cancel.

If you took out a loan at a retail establishment, you must return the money in person OR arrange to have it debited from your bank account. You are only required to return the principle of the loan, not the fees.

If you took out a loan with an online payday lender, they will arrange to “PAD” (pre-authorize debit) your account to retrieve the funds. If you’ve taken an online loan with GoDay, we’re open 7 days a week.  You can notify us of the cancelation of your loan and return funds by sending an email money transfer to [email protected]  Specific details regarding the cancelation of your loan cound be found in your loan agreement.  Some provinces require a Cancelation Notice form be submitted together with the funds that are returned.  Any Cancelation Notice Forms can be found on the last page of your Loan Agreement package (after the PAD form).  For assistance canceling a GoDay Payday Loan, please don’t hesitate to contact our Customer Service Team by email ([email protected]) or phone 888-984-6329.

The Lender’s Obligations

If you took out a loan at a retail establishment, they are required to return all pre-authorized debit forms or post-dated cheques to you.
If you took out a loan with an online payday lender, they will keep your information on file, generally for ease of future transactions (though your information must be protected under the Privacy Act).

What You Cannot Do

If you’re beyond the 2 day cooling-off period, you are no longer eligible to cancel your loan without the originally agreed upon fees. You are, however, allowed to repay the loan, even if you haven’t used a dime of it, before your repayment date.  At GoDay, you can re-pay your loan at any time.  If you reside in the province of Alberta, Saskatchewan, or Nova Scotia and you re-pay early then you will only be charged the pro-rated fees associated with your loan.  Early payments can be sent by email money transfer to [email protected] or you can contact the Customer Service Team to setup an early payment by direct debit ([email protected]).

BRITISH COLUMBIA

The Business Practices and Consumer Protection Act (Part 6.1 – Payday Loans) in British Columbia has similar protections in place as Ontario.

” (1) A borrower may cancel a payday loan at any time before the end of the next day that the payday lender is open for business following the date on which the borrower receives the first advance, or before the end of any longer period that may be prescribed in the regulations”.

At GoDay, our agreements state that as the borrower “You may cancel the agreement within two (2) business days of receiving the advance. If such day is a holiday or a day on which GoDay is not open for business, the time for exercising your cancellation right is extended to the end of the next day that GoDay is open for business.”

This is very similar to the stipulations apply as in Ontario, in terms of “next business day”.  In BC, we do require a Cancelation Notice Form be sent into our office by email or fax ([email protected]) and the funds returnes as per the loan contract.  Don’t hesitate to contact our Customer Service or Payments Teams for additional information.

ALBERTA

Like Ontario, Alberta payday loan regulations offer a 2 business day cooling-off period.

Learn even more about your rights and responsibilities when taking out a payday loan here.

2 thoughts on “What Is The Payday Loan Cooling-Off Period?

  1. Your cancellation rules are incorrect making them technically illegal. The BPCPA states that in BC we have until the end of the second business day to repay and cancel a loan per the Payday Loans Regulation section 14.2

    Please clarify why yours states 1 business day

    • Hi Donalda,
      Thank you for your comment! You are correct, you have two days to cancel the advance. As per section 12 of the GoDay loan agreement, it states: “You may cancel the agreement within two (2) business days of receiving the advance. If such day is a holiday or a day on which GoDay is not open for business, the time for exercising your cancellation right is extended to the end of the next day that GoDay is open for business.”
      Please let us know if you have any questions or concerns about this – our team is happy to help!
      Kind regards!

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