National Study on High Interest Loans


Brenda Spotton


Association of Community Organizations for Reform Now (ACORN) Canada




Recent studies indicate that the number of low and moderate income earners who can borrow from mainstream banking institutions is decreasing. As a result, low-income households are turning to high-cost credit loans for financial services, such as payday and installment loans. In addition, much of the high-cost credit market is moving online where it is not licensed or regulated.

There is limited information available about the experiences of clients who use online high-cost credit products. The purpose of this study is to fill the knowledge gap by gathering data on low-income Canadians’ experiences with high-cost credit lenders.

The study’s recommendations were grouped into two categories: high interest loans and online loans. The first category of recommendations included a call for banks to provide low-interest credit for emergencies, as well as overdraft protection. It was also recommended that the federal government lower the maximum loan interest rate. The second category of recommendations included a call for provinces to regulate installment loans and that online lenders disclose all costs and optional fees associated with their service.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.

Contact information

ACORN Canada
715B Danforth Ave
Toronto, ON
M4J 1L2
(416) 461-5322

Source: Consumer Policy Research Database

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