Reference
Canada's Criminal Rate of Interest
Section 347 of the Criminal Code sets the criminal rate of interest at 35% per year, calculated in accordance with the section. It is the general ceiling for consumer credit in Canada, and licensed payday lending sits outside it as a defined exception.
The criminal rate is not simply the headline interest rate. The section uses a defined method that converts fees, charges and other costs into an effective annual rate, which means a product with a low stated rate but heavy fees can still exceed the ceiling.
Where a province operates a licensed payday lending regime, payday loans are excluded from the criminal rate and instead governed by the federal payday lending regulations, which currently cap the cost of borrowing at $14 per $100 advanced. Quebec does not license payday lending.
| Jurisdiction or item | Published value | Publisher | As of |
|---|---|---|---|
| Criminal rate of interest (Criminal Code s. 347) | 35% per year | Justice Laws Website, Government of Canada | 2026-09-17 |
| Payday lending exception | Where a province licenses payday lending | Canada Gazette, Government of Canada | 2024-06-19 |
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Frequently asked questions
What is the maximum legal interest rate in Canada?
The Criminal Code sets the criminal rate of interest at 35% per year. Licensed payday loans are a specific statutory exception.
Does the criminal rate include fees?
Yes. Section 347 uses a defined calculation that takes interest and certain charges into account to arrive at an effective annual rate, so fees can push a product over the ceiling.