Taking out a Payday Loan?

Be sure to read all the paperwork and contracts carefully. Ask questions if you don't understand what you are asked to sign.

Make sure that you are given a copy of any agreements you sign. If you aren't offered copies, ask for them. If the lender will not give you copies, do not sign the agreement, and contact Service Nova Scotia and Municipal Relations.

Make sure you understand all the fees and charges connected to the loan – there may be administration, verification, brokerage or processing fees as well as interest. These fees should all be included in the statement of the cost of borrowing, and cannot bring the total over the maximum.

Think twice if the lender offers you a bank account, debit or credit card as a way to access your loan. There are often high fees and charges for these add-ons. You are not required to buy any other products or services in order to get a loan. This includes insurance.

If a lender refuses to give you your loan without one of these fees or says it will take more time to give you your loan if you get a cheque, do not sign the agreement, and contact Service Nova Scotia and Municipal Relations.

After taking out a loan, if you don't feel comfortable with the agreement, you have until the end of the next business day to change your mind. Consider going over the paperwork with someone you trust.

The lender must give you a cancellation form when you sign the loan. Take time to get advice from someone you trust.

If you do change your mind, you must inform the lender in writing, using the cancellation form. You must return all the money you have borrowed.

If you do go through with the loan, do your best to make your payments on time. If you are able to pay back the loan before it is due, you may save some of the cost of borrowing. The lender is not permitted to charge you a fee to do this.

• The lender may also charge you extra fees for late payments.

If you are looking for more general information about payday loans (be aware that the rules in Nova Scotia may be slightly different than the ones explained), the Financial Consumer Agency of Canada has a guide available online The Cost of Payday Loans.