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Canada’s Criminal Rate of Interest

A borrower-focused explanation of Canada’s 35% APR criminal-interest framework, the January 2025 reforms, payday-loan exemptions and why provincial rules still matter.

Reviewed: August 19, 2026 · Canadian consumer lending · Primary-source grounded
Key point: Canadian lending rules depend on both the credit product and the provider. Federal boundaries can operate alongside provincial licensing, disclosure and consumer-protection rules.

Canada changed its federal criminal-interest framework effective January 1, 2025. The previous equivalent of 48% APR was lowered to 35% APR. Federal amendments also strengthened the rules around offering and advertising credit above the criminal rate.

What 35% APR does—and does not—mean

The criminal-interest rule is a federal legal boundary, not a recommendation that a 34% loan is affordable. Provincial consumer-credit laws can impose additional licensing, disclosure and conduct requirements. Alberta and British Columbia, for example, regulate a category of high-cost credit beginning around the 32% level.

Payday-loan exemption framework

Payday loans have a special framework. Federal reforms effective January 1, 2025 capped the cost for qualifying payday loans at no more than $14 per $100 borrowed under the Criminal Code exemption structure. Provincial licensing and borrower-protection rules remain essential.

Why APR needs context

APR is useful for comparing borrowing costs across time, but borrowers should also calculate the total dollars repaid and payment schedule. A short-term flat charge can annualize to a very large APR, while a longer loan can produce a large total dollar cost even at a lower annual rate.

How this connects to your province

Use the Canada Digital Lending Knowledge Center to open your province guide. Provincial pages identify local payday-lending, licensing and consumer-protection sources. Do not assume that a rule described for one province applies unchanged in another.

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Primary sources

AppLoans prioritizes government and regulatory sources. This page is educational information, not legal or financial advice. Rules can change; verify current requirements with the applicable regulator.