More New Brunswickers turn to payday loans as financial struggles deepen

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More New Brunswickers turn to payday loans as financial struggles deepen

New Brunswick·NewPeople in financial distress in New Brunswick were taking out payday loans at a rate of more than 900 a week in 2024, a number that has tripled in just four years. The amount being borrowed has also been climbing. In 2024, the average payday loan was for $415.56, up 20 per cent from 2020. Some borrowers end up juggling multiple loans, say financial counsellorsRachel Cave · CBC News · Posted: Oct 14, 2025 1:11 PM EDT | Last Updated: 16 minutes agoPayday loan borrowing climbed from $5.4 million New Brunswick-wide in 2020 to $20.2 million in 2024. (Erik White/CBC)New Brunswickers are increasingly turning to payday loans to manage household expenses, according to data pulled from the New Brunswick Financial and Consumer Services Commission. Borrowing climbed from $5.4 million provincewide in 2020 to $20.2 million in 2024, even though payday loans are considered a high-cost, high-risk form of credit.“I think there’s a lot more people who are feeling a desperation,” said Jacalyn MacLean, a Saint John certified financial counsellor.”More people in our communities are struggling now when they weren’t 10 years ago and that’s a reality that’s not going to be easily fixed.”New Brunswick’s Cost of Credit Disclosure and Payday Loans Act aims to protect consumers by ensuring the true cost of borrowing is accurately disclosed, up front. In addition to consumer loans and retail credit, the act applies to mortgages, credit card transactions, leases and lines of credit. It speaks specifically to the niche market of payday loans, which are typically taken out in amounts under $500 and repaid on the borrower’s next payday, or up to a maximum borrowing period of 62 days. Only five companies are licensed, specifically, as payday lenders in New Brunswick.WATCH | Why more New Brunswickers are turning to high-cost borrowing:More month than money: Payday loans on the rise in New BrunswickNew Brunswickers racked up $20 million in debt in the form of payday loans last year. On average, 900 loans were taken out each week, a rate that has tripled in just four years.Money in Your Pocket has an office in Saint John but it’s been closed for several weeks. The other licensed lenders — Speedy Cash, iCash, GoDay and Loan Express — all operate online. Online lenders promise convenience, speed and anonymity, since borrowers don’t have to leave their homes to apply. Many promise “approval within minutes” on loan amounts up to $1,500 or 30 per cent of a customer’s net income. In New Brunswick, in 2024, the average payday loan was for $415.56. That’s a 20 per cent increase from what it was in 2020.  “But the problem is, when they get to their next paycheque, they’ve got to pay that back plus the fee,” said MacLean. Jacalyn MacLean says people are feeling increasing pressure just to pay for housing and food. (Submitted by Jacalyn MacLean)The fee on payday loans has been capped since Jan. 1 at a ceiling of $14 per $100 borrowed. The Financial Consumer Agency of Canada says that’s equivalent to an annual interest rate of about 365 per cent and is far more costly than other options, such as taking out a cash advance on a credit card.Those who don’t repay on time can be charged a maximum $20 fee for insufficient funds.  The rules allow one loan per customer per lender at a time, but there are no controls in place to stop someone from spreading their business around. “We do see people with multiple payday loans and really, when we see that, a lot of times people will say to us, ‘I had no choice,’” said Tara Silliker,  a licensed insolvency trustee in Saint John. “You take a loan this month, you pay it the next month, then you have to take another [payday loan] the next month because you’ve used next month’s paycheque to pay last month’s loan. And so people do … get into a cycle with that,” said Silliker.Fewer than half (48 per cent) of payday loan borrowers were able to repay their loan with their next paycheque, according to a survey conducted in December 2022 and January 2023 for the Financial Consumer Agency of Canada. Seven per cent had to take out another payday loan to repay the first. Half were repeat payday loan users, meaning they had taken out two or more payday loans in the last three years. Tara Silliker, a licensed insolvency trustee, sees people juggling multiple payday loans. The New Brunswick Financial and Consumer Services Commission says there are no controls in place that would stop a consumer from going to multiple payday lenders. (Graham Thompson/CBC)Silliker says people who fall into a debt cycle may feel increasingly stressed and isolated. “They often feel like they’re the only one in that situation — and I can tell them, they’re absolutely not.”Money in Your Pocket is the only licensed payday lender with a storefront in New Brunswick. The other four — Speedy Cash, iCash, GoDay and Loan Express — are all online. (Graham Thompson/CBC)Randy Hatfield, executive director of the Human Development Council in Saint John, said he’s also concerned about the growth in other types of high-cost credit, including instalment loans. These are often for larger amounts and are repaid biweekly or monthly, over several years.   This is part of our strategy to help customers progress toward prime credit.- Goeasy Ltd. statementGoeasy Ltd., formerly known as Easy Financial, says its consumer loans in New Brunswick increased steadily from $56.7 million in 2020 to $172.5 million in 2024. The average loan size has also risen. The company said this reflects the impact of inflation on borrowing needs, the natural progression of demand from repeat customers and a shift toward secured lending, or loans that are secured using an asset such as a car for collateral. “This is part of our strategy to help customers progress toward prime credit,” the statement said. People who teach financial literacy advise all borrowers to do their homework on the type of credit they’re considering and the terms of the contract. And in the case of payday lenders, they’re advised to work only with those licensed by the commission. Otherwise, borrowers may be at risk of intimidating collection practices and aggressive communication methods, including the harassment of friends, family or employers, the commission advises. “Some of these unlicensed lenders that we’ve heard about are very intimidating,” commission spokesperson Marissa Sollows said.  ABOUT THE AUTHORRachel Cave has worked as a CBC journalist since 1995. Most of her career has been spent in New Brunswick, hosting and reporting on radio, web and video platforms, following a decade in Toronto, writing for national radio news, CBC Morning Live and The National. Currently, she is working with the Atlantic investigative unit.

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