Instalment Loans

What is an Instalment Loan?

A short-term unsecured instalment loan is a loan that is usually a larger amount than a payday loan. It can be paid back over a longer period than a payday loan, with a set number of monthly payments.

The advertised cost of an instalment loan is usually lower than the advertised cost of a payday loan, but it can still be much more expensive than other types of loans (e.g., cash advance on a credit card, line of credit, secured loan from a bank or credit union). Instalment loans from lenders such as payday lenders or cheque cashing businesses are usually much more expensive and risky than instalment loans from banks or credit unions.

Try to pay back your instalment loan as quickly as possible, and take a loan for the minimum amount you need, to avoid mounting interest charges and late fees.

More information is available on the Things to Think About when Choosing a Loan or Other Financial Service page.

Borrower Beware: What to Ask About an Instalment Loan

As instalment loans can be an expensive type of loan, they can be risky for the borrower. If you are thinking of using an instalment loan, think carefully about the points listed on the Things to Think About When Choosing a Loan or Other Financial Service page and whether alternatives  might be available to you. Many payday lenders also offer instalment loans.

Also be aware of lead generators when applying for an instalment loan.

Remember that you have rights when applying for an instalment loan or other financial service.

Instalment Loans – Who can I talk to if I have Concerns about an Instalment Loan or an Instalment Lender?

Although instalment loan providers do not need to be licensed in British Columbia, they must still operate in a fair way and in accordance with B.C.’s consumer protection laws. 

If you have concerns about an instalment loan provided by a bank, information on filing a complaint about a bank is available on the Financial Consumer Agency of Canada website. You can also send your complaint to the Ombudsman for Banking Services and Investments.

If you have concerns about an instalment loan provided by a credit union, the Financial Institutions Commission may be able to help. As provincial credit unions are member-owned, you are also encouraged to contact your credit union directly.

If you have concerns about an instalment loan provider that isn't a bank or credit union, you can contact Consumer Protection BC at info@consumerprotectionbc.ca or 1 888 564-9963 (toll-free).