How Payday Loans Work in Canada
Payday loans are short-term cash advances that promise quick relief but deliver crushing costs. But if you borrow $100, you'll pay back $115-$125. That means you're paying $15-$25 in fees for borrowing $100 for two weeks, which equals a shocking 400-600% interest rate per year.
If you don't have the money on pay-back day, the lender takes it from your bank account anyway. This can cause your account to go negative, creating more fees. Many people have to borrow again just to pay their bills.
KOHO's Cover bundle offers a smarter alternative
Pay zero interest. Pay back when you can. Get coaching and tools to help you stay out of debt.
Why choose the Cover bundle instead of a conventional payday loan?
When you need fast cash, payday loans might seem like your only option. KOHO’s Cover bundle offers a smarter, fairer alternative that puts your financial wellbeing first, with tools that go far beyond just lending money.
No credit check
Your credit score won’t be affected, and past credit issues won’t be standing in your way.
Zero interest, zero hidden cost
What you borrow is what you pay back.
Instant access to funds
Get money right away—no paperwork, no proof of income required.
Break the debt cycle—and get the support to stay ahead
The Cover bundle helps you move forward, not fall behind like payday loans. Thanks to a subscription that includes financial coaching and tools to help you get and stay ahead.
Apply for a Payday Loan Alternative Online
1. Choose Your KOHO Plan
Start by picking the plan that works best for you. All plans give you access to the Cover bundle.
Apply for a Payday Loan Alternative Online
2. Activate the Cover bundle in the app
Once you've subscribed to a plan, you can sign-up directly in the app with just a few taps.
Apply for a Payday Loan Alternative Online
3. See your approved amount
You'll instantly see how much you qualify for—usually between $20 and $250—plus access to your financial coaching, priority support, and credit monitoring. Your eligibility is based on your account activity and spending patterns.
Apply for a Payday Loan Alternative Online
4. Access the funds and tools right away
The money will be directly deposited into your KOHO account. Use it to make purchases or pay bills.
Compare Cash Loans in Canada
See why KOHO is the smarter choice for your financial needs:
| KOHO | Most Cash Lenders | |
|---|---|---|
| Interest | 0% APR | 29%+ APR |
| Repayment cycle | Anytime | Next Payday |
| Credit check | No | Yes |
| Access | Instant | Up to 24 hrs+ |
| Proof of income | None Required | Required |
| Credit Report | Yes | No |
| Financial Coaching - up to $425 in value but you get it free | Yes | No |
| Priority Support | Yes | No |
| KOHO | Most Cash Lenders |
|---|---|
| Interest | 0% APR |
| Repayment cycle | Anytime |
| Credit check | No |
| Access | Instant |
| Proof of income | None Required |
| Credit Report | Yes |
| Financial Coaching - up to $425 in value but you get it free | Yes |
| Priority Support | Yes |
What our customers say about Cover
FAQS
It’s a short-term loan that gives you instant cash. They often have a short pay-back window, of around 2 weeks or at your next paycheque. They can be an expensive way to borrow, with high fees and interest.
It varies across Canadian provinces and with each lender. Sometimes the lender will do a credit check and ask for proof of income. So it can be tricky to get one if you don’t have a job or you have low credit.
You can apply on a lender’s website or app. To get Cover, head to the KOHO app and apply in minutes. You’ll get same-day cash, guaranteed.
With Cover, an alternative to a payday loan, we don’t ask for a credit check, which is super helpful if you’re new to Canada or you have low credit.
If you’re new to Canada or in-between jobs, you might need some extra cash. Unlike many payday lenders, you don’t need to be employed to get Cover, our pay advance.
You can with Cover. We know sometimes everyone needs extra cash in a pinch. So we’ve made it easy to borrow. No credit check needed.
Payday loans are regulated in many provinces, so there is a maximum amount you can borrow.
To protect yourself, check what’s allowed in your province, and always use a licensed lender with a loan agreement.
Many lenders will give you the money within 24 hours of applying. With Cover, you get a same-day loan.
Payday loans are usually not reported to credit bureaus in Canada. But, if you don’t pay back your loan, the lender may sell your loan debt to a debt collector. They could report this debt to a credit bureau which could hurt your credit scores.
With Cover, we’ll never sell your debt and the loan won’t impact your credit scores.
Learn more about Payday Loans
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In Canada, more and more people are turning to payday loans as a solution to their financial emergencies. This trend is growing because it’s easy to get these loans—often, all you need is proof of income and a bank account.
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There are many types of loans in Canada. Read on to learn more about what you can finance in Canada with a loan.
*Access to Cover cash advance requires subscription to paid Cover Bundle
KOHO
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