Rules · The criminal rate of interest
The criminal rate of interest in Canada
The federal criminal rate of interest is 35% per year. It applies across Canada and sets the outer limit for the cost of consumer credit, calculated using a defined method that aggregates interest and certain charges.
Published values
| Item | Value | Note | Publisher |
|---|---|---|---|
| Criminal rate of interest | 35% per year | In force since 2025-01-01. Calculated by the method in s. 347, which aggregates interest and certain charges. | Government of Canada (Justice Laws) |
| Applies in | All provinces and territories | The provision is federal criminal law. | Government of Canada (Justice Laws) |
| Provincial variation | confirm with the publisher | Provinces may add licensing and disclosure requirements but cannot authorise a rate above the criminal rate. | Financial Consumer Agency of Canada |
A blank value means we could not verify a current figure against the publisher's own publication. We leave it blank rather than publish a guess.
What the ceiling is
The Criminal Code makes it an offence to enter into an agreement for credit at a criminal rate of interest. The rate is defined by a formula that converts interest and certain charges into an effective annual rate, rather than adding up headline percentages.
Why the calculation method matters
Because the definition aggregates charges over the term of the agreement, a product with a modest headline rate but heavy fees over a short term can have a much higher effective rate. That is the point of the provision: it looks at what the borrower actually pays.
How it interacts with provincial rules
Provincial consumer protection law sits on top of the federal ceiling. A province can require more disclosure, cap a specific product's cost, or license a category of lender, but it cannot authorise an interest rate above the criminal rate.
What it does not do
The ceiling does not make borrowing cheap, it does not cap fees that fall outside the definition, and it does not resolve a dispute about whether a particular charge is properly included. If you think an agreement breaches the provision, that is a legal question for a lawyer.
How the effective rate is calculated
The provision does not simply compare a headline percentage to a threshold. It uses a prescribed method that turns the cost of the credit — interest plus the charges the definition captures — into an effective annual rate over the life of the agreement. That is what makes it meaningful for products where the cost is expressed as a fee rather than a rate.
What this means in practice
Two consequences follow. First, a product marketed at a modest rate can breach the ceiling if enough charges accumulate over a short term. Second, comparing products on headline rates alone is unreliable, because the charges that decide the effective rate are often disclosed separately.
Where the ceiling stops
It is a criminal provision, not a consumer remedy with a simple complaint route. Whether a particular agreement breaches it is a legal question, and the practical answers are usually found in provincial licensing rules, regulator guidance and the cost-of-borrowing disclosure a lender is required to give you in writing.
Questions
What is the maximum legal interest rate in Canada?
The criminal rate of interest is 35% per year. It is set out in section 347 of the Criminal Code and applies across Canada.
Does the ceiling include fees?
The definition aggregates interest and certain charges using a prescribed calculation, so fees can form part of the effective rate. Whether a specific charge is included can be a legal question.
Does the ceiling apply to payday loans?
Payday lending is addressed by separate federal regulations that cap the cost of borrowing in provinces that license the product, and the criminal rate provision still stands behind the whole framework.
Compare loan options
We match, we do not lend, and no amount, term or rate is promised here.
LoanGoose is a loan matching and comparison service, not a lender. We do not make loans, set rates or make credit decisions. We may earn a commission when you click or apply through our links. The lowest rates are only available to the most qualified applicants.
Sources
Every figure on this page is attributed to the publisher above. Where a value could not be verified against the publisher's own publication, it is left out rather than estimated.