Car loan rules in Canada
- Lenders must disclose the APR and total cost of borrowing. When interest is the only cost, the APR equals the interest rate; required fees and insurance raise it (Cost of Borrowing Regulations).
- Bank loans can be repaid in full at any time with no charge or penalty (Bank Act s.627.28). Non-bank and dealer loans fall under provincial law, which is generally similar.
- The criminal interest rate limit is 35% APR (Criminal Code s.347).
Sources: Cost of Borrowing Regulations · Bank Act s.627.28. Rules checked October 2026.
How to use this calculator
Choose Find my APR and enter the price, your down payment, the term and the monthly payment from your offer. The calculator works backward to the APR that lenders in Canada must disclose, and shows the same loan as a nominal rate and an effective rate. Choose Find my payment to turn a quoted rate into a monthly payment. All figures are in CAD and you can switch country at the top of the page.
Frequently asked questions
How is APR shown on a Canadian car loan?
Lenders must disclose the APR and the total cost of borrowing. When interest is the only cost, the APR equals the interest rate; required fees and insurance raise it.
Can I pay off my car loan early in Canada?
Bank loans can be repaid in full at any time with no penalty under the Bank Act. Dealer and other non-bank loans follow provincial rules, which are generally similar.
What is the highest legal interest rate in Canada?
Since January 2025 the criminal interest rate limit is 35% APR.
How long can a car loan be in Canada?
Terms of 84 and 96 months are common, but longer terms mean more interest and a higher chance of owing more than the car is worth.