Work out a fair rate and the monthly payments on a loan to family or a friend — and stay inside Canada's legal limits.
Figures use the standard amortization formula — equal monthly payments, with interest compounded monthly on the declining balance (the same method a bank uses). The rate is an annual rate (APR), as the Interest Act requires. A signed LendRight agreement calculates interest a little differently — daily, on the actual days elapsed, without compounding — so your final Schedule A can differ slightly from these estimates. Note: the LendRight agreement builder uses simple daily interest with no compounding (interest accrues on actual days elapsed), so its schedule can differ slightly from this calculator.
Put this in a real agreement →And that's completely legal. People who do charge it usually pick a small rate, often to offset inflation or to keep things businesslike. There's no "right" number, but two legal limits matter.
Since 2025, charging more than 35% APR is a criminal rate in Canada. This calculator flags anything that gets close — but for family, you'll almost always want to be far below it. LendRight itself stops a step earlier, at 34.5%: the agreement charges interest daily over a 365-day year, so across a leap year a rate parked just under 35% could edge past the line.
If you write a rate for a shorter period ("2% a month") without the yearly equivalent, your recovery can be capped at just 5% a year. Always state the annual rate — which is exactly what this calculator uses.
Who runs this: LendRight is a product of RULE8 Inc.
Last reviewed: July 3, 2026 by the LendRight Editorial Team.
Sources: Criminal Code s. 347 (35% APR criminal interest cap); federal Interest Act s. 4 (annual-rate disclosure); CRA prescribed rate (3% for 2026).
Scope: this calculator is general information, not legal or financial advice. For your situation, a licensed professional is the right call.