In Montreal, a peer-to-peer loan falls under the Civil Code of Québec: it is proven in writing, cannot exceed a 35% annual rate under the Criminal Code, and can be recovered before the Small Claims Division up to $15,000.
A French-speaking metropolis with varied credit needs
Quebec's largest city, Montreal brings together students from McGill, Concordia, UQAM and the Université de Montréal, working holiday permit holders from France and large Haitian and North African communities, many of whom have no Canadian credit history.
Lending money under the Civil Code of Québec
The Civil Code of Québec treats a loan of money as a contract by which the borrower undertakes to return the same sum. If the interest is abusive, the court can reduce it on grounds of lésion, regardless of the federal criminal ceiling.
The federal 35% cap also applies on the island
Quebec law does not set aside section 347 of the Criminal Code: since January 2025, an annual percentage rate above 35% is a criminal offence everywhere in Canada. A Montreal lender who adds file fees and penalties must include them in the calculation.
The Quebec notary, a genuine public officer
Unlike the notary public of the English-speaking provinces, a Quebec notary drafts authentic deeds and keeps the originals. As a member of the Chambre des notaires du Québec, they can record a hypothec securing a private loan on a Plateau-Mont-Royal condo.
Fake notaries and bogus online notarial offices
Fraudsters use the title of notary to reassure victims and demand registration fees. A real notary never asks for payment by gift card. Our page on the fake notary scam in private lending describes how this scenario plays out.
Platforms and Autorité des marchés financiers registration
The AMF, headquartered in Québec City with offices in Montreal, registers brokers and crowdfunding portals. Its register of authorised firms and individuals lets you check within minutes whether a platform approaching Montrealers is actually allowed to operate.
International students: prime targets for fraudsters
A student arriving from Dakar or Lyon with no credit score sometimes looks for a loan to pay higher international tuition fees. Fake lenders approach them in flat-share WhatsApp groups. See also our feature on student peer-to-peer loans.
Declaring interest to Revenu Québec and the CRA
A Montrealer who lends at interest files two returns: the federal T1 and the Revenu Québec TP-1. Interest received is reported on both as investment income. When in doubt, a tax specialist or a chartered professional accountant will settle the question.
Small claims at the Montreal courthouse
The Small Claims Division of the Court of Québec hears claims of up to $15,000, excluding interest, with no lawyer representing the parties. A debt cannot be split to get around this ceiling. The general limitation period is three years.
Option consommateurs and neighbourhood ACEFs
Before signing, a borrower can get free advice from Montreal organisations such as Option consommateurs or a local ACEF, which specialise in budgeting and debt. The Office de la protection du consommateur also answers questions about licensed lenders.
Reporting fraud to the SPVM and the Anti-Fraud Centre
A victim of a fake lender files a complaint with the Service de police de la Ville de Montréal, then reports the scam to the Canadian Anti-Fraud Centre. Keep the Interac transaction number and the conversations, useful even if the culprit is outside Quebec.
Comparing with other major Canadian cities
Provincial rules change west of the Ottawa River: small claims limits and limitation periods differ for a peer-to-peer loan in Toronto. A contract signed in Montreal between Quebec residents, however, remains governed by civil law.
Steps to a secure private loan in Montreal
- Draft a loan contract in French stating names, addresses, the amount in Canadian dollars, term, interest and schedule.
- Calculate the annual percentage rate including all fees to stay below 35% and avoid a reduction for lésion.
- For a large amount or a hypothec, have the deed drawn up by a member of the Chambre des notaires du Québec.
- Transfer the funds by Interac or bank transfer from a caisse or a bank, with the word loan in the reference.
- Check any unknown platform or lender in the AMF register and the Office de la protection du consommateur list.
- Record every repayment received and report the interest on the federal T1 and the Quebec TP-1.
Indicative fees and caps for a loan in Montreal
| Item | Order of magnitude | Comment |
|---|---|---|
| Interest between individuals | 0% to 35% APR (indicative) | Federal criminal cap, possible reduction for lésion |
| Notarial hypothec deed | Fees in CAD depending on the notary | Land register publication extra |
| Small claims filing | Court fees based on the amount | Ceiling of $15,000 excluding interest |
| Tax on interest received | Combined Quebec and federal marginal rate | T1 and TP-1 returns |
| Fees demanded by a fake lender | Loss of all sums paid | Refuse gift card or cryptocurrency payments |
Documents to gather in Montreal
- Passport, Quebec driving licence or study permit for an international student
- Signed loan contract and, where applicable, notarial deed
- Void cheque from the bank or Desjardins caisse
- Revenu Québec notice of assessment or recent pay slips
- Dated repayment schedule
- Proof of the initial Interac or bank transfer
Mistakes and warning signs in Montreal
- Accepting a loan promised in a Facebook group of Montreal expats in return for insurance fees payable before the payout.
- Believing a so-called notary from Laval or Longueuil who demands a bitcoin deposit at a cryptocurrency ATM.
- Lending several thousand dollars to a flatmate with nothing in writing, then finding they have left for good after the semester.
- Setting monthly fees that push the annual cost above 35%, leaving the agreement open to civil and criminal challenge.
- Sending a photo of your health insurance card or social insurance number to a stranger to obtain credit.
Montrealers' questions about private loans
Is a loan contract written in English valid in Montreal?
Yes, two individuals are free to choose the language of their contract. Writing it in a language both parties fully understand remains essential, especially between international students. A Quebec notary or lawyer can check the translation of key clauses.
Do you need a notary to lend $5,000?
It is not compulsory: a private written agreement signed by both parties is enough as proof. A notary becomes useful if the loan is secured by a hypothec on property, which requires a notarial deed and publication in the Quebec land register.
Can I represent myself at small claims in Montreal?
Yes, that is actually the rule: lawyers cannot represent the parties before the Small Claims Division. Legal information services and the mediation offered by the Court help you prepare your file, up to a $15,000 claim.
How can you spot a fake lender targeting newcomers?
They promise a loan with no checks, communicate only by messaging app, mention a notary or lawyer who cannot be found and demand fees before any payout. Check their registration with the AMF or the Office de la protection du consommateur first.