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Instant bank verification for loans
Learn how instant bank verification works for loans, and find out if it's safe.
As part of your loan application, you may be asked to sign into your bank account through a secure online portal to verify your identity and income. This is a common practice for online lenders and is nothing to be concerned about as long as you trust that your lender is legitimate. However, if you feel uncomfortable, you can often verify your information manually as well.
How does instant bank verification work?
Bank account verification is a secure service that lets you verify your identity and income when applying for online loans in Canada. It works in the following way:
- You sign into your bank account through a secure portal that’s connected to your lending application. The portal should be hosted by a trusted third party and not your lender.
- Your bank will then instantly validate your personal details in addition to sending your lender a temporary copy of your bank statement to verify your income.
- Lenders use this bank statement to validate your application and to decide if you should be approved.
The main benefit of this service is that you won’t need to waste time faxing in documents or trying to upload your ID and bank statements onto an online platform.
Is bank verification safe?
Bank account verification is safe as long as you’re working with a legitimate lender. Online loans in Canada with bank verification come with the following safety features:
- Hosted by a third party. Lenders don’t typically host the bank verification portal. They will simply receive a copy of your bank statement once you validate your credentials with your bank. This provides an extra layer of security.
- Approved by your bank. The portal is approved by your bank as long as its name is on the list of eligible institutions you can verify.
- Encrypted. You’ll verify your account using a bank-grade 128-bit or higher SSL-encrypted portal. Your lender won’t see your banking credentials or be able to access your account.
Keep in mind that there’s always a small chance that you could end up with a fraudulent lender. This means your banking details might be used for activities such as identity theft. It’s important to be vigilant and ensure you’re working with a reputable lender on a secure site before you input any personal information.
Sample of legitimate lenders that do instant bank verification:
What banks can be verified?
The banks that can be verified by each portal may differ based on which third-party provider your lender uses. Usually, you can verify Canada’s Big Five banks along with several credit unions and well-established online banks.
Below is a sample of banks you might find when applying for online loans in Canada:
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Sample of what you’ll see on an application:
What are the pros and cons of bank account verification?
Pros
- Easy. All you need to do is enter your bank credentials and go through 2-factor authentication (if enabled on your account) to get verified.
- Fast. It takes less than 2 minutes to sign into your account with most platforms, and you’ll be approved faster than if you manually verify your information. Learn more about fast and easy loans.
- Secure. Instant bank verification portals are usually equipped with bank-level encryption and they won’t share your username or password with your lender.
- Convenient. You don’t have to manually upload or send in your ID documents and bank statements to get approved for instant bank verification loans in Canada.
Cons
- Not all lenders offer it. Some lenders still require you to manually upload all of your documents, though instant bank verification is becoming more common.
- Your bank might not participate. You may not be able to use bank account verification if your bank is less established or not well known.
- Potential for fraud. You could end up providing your bank account information to a fraudulent lender, who may scam you or steal your identity.
- Difficult to spot a scam. Scams are getting more sophisticated and it can sometimes be difficult to tell which lenders or platforms are legitimate.
Can I do a manual review instead?
You can do a manual review with most lenders. The majority will give you the option to verify manually or through online bank verification. There are a select few that only let you verify your account through your bank and some others that only offer manual verification.
You may need to shop around to find the lender that offers the bank account verification option that you’re most comfortable with.
Ready to apply? Compare personal and payday loans
⚠️ Warning: Be cautious with payday loans
Payday loans are expensive. If you're experiencing financial hardship call Credit Counselling Canada for free financial counselling (Monday-Friday 8:00am-5:00pm at +1 866-398-5999). Consider payday loan alternatives:- Visit 211.ca. A free and confidential service that connects you to organizations that can help with finances, food, housing and more.
- Debt relief companies. There are services to help you reduce your debt payments.
- Payment extensions. Talk with bill providers about longer payment plans or due-date extensions.
- Side jobs. Sell unwanted items online, sign up for food delivery and more.
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Maximum borrowing costs of payday loans per province
Always refer to your contract for exact repayment amounts and costs as they may vary from our results.| Province | Maximum allowable cost of borrowing |
| Alberta, British Columbia, New Brunswick, Ontario & PEI | $15 per $100 borrowed |
| Manitoba, Saskatchewan & Nova Scotia | $17 per $100 borrowed |
| Newfoundland and Labrador | $14 per $100 borrowed |
| Northwest Territories, Nunavut & the Yukon | Up to $60 per $100 borrowed |
| Quebec | Limit of 35% annual interest rate (AIR) |
How can I protect myself online?
Keep these tips in mind to protect yourself when applying for loans online:
- Make sure your lender is trustworthy. Look up customer reviews and reviews from trusted sources to make sure your lender has a good reputation. If you can’t find much or you see a pattern of bad reviews, you may want to look elsewhere.
- Check for a secure URL. A secure URL should begin with “https” rather than “http”. The “s” in “https” indicates that the site is using a Secure Sockets Layer (SSL) Certificate, which encrypts your data and protects your personal information.
- Confirm the website address. Make sure you are on a valid website by reviewing the grammar, spelling and punctuation used in the website address. A missing letter or typo may be a clear sign that the site is not secure and may be a scam.
- Never follow a link from an email. Always visit your lender’s website from your browser instead of following a link from an email. You should also never verify your banking details through an email request.
- Look up the name of the associated banking portal. Confirm which bank verification portal your lender uses and double-check its validity online before you enter your personal information. Common sites include Inverite, Flinks, Plaid and TrueLayer.
Learn about personal loan scams and compare legit lenders
Bottom line
Instant bank verification can be an easy, convenient and secure way to verify your identity and income when you apply for loans online. Just be aware that there’s still the possibility of running into a fraudulent lender. Make sure you trust your lender fully before you apply for an online loan with bank verification, or opt for manual bank verification if you’re not sure.
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