Instant bank verification for loans

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:

1. 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.
2. 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.
3. 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.

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:

BMO CIBC RBC Scotia TD ATB

Coast Capital Desjardins EQ Bank FlinksCapital Laurentienne Meridian

National Simplii Tangerine Vancity

Sample of what you’ll see on an application:

What are the pros and cons of bank account verification?

Can I do a manual review instead?

It depends. Some lenders will give you the option to verify manually or through online bank verification, while others will only accept instant bank verification. Examples of lenders that give you the choice are Loanz and Money Mart.

Compare personal loans with bank verification

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.

Frequently asked questions

• What types of loans can I get with instant bank account verification?

  You can apply for online personal and payday loans using instant bank account verification as long as the lender you choose supports this option.

• Will the lender be logging into my bank account?

  Definitely not. Your lender won't even be able to view credentials such as your username or password, let alone access your bank account. The only thing they will get, once you sign in, is a copy of your bank statement. This will be provided to them by your financial institution once you validate your bank login information.

• How do I know whether a lender requiring instant bank verification is not a scammer?

  You can check its online customer reviews, along with reviews from trusted sites such as Finder Canada or the Better Business Bureau. You can also follow some of the tips outlined above for how to protect yourself, and make sure you're using a legitimate website. Browse personal loan reviews.

• Will I still have to go through 2-factor authentication if it's enabled on my account?

  Yes, your bank will make you follow the same process you usually follow to access your regular bank account. You may be required to input codes sent to your phone or email to validate that it's you signing into your account if you have 2-factor authentication enabled.

• Is Flinks legit?

  Yes, Flinks is a legitimate service that's owned by one of Canada's largest banks, National Bank. You can learn more in our Flinks review.