Compare cheap personal loans

Want to get a loan without overspending on rates and fees? Find out how to get a cheap personal loan.

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If you’re in the market for a personal loan, one of the most important features to consider is the cost of the loan.

In this guide, we take you through what to look for when it comes to cheap personal loans and what to consider before you apply.

How cheap is a “cheap” personal loan?

This depends on the type of loan you’re looking to apply for. For example, a secured personal loan will usually have lower rates than an unsecured personal loan, since you’re securing the loan with collateral.

A low-interest personal loan can range from as low as 4% to 12%. To qualify for a low-interest rate, you will need to have a good to excellent credit score of 650-900.

How to find out if a personal loan is competitive

The best way to find out the true cost of a loan is to calculate the APR.

  • APR. The Annual Percentage Rate (APR) incorporates the fees as well as the interest rate to show you the true cost of the loan. Comparing APR’s across different loans is the best way to find the cheapest loan.

It’s also important to consider:

  • Interest rate. Interest rates are important individually as they can give you an idea of the cost of a loan, however you must also consider fees since they can drastically change the total cost of your loan.
  • Upfront and ongoing fees. These fees will be added onto your principal loan amount and will therefore affect your repayments and the interest you have to pay.

What else should you consider besides the cost of the loan?

Besides the interest rate, fees and APR, you can consider the following:

  • Repayment flexibility. Check whether you’ll be able to make additional or early repayments without facing fees.
  • Loan terms. The shorter the loan term, the higher your repayments will be. However, your loan cost will be cheaper.
  • Type of interest rate. Your loan can either be fixed or variable, and both of these rates will come with different features.
  • Loan amount. Check what the minimum and maximum borrowing amounts are and if they meet your needs.

Are you eligible for a personal loan?

Eligibility requirements may vary between lenders, however, you will usually need to meet the following criteria:

  • Be 18 years of age or the age of majority in your province or territory
  • Be a Canadian citizen or a permanent resident with a valid Canadian address
  • Have proof of a steady income
  • Have a debt-to-income ratio of less than 43%
  • Meet any minimum income or credit score requirements
  • Have a working bank account

If you find you don’t meet all the eligibility criteria on your own, you could consider a joint application personal loan to increase your chances of approval.

How to apply for a cheap personal loan

After you’ve done your research and found a personal loan you’d like to apply for, you can apply online by navigating to the lender’s online application form. You can usually apply online in less than 10 minutes if you have the necessary information handy. While the specific information you’ll be required to submit will differ between lenders, it’ll usually include:

  • Personal details including your name, contact details and proof of your identity
  • Details of your employment including your income and type of employment
  • Financial details including your assets and debts

Frequently asked questions

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