Finder makes money from featured partners, but editorial opinions are our own.

How to get a loan with no credit history in Canada

No credit? Compare 10 ways to get a loan with no credit history.

Your credit history is a key factor lenders consider when you apply for a loan. But if you’re a student or a newcomer to Canada, you might not have any credit history at all. This can make it difficult to get approved for a loan, but definitely not impossible.

In this guide, we’ll show you how to get a loan with no credit in Canada, and provide tips on how to increase your chances of approval.

1. Get a small personal loan from an alternative lender

You’ll struggle to get approved by a bank if you have no credit history, but that’s not the case with alternative lenders. Many online lenders specialize in personal loans with no credit or bad credit — rather than checking your credit score, they check to see whether you have a steady income and can afford to repay what you borrow.

You can apply for an installment loan online, and it’s possible to get approved and funded within 24-48 hours. However, your lack of credit history means the lender is taking on extra risk, so you can expect high interest rates.

Tip: Some online lenders offer online bank verification, which allows them to check your bank statements electronically. This speeds up the approval process and means you don’t have to upload additional documents — but make sure you’re dealing with a legit lender before sharing any financial information.

Pros

  • Plenty of options to choose from
  • Easy to apply online
  • Fast access to funds

Cons

  • Higher interest rates for no-credit borrowers
  • Watch out for loan fees
  • You’ll need to make sure you’re dealing with a legitimate lender

Compare installment loans for people with no credit history

1 - 6 of 6
Name Product Ratings Interest Rate Loan Amount Loan Term Requirements
LoansLoans.ca Installment Loan
Finder Score
★★★★★
28.00% - 32.00% + broker fee
$500 - $1,000
3 months
Requirements: min. income $1,200, 2+ months employed. No credit check required.

Note: You may be charged a broker fee up to $300.
Fat Cat Loans Personal Loan
Not yet rated
4.84% - 35.99%
$300 - $50,000
3 - 120 months
Requirements: min. income $1,000/month, min. credit score 300
Spring Financial Installment Loan
Finder Score
★★★★★
Customer Survey:
★★★★★
9.99% - 46.96%
$500 - $35,000
6 - 60 months
Requirements: min. income $1,800/month, 3+ months employed, min. credit score 500
Loans Canada Installment Loan
Finder Score
★★★★★
Customer Survey:
★★★★★
8.00% - 46.96%
$500 - $50,000
4 - 60 months
Requirements: min. credit score 300
LoanConnect Installment Loan
Finder Score
★★★★★
Customer Survey:
★★★★★
32.00%
$500 - $2,500
3 - 6 months
Requirements: min. credit score 300
SkyCap Installment Loan
Finder Score
★★★★★
Customer Survey:
★★★★★
19.99% - 39.99%
$500 - $10,000
9 - 60 months
Requirements: min. income $1,666.67/month, full time employment/pension, min. credit score 575, no bankruptcy
loading

2. Sign up with a pay advance app

Pay advance apps like Nyble and Bree allow you to access a small loan (typically up to $200) to help you get through to your next payday. There’s no interest and no late charges to worry about, and your loan repayment is automatically deducted from your bank account when you get your next paycheque. However, you’ll typically need to pay a subscription fee to use a pay advance app.

Tip: To approve you, the lender may require view-only access to your bank statements. Make sure you have steady income coming in and you don’t have NSF transactions in the last several months to boost your odds of approval.

Pros

  • No interest charges
  • No late fees
  • No credit checks
  • Quick and easy to apply

Cons

  • Monthly subscription fee applies
  • Extra fee applies if you want the money instantly
  • Pay advance amount may not be enough for your needs

Compare early pay advance apps

1 - 2 of 2
Name Product Loan Amount Loan Term Fees Offer
Nyble Credit Line
$30 - $150
Flexible
$4.99 - $7.99/month membership fee
Use code CFIND1J to get 500 extra points and a $5 higher approval. Conditions apply.
Cover living expenses, unexpected bills and overdrafts with a small interest-free credit line. Membership fee includes credit monitoring, overdraft protection, rewards and more. No credit check required. 14-day free trial, cancel anytime.
Bree Early Pay
$20 - $250
Next pay cycle
No interest or mandatory fees
Access up to $250 to prevent overdraft. Pay no interest or fees - instead leave an optional tip. Get approved in minutes.
loading

3. Get a small personal loan from a credit union

Not all credit unions provide personal loans for people with no credit history, but some do. For example, Vancity offers its Fair and Fast Loan, while Affinity Credit Union offers its Restart Loan.

Designed to help you avoid expensive payday loans, these personal loans with no credit feature fixed interest rates and longer loan terms of up to two years. Loan amounts of $2,500-$3,000 are available, and making on-time payments will help you build your credit history.

Tip: Some credit unions require you to live in a certain geographic area to become a member, but others accept applicants from anywhere in Canada. Check the eligibility requirements before you apply.

Pros

  • Deal with a trusted financial institution
  • Lower-cost alternative to payday loans
  • Security of a fixed interest rate

Cons

  • Not widely available
  • Minimum income requirements apply

    4. Sign up for an unsecured credit card

    If you’re wondering where you can get a loan with no credit, an unsecured credit card might be the answer. These cards can be grouped into two main categories:

    • Student credit cards. If you’re studying and have little or no credit history, compare the best student credit cards. Many have special introductory offers and cashback rewards, but you’ll need to settle for a low credit limit.
    • Newcomer credit cards. All the major banks (and alternative financial institutions too) offer newcomer banking packages to entice new arrivals to Canada. If you sign up for a chequing account with the same provider, you can also apply for a credit card with no credit history. The bank might also waive the annual fee for the first year or offer a cash bonus to sweeten the deal.
    Tip: If you’re a newcomer to Canada, opening an everyday banking account with a bank will increase your chances of getting approved for a credit card from the same institution.

    Pros

    • Newcomers can take advantage of waived annual fees and cash bonus offers
    • Convenient access to funds when you need them
    • Easy way to build your credit history

    Cons

    • Low credit limits apply
    • Higher income and asset requirements if you want a higher credit limit
    • Watch out for annual fees and high interest rates

    Compare credit cards for students or newcomers

    1 - 4 of 4
    Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
    BMO CashBack Mastercard For Students
    5% cash back
    Up to 3% cash back
    20.99%
    $0
    Min. recommended credit score: 660
    Get up to 5% cash back in the first three months (up to max. spend of $2,500).
    BMO AIR MILES Mastercard For Students
    800 Miles
    Up to 3x Air Miles for every $25 spent
    20.99%
    $0
    Min. recommended credit score: 660
    Get 800 AIR MILES Bonus Miles (enough for $80 towards purchases with AIR MILES Cash).
    OFFER
    Tangerine Money-Back Credit Card
    10% cash back
    Up to 2% cash back
    19.95%
    $0
    Min. recommended credit score: 600
    Earn 10% cash back (up to $100) when you spend $1,000 in the first 2 months. Valid until January 31, 2024. Plus, get a 1.95% interest rate on balance transfers for the first 6 months.
    Scotiabank SCENE+ Visa Card
    5,000 points
    Up to 2 points per $1 spent
    19.99%
    $0
    Min. recommended credit score: 660
    Earn 5,000 Scene+ points when you spend $750 in the first 3 months. Apply by February 29, 2024.
    loading
    1 - 5 of 5
    Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
    RBC Cash Back Mastercard
    N/A
    Up to 2% cash back
    20.99%
    $0
    Min. recommended credit score: 650
    Scotiabank Value Visa Card
    0% on balance transfers for 6 months
    N/A
    12.99%
    $0 annual fee for the first year ($29 thereafter)
    Min. recommended credit score: 660
    Get a 0% introductory interest rate on balance transfers for the first 6 months. Plus, pay no annual fee in the first year. Apply by October 31, 2024.
    OFFER
    Tangerine Money-Back Credit Card
    10% cash back
    Up to 2% cash back
    19.95%
    $0
    Min. recommended credit score: 600
    Earn 10% cash back (up to $100) when you spend $1,000 in the first 2 months. Valid until January 31, 2024. Plus, get a 1.95% interest rate on balance transfers for the first 6 months.
    BMO CashBack Mastercard
    5% cash back
    Up to 3% cash back
    20.99%
    $0
    Min. recommended credit score: 660
    Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,500). Plus, get a rate of 0.99% on balance transfers for 9 months. A 2% fee applies to transferred balances.
    Scotia Momentum No-Fee Visa Card
    Up to 5% cash back
    1% cash back
    19.99%
    $0
    Min. recommended credit score: 660
    Earn 5% cash back on all purchases for the first 3 months (up to $2,000 spend). Plus, get a 0% introductory interest rate on balance transfers for the first 6 months with no balance transfer fee. Apply by October 31, 2024.
    loading

      5. Sign up for a cash-secured credit card

      A secured credit card requires you to put down a security deposit which then serves as your credit limit. You can then use your card to pay for purchases in-store and online, building your credit history and improving your credit score in the process. And if you miss any payments, the card provider has your deposit as collateral.

      Tip: If you’ve got no credit history, lenders will be much more likely to approve you for a secured credit card than an unsecured card.

      Pros

      • Convenient access to cash
      • Good for building credit
      • Some cards offer cash back and other rewards

      Cons

      • Upfront deposit required
      • Some cards have an annual fee
      • Usually no signup bonuses

      6. Get a car title loan

      Car title loans usually don’t involve credit checks, so your lack of credit history won’t be a problem. The loan is secured by the title of your car, allowing you to borrow up to 50% of your vehicle’s value. You’ll need a car in good to excellent condition to qualify for a loan, and you can even apply and get approved online.

      But be aware that car title loans are expensive. Not only can you expect high APRs, but vehicle evaluation fees, vehicle history search fees and other charges can drive up the total cost.

      Tip: Some online lenders don’t need to physically inspect your vehicle before approving your loan. Instead, you’ll need to upload photos of your vehicle from various angles as well as your car title.

      Pros

      • Fast turnaround time
      • Allows you to access a larger loan amount
      • All types of credit usually accepted

      Cons

      • You could lose your car if you can’t repay the loan
      • High APRs may apply
      • Make sure you’re aware of all fees that apply
      Dive deeper Car title loans

      7. Get a credit builder loan from an alternative lender

      A credit builder loan is designed to help you build your credit history while putting money aside at the same time. Once you’re approved for a loan, you start making regular payments that the lender reports to the credit bureaus. Once you’ve paid off the full loan amount, you can access those funds and your on-time payments will have helped improve your credit score.

      There are several online lenders that offer credit builder loans in Canada, so shop around to compare your options.

      Tip: You’ll need to provide proof of income and employment to qualify for a credit builder loan. The lender may request pay stubs, bank statements and a letter from your employer.

      Pros

      • Helps you build your credit history
      • You can grow your savings
      • Good practice at budgeting for loan repayments

      Cons

      • You don’t get the funds until the loan is paid off
      • High interest rates
      • Small loan amounts won’t suit all borrowers

      8. Get a credit builder loan from a credit union

      Some credit unions also offer credit builder loans for people with no credit history. The money you borrow is put into a term deposit, allowing you to grow your savings balance even further. The term deposit is used to secure the loan, which can help you access a better loan interest rate, and you can access it once it reaches maturity.

      Tip: You’ll need to be a credit union member to qualify for a credit builder loan, but don’t worry — becoming a member is easy. It typically only costs about $5 and you’ll need to provide your contact details, SIN and proof of ID.

      Pros

      • Build your credit history
      • Save money at the same time
      • You can earn interest on the money you put aside

      Cons

      • You don’t get the funds until the loan is paid off
      • Make sure you check what fees apply
      • High interest rates

      9. Get a crypto loan

      A crypto loan uses crypto assets as security for financing. Crypto lenders likely won’t be concerned with your lack of credit history as long as you can supply a crypto asset as security. However, the volatility of cryptocurrency and a lack of regulation makes these loans highly risky.

      Tip: How much you’ll be able to borrow will depend on the value of your crypto assets. You can typically borrow up to 50% of your assets.

      Pros

      • Flexible requirements
      • Competitive rates
      • Fast funding

      Cons

      • Lack of regulation
      • Lose your assets if you default
      • May be required to put up additional assets if the crypto value drops

      10. Get a payday loan from a licensed payday lender

      Another way to get a loan with no credit history is to take out a payday loan. These short-term loans of up to $1,500 offer fast access to funds for any purpose, and your lack of credit history won’t stop you getting approved.

      But there’s a reason we’ve included payday loans last on this list: they should only be considered as a last resort. With high fees and short loan terms, payday loans commonly have APRs of 300% or more. This makes it very difficult to budget for your loan repayment in such a short period of time, so consider all other options before opting for this type of loan.

      Tip: Some payday lenders may require one or two references, such as a friend, family member or colleague.

      Pros

      • Loans available 24/7
      • Get funded within an hour
      • Easy to apply

      Cons

      • Extremely expensive
      • Short repayment terms
      • Watch out for sketchy lenders and scammers

      Is it possible to get a loan with no credit?

      It’s possible to get a loan with no credit as long as you find the right lender. But before you start shopping for personal loans with no credit, make sure you set reasonable expectations.

      Getting a loan from traditional lenders can be challenging with no credit because these types of lenders tend to extend financing exclusively to individuals with good credit, steady income and low outstanding debts. Alternative lenders are willing to help, but you’ll need to accept higher interest rates.

      Where can I get a loan with no credit?

      You have several options to consider if you’re looking for a no credit loan:

      • Online lenders. These lenders offer a convenient online application process and many are willing to work with bad or no credit borrowers. Rather than relying on your credit score, they look at your income, employment and existing debt levels to work out whether you can afford a loan. Most report to the credit bureaus, which means you can start building credit. It’s also often possible to complete a pre-application that doesn’t impact your credit and gives you an idea of what your loan will look like.
      • Credit unions. Credit unions commit to reinvesting earnings to keep savings rates high and loan rates low. They’re often more likely to offer loan options for credit union members with no credit history. These lenders usually give competitive loan terms and interest rates as well as low fees.
      • Pay advance apps. If you’re looking for instant personal loans with no credit history in Canada, a pay advance app allows you to access a small, short-term loan. Loans are typically $200 or less and there’s zero interest, but watch out for any fees that apply.
      • Credit cards. It’s possible to qualify for a credit card if you have limited credit history, but the maximum credit limit you can access may be restricted. If you already have a card, a credit card cash advance is a convenient way to access funds in an emergency, but you’ll need to watch out for high interest rates and fees.
      • Payday lenders. Payday loans should be reserved for financial emergencies only. They often come with excruciatingly high APRs, and not all companies offering loans are legit. Most payday lenders also don’t report to credit agencies, so if you’re looking to take out a loan to build or repair your credit history, a payday loan isn’t the way to go. The only way that a payday loan shows up on your credit history is if you’re unable to pay it back — and that won’t be much help for getting credit in the future. Instead, consider an alternative to get over your financial hump.
      • Friends and family. If you’re having trouble obtaining financing from a lender and still need money, consider borrowing from friends or family. You can keep it informal if you have a close relationship with your relatives, or take the safe approach and get a legally binding contract drawn up. Just be warned that borrowing from loved ones can place a big strain on your relationship.
      • Crypto lenders. Use your crypto assets as collateral to get a loan. However, lenders will only accept certain types of cryptocurrency, such as Bitcoin and Ether.

      How to increase your chances of getting a loan with no credit history in Canada

      There are plenty of simple things you can do to boost your chances of loan approval, such as:

      • Get a cosigner. If you can find a relative or close friend with strong credit who is willing to cosign your loan, it’ll increase your chances of approval and also help you access a larger loan amount and better interest rate. But your cosigner will need to take on the responsibility of repaying the loan if you can’t, so it’s a big commitment.
      • Provide collateral. Providing collateral as security for your loan lowers the risk to the lender. Of course, it also means putting your assets at risk if you default on the loan.
      • Provide proof of a steady income. If you’re in steady employment, this reassures the lender that you’ll receive the regular income you need to afford your repayments. So if you’ve moved jobs recently, it might be worth waiting until you’ve been in your current role for at least 3-6 months before applying for a loan.
      • Have a low debt-to-income (DTI) ratio. Your DTI ratio reflects how much of your income goes toward paying off your existing debt. It’s a key factor lenders consider when assessing your loan application, and you’ll generally need a DTI ratio of under 40% to get approved.
      • Have assets and positive net worth. You can calculate your net worth by subtracting your total debts from any assets you own. If you get a positive number, this means you have a positive net worth — and that makes you a less risky borrowing prospect in the eyes of lenders, especially if you can convert your assets to cash if emergency expenses arise.
      • Decrease expenses. Lenders tend to consider how much you make and how much you spend. If you decrease your expenses, the lender will be more likely to extend credit because you’ll have more money available to make payments.
      • Ask for less money. The less money you ask for, the less risk you are to a lender. You can also consider financing from multiple sources. For example, you could finance using a hybrid of your own funds, borrowed money from friends or family and a personal loan.
      • Make payments on time and in full. Even though you don’t have a formal credit history, some lenders will consider other types of payment history. For example, phone bills, rent and utility bills. If you intend to present these to lenders, be sure your account is kept up to date by always paying on time and in full.

      How to build credit to get a loan

      If you don’t need a loan right away or have been unsuccessful in your attempts to obtain a loan, consider building your credit score. Here’s how:

      • Use a credit building product. Some credit unions and banks offer credit loans and accounts designed to help you build your credit. Secured credit cards act like a regular credit card, but require you to make a deposit which becomes the credit limit. A credit building loan lets you save money while building credit history at the same time. If you use one of these products, the golden rule is to always pay on time and in full. Payment history is the fastest way to build credit.
      • Become an authorized user. If you are an authorized user on someone else’s credit product, your credit score reflects the primary user’s financial position. You don’t need to actually use the credit product to reap this benefit. Consider asking a friend or family member with good credit to add you to a credit account. Be sure that the authorized user is someone you trust because their financial habits will reflect on your report too.
      • Develop good financial habits. Since you’re starting with a clean slate, you should establish good financial habits now. Financial habits have an indirect impact on your credit score, but you will see the benefits in the long run. Good financial habits include always paying bills on time and in full, having an emergency fund and never overborrowing.

      Bottom line

      If you’re a newcomer to Canada or you have limited financial history, getting a loan with no credit is easier than you might think. Compare the loan options above to find financing that’s right for you, but watch out for high interest rates. And if you’re still having trouble getting approved, taking time to build your credit and improve your personal finances will boost your chances of securing a loan.

      Frequently asked questions

      More guides on Finder

      Go to site