If you’ve got bad credit or not enough income, it’s often difficult to get approved for a line of credit from traditional lenders like banks and credit unions. The good news is that there are private lenders that offer lines of credit for bad credit in Canada. The bad news is that steep interest rates usually apply.
Keep reading to compare loan options and find out how to get easy approval on a line of credit.
How do I get a line of credit with bad credit?
To get approved for a line of credit, you can apply to alternative lenders. Many lenders operating online work with bad credit borrowers. You can apply through the lender directly or use an online loan search platform like Loans Canada or LoanConnect who can match you with a lender that suits your needs.
Rather than focusing on your bad credit score, these lenders will consider other factors when assessing your credit application, such as your income and existing debts.
Fora is a relatively new lender in Canada that launched in 2022. It offers an unsecured line of credit to suit borrowers who may not qualify with banks and credit unions. You can apply online without needing to email or upload documents, but Fora requires view-only access to your bank statements to give approval.
When you need to access funds from your line of credit, Fora can deposit them into your bank account as soon as the same business day.
Is this line of credit easy to get?
It’s easier to get than a line of credit from a financial institution. Fora can consider your income as long as it’s regularly paid into your bank account. This means you can qualify even if your income does not come from employment. This lender is also more lenient with credit scores.
To increase your chances of approval, you’ll need to show Fora you are receiving enough income and you have room in your finances for new line of credit payments.
Line of credit details
Loan amount: $1,000 – $10,000
Loan term: Open
APR: 19.90% - 46.90%
Eligibility requirements: Steady source of income, be a Canadian citizen or permanent resident, be a resident of and legal age of majority in one of Fora’s serviced provinces and have an active personal bank account
Serviced provinces: AB, BC, NB, NL, NS, ON and SK
Pros
Fast access to funds
No additional fees
Easy application process
Cons
High interest rate
You won’t be able to get this line of credit if you live outside of AB, BC, NB, NL, NS, ON and SK
Loans Canada is a loan search platform with the largest network of lenders in Canada. It has been in business since 2012 and is based in Toronto, Ontario.
Is this line of credit easy to get?
Loans Canada is worth considering if you want a thorough search of options that best suit your situation. It is not a direct lender but a platform that allows you to fill out one application to get matched with the appropriate lenders. This means you could be matched with lenders who offer lines of credit and/or those who offer other loan types, but you can be assured that your matches are open to giving you a loan based on your finances.
Line of credit details
Loan amount: $300 – $50,000
Loan term: Open
APR: 6.99% - 46.96%
Eligibility requirements: Canadian resident, age of majority in your province of residence
Serviced provinces: All of Canada
Pros
Network of over 60 lenders
Easy online application process
No fees for using Loans Canada’s service
Cons
Higher rates for bad credit
Quotes aren’t online — you’ll need to speak to a Loans Canada representative over the phone
Online loan search platform LoanConnect can help you find a line of credit through its network of lenders. Its has been around since 2016 and its office is based in London, Ontario.
Is this line of credit easy to get?
LoanConnect is a solid option if you want to expand your search using a loan search platform. You can apply online within minutes and get matched with suitable lenders, whether they are line of credit lenders or other types. LoanConnect works with borrowers of all credit scores, so you can apply and get results even with bad credit.
Line of credit details
Loan amount: $500 – $50,000
Loan term: Open
APR: 8.99% - 46.96%
Eligibility requirements: Canadian citizen or permanent resident, age of majority in your province of residence, current debts must total less than 60% of your income
Serviced provinces: All provinces
Pros
Convenient online service
Get money within 48 hours
Easy comparison process
Cons
Not a direct lender
Watch out for high rates for bad credit
You can only compare loan offers from lenders in LoanConnect’s network
Nyble launched in 2022 in the Canadian loans marketplace and its product is a bit different from the traditional line of credit. With a Nyble credit line, you’re approved to borrow up to a limit. However, you won’t be able to borrow more until you pay off what you previously borrowed.
Apply online for an interest-free line of credit of up to $150 to cover small expenses and build your credit. Get funds in 1-3 business days with a free account. For $11.99 per month, get access to premium services, including funding in 1-30 minutes, a free Equifax credit report and identity theft protection.
You can repay your loan on your next payday or roll it over to the following months.
Is this line of credit easy to get?
Nyble is one of the easiest lines of credit to get approved for because it offers much smaller loan amounts, doesn’t do any credit checks and is flexible with the type of income you earn. Nyble also provides instant approval and instant funding 24/7.
Line of credit details
Loan amount: $30 – $150
Loan term: 30 days, extendable
APR: No interest or fees to access credit line, optional $11.99/month membership to get premium services such as instant funding
Eligibility requirements: You must be 18 years or older, have an active bank account with minimal NSF transactions and satisfy income requirements.
Serviced provinces: All provinces and territories
Pros
Bad credit is okay (no credit check)
No need to be employed – many types of income are acceptable
Fast approval with no application fee
Cons
Will be costly if you keep rolling over your loan
Small loan amounts
Paid membership required for fast transfers and other premium perks
MogoMini is a line of credit offered by Vancouver-based fintech Mogo. You can apply online and get pre-approved in less than five minutes.
Is this line of credit easy to get?
This line of credit is easier to get than many other lines of credit in Canada because this product is intended to be a payday loan alternative for emergency funding. Mogo is open to financing borrowers with a credit score of at least 600. You can also apply if your income is more than $35,000/year.
This line of credit can be easy to get, but with such a high interest rate, make sure you pay off the amount you borrow as fast as possible.
Line of credit details
Loan amount: $1,000 – $3,500
Loan term: No end dates
APR: 47.42%
Eligibility requirements: Canadian resident, age of majority in your province of residence, annual net income of $35,000
Serviced provinces: BC, AB, SK, MB, ON, NB, NS, NF, PEI, NU, NT
Pros
Fast pre-approval
Designed for borrowers who struggle to qualify with traditional lenders
Mogo account holders also get a range of other perks
Cash Money doesn’t just provide payday loans – it also offers lines of credit. One of the most well-known alternative lenders, it has been operating for decades and has headquarters in Toronto, Ontario.
You can apply for a loan and verify your income online, while in-store and phone applications are also accepted.
Is this line of credit easy to get?
This line of credit is easier to get than lines of credit from banks and sometimes even other alternative lenders. Cash Money is open to non-employment incomes and lower credit scores. Its line of credit interest rate is high though at 46.93%. It’s important to be financially disciplined and to pay off your balance as soon as possible if you get this line of credit.
Line of credit details
Loan amount: $500 – $10,000
Loan term: Open
APR: 46.93%
Eligibility requirements: Steady source of income, active bank account, min. 600 credit score
Serviced provinces: AB, BC, MB, NB, NL, NS, ON & SK
Are there banks that provide easy approval on a line of credit?
It’s not easy to get a line of credit from a bank unless you have a strong financial profile. To increase your chances of getting approved for a bank line of credit, you’ll need to meet the following:
Have a sufficient income (full-time steady employment preferred)
Monthly debt payments are less than 40% of monthly income
Credit score over 660
Securing your line of credit with your home or investments will also help your application.
What is the easiest bank to get a line of credit?
Banks overall share the same eligibility requirements, so one bank isn’t necessarily easier than another. It boils down to your personal circumstances; everyone is unique and banks look at many factors that make up your financial situation.
If we compare types of lenders though, alternative lenders are easier than banks.
Should I get a line of credit if I have low credit score?
A line of credit is a good idea only if you are financially disciplined. A line of credit is a flexible loan that allows you to access funds as you need them, up to a limit. You can use a portion of your credit limit or the full amount — it’s up to you — and you can use the money for any purpose.
You’re charged interest only on the amount you borrow, not on the full credit limit. You’ll have minimum payments you must make every month, but the main benefit of a line of credit is that you can pay off the amount you borrowed whenever it’s best for you.
This is why a line of credit requires financial discipline. There is a risk of borrowing more than you need, and interest is calculated daily on the unpaid balance. If you have bad credit, consider the steep interest rate, which can have a big impact on the total cost of borrowing. Also, if you miss payments, you could damage your credit score further.
If you’re applying for a bad credit line of credit, keep an eye out for these features:
High interest rates. Interest rates on lines of credit for bad credit can be as high as 47.42%. With this in mind, it’s a good idea to make more than the minimum monthly payment to minimize the interest that accrues.
Fixed rates. Line of credit interest rates for bad credit are usually fixed, which means your rate will stay the same.
Lower credit amounts. Online lenders tend to offer smaller credit limits than the banks. And if your credit score is less than perfect, you can expect to qualify for a lower amount than someone with excellent credit.
Improve your credit. Making on-time payments on your line of credit can help you rebuild your credit score.
Secured vs unsecured lines of credit
Secured lines of credit. This type of line of credit is backed by collateral, usually your house, allowing you to access a higher credit limit and better interest rate. This product is not easy to get if you have bad credit though because traditional lenders offer these, not alternative lenders.
Unsecured lines of credit. With no collateral to secure the loan, unsecured lines of credit have higher interest rates. This is easier to get if you have bad credit than a secured line of credit because you can get one from an alternative lender. The average unsecured line of credit rate is 10.90%, but if you have bad credit, you’ll be charged much more than this.
Can I get a guaranteed line of credit with bad credit?
No. Be very wary of any lender that advertises “guaranteed” approval. This is a common red flag that could indicate a personal loan scam, so the safest thing to do is steer clear.
While there are plenty of legitimate online lenders, there are also plenty of fraudsters and scammers. Do your research to make sure a lender is properly registered and licensed in your province, and read customer reviews to find out whether they’re trustworthy.
Tips to get easy approval on a line of credit with bad credit in Canada
Even if your credit score is poor, there are several simple things you can do to increase your chances of getting approved by a legitimate lender:
Check your credit report. Find out what your credit score is to get a better idea of which lenders may be willing to work with you. You can also check whether there are any inaccuracies in your credit report that need to be fixed.
Pay down your debt. Your debt-to-income (DTI) ratio is a key factor lenders will consider when you apply for credit. By taking the time to pay down your existing debts, you’ll ensure that a smaller portion of your income goes towards paying back what you owe. Lenders typically want to see a DTI below 40%, but lenders of lines of credit for bad credit are open to higher DTIs.
Apply for a smaller amount. Lenders are more likely to approve you for smaller amounts than larger amounts.
Get a cosigner. Finding someone with strong credit who is willing to cosign your loan will also boost your chances of getting approved. However, that person will have to step in and cover the repayments if you fall behind.
How to apply
It’s easy to apply for an online personal line of credit for bad credit. Here’s what you need to do:
Compare your options. Compare lenders to find out about their eligibility requirements, line of credit amounts and interest rates. You can do your own research or go through a loan search platform to find the loan that’s right for you.
Submit your application. Fill out an online application form with your name, contact details and income and employment information.
Provide supporting documentation. You may need to provide proof of ID, such as your driver’s licence or passport, and bank account information to prove your income.
Get funded. It’ll typically take between one and three business days to get approved and funded. You can then withdraw from your available credit as needed to fund any expenses.
Yes. While you may not be able to qualify with a bank or credit union, some online lenders offer lines of credit for bad credit in Canada. However, high interest rates typically apply.
It depends on the lender, but generally, you need a credit score over 570, sometimes even 600.
Unless it's a non-traditional line of credit like Nyble, you can't get instant approval on a line of credit.
HELOCs are typically given to people with good to excellent credit. You'll need to apply for an unsecured line of credit if you have bad credit.
It depends on your situation. A line of credit can be a convenient way to cover unexpected expenses, but it requires discipline in spending and making payments. Also, if you have bad credit, be aware that high interest rates will apply when you access credit.
If you have bad credit, you can apply for a line of credit from an online lender that offers loans in Ontario. These lenders will look past your credit score and consider your employment, income and existing debts to determine your ability to pay back what you borrow. However, watch out for steep interest rates.
It'll be difficult to get a student line of credit with bad credit. This is because a student may not have sufficient income, and combined with a low credit score, there is a high risk that banks will not receive their money back if they lend to a student.
Lines of credit for bad credit typically have limits up to $10,000.
It can be hard to get a line of credit because it provides you with easy access to money. Because of this, lenders will want to make sure you're the type of person who pays back their loans on time.
Tim Falk is a freelance writer for Finder. Over the course of his 15-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
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