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Personal loan eligibility

Here are the 5 main factors lenders consider when reviewing your loan application, plus 8 other factors.

5 main eligibility factors Learn more
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You may be wondering, “Am I eligible for a loan?” Whether it’s secured or unsecured, fixed rate or variable, for $3,000 or $50,000 — you’ll likely need to meet some general personal loan eligibility criteria to qualify. We discuss the general requirements set by most lenders. While every lender is different and there’s no guarantee you’ll be approved, making your application as flawless as possible is a good start to finding a loan that works for you — and one you may be approved for.

The 5 main factors lenders consider

Every applicant is different, but many lenders want to make sure these areas are strong when determining your personal loan eligibility.

1. Income

Nearly every lender will require that you earn a steady income. This is to ensure you have the ability to make the minimum monthly repayments set by your loan contract. While some will allow any income amount, larger loans may require that you make a certain minimum amount before you can apply.

2. Employment

Here are 5 job-related factors lenders consider when evaluating a loan application. While not all lenders look at every single one of these factors, many consider at least one of them, especially income.

3. Credit history

A good or excellent credit score with a solid history — one that has no major dings for missed payments or loan default — is the easiest way for lenders to know that you’re a trustworthy applicant, especially if you’re applying at a bank. If your credit score is fair or poor, there are still loan options for you to consider, however there will be less options available than someone who has good or excellent credit.

4. Loan security

There is a major difference between secured and unsecured loans. When you apply for a secured loan, like an auto title loan or a mortgage, you’re providing collateral in the event that you default. When you apply for an unsecured loan, one that has no collateral attached, your credit score becomes the main deciding factor.

5. Assets, debts and expenses

You’ll be asked to list your assets, debts and expenses on your application. Lenders use your debt and income to calculate your debt-to-income ratio (DTI). A higher income may boost your application whereas debts, such as credit cards, lines of credit or other loans, can hinder your application. Expenses are always estimated, but lenders generally have a good idea when you’re under or overestimating based on the data of other customers.

Compare personal loans

Think you’ll qualify? Compare lenders below to find a personal loan that’s right for you. Make sure you check and meet the lender’s eligibility criteria before applying.

Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
LoanConnect Personal Loan
Secured from 1.90%, Unsecured from 5.75%-46.96%
$500 - $50,000
3 - 120 months
Currents debts must total less than 60% of income
Min. credit score: 300
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An online broker who helps inform clients towards better finances. Get pre-approved by different lenders for unsecured or secured loans in 5 minutes with any credit score.
goPeer Personal Loan
8.00% - 31.00%
$1,000 - $25,000
36 - 60 months
Recommended income of $40,000 /year
Min. credit score: 600
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Canada's first regulated consumer peer-to-peer lending platform offering unsecured loans. Connects creditworthy Canadians looking for a loan with Canadians looking to invest. goPeer strives to offer the most competitive interest rates. Apply in minutes and get a response within 24 hours.
Spring Financial Personal Loan
17.99% - 46.96%
$500 - $15,000
9 - 48 months
Min. income of $1,800 /month, 3+ months employed
Min. credit score: 400
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An online lender offering unsecured personal loans and credit builder loans. Those filing for bankruptcy or a consumer proposal can also apply. If you're not eligible for an unsecured loan, you may be offered a loan to help rebuild your credit.
ConsumerCapital Personal Loan
19.99% - 34.99%
$1,500 - $12,500
24 - 60 months
Min. income of $1,900 /month, 6+ months employed
Min. credit score: 600
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An online lender that provides fast unsecured personal loans. Complete an application in less than 10 minutes and get a decision within 24 hours. For faster loan approval, complete the Flinks bank integration in the app.
SkyCap Financial Personal Loan
12.99% - 39.99%
$500 - $10,000
9 - 36 months
Min. income of $1,200 /month, stable employment
Min. credit score: 550
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An online lender offering unsecured personal loans to borrowers with a wide range of credit scores. Apply in less than 5 minutes and if approved, receive financing in as little as 24 hours.
FlexMoney Personal Loan
18.90% - 46.93%
$500 - $15,000
6 - 60 months
Min. income of $2,000 /month, 3+ months employed
Min. credit score: 500
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An online lender offering flexible unsecured loans. Apply in less than 10 minutes and if approved, receive financing in as little as 24 hours. Pay off your loan at any time.
Loans Canada Personal Loan
Secured from 2.00%, Unsecured from 8.00% to 46.96%
$300 - $50,000
3 - 60 months
No min. income or employment requirements
Min. credit score: 300
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An online broker with the largest lender network in Canada. Get matched for free with lenders offering both unsecured and secured loans through one quick application regardless of your financial situation.
Mogo Personal Loan
9.90% - 46.96%
$200 - $35,000
6 - 60 months
Min. income of $13,000 /year
Min. credit score: 500

Mogo offers a 100-day money-back guarantee. If you're not happy with your loan, pay back the principal and get your 100 days of paid interest and fees back.
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An online lender who aims for a hassle-free process through same-day unsecured loan approval and funding. Get a loan fast and track your credit score for free.
Fairstone Personal Loan (Unsecured)
26.99% - 39.99%
$500 - $25,000
6 - 60 months
Able to make monthly repayments on your loan
Min. credit score: 560
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An online lender with a team dedicated to professional service. Get a quote for an unsecured loan without impacting your credit score. Receive funds within as little as 24 hours. No prepayment fees.
Fairstone Personal Loan (Secured)
19.99% - 23.99%
$5,000 - $50,000
60 - 120 months
Must be a homeowner
Min. credit score: 560
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Use your home equity to get a secured loan up to $50,000 with flexible repayment options and a long loan term. Get a quote without impacting your credit score.
Loan Away Personal Loan
19.90% - 45.90%
$1,000 - $5,000
6 - 36 months
No min. income or employment requirements
Min. credit score: 300
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A lender that approves unsecured loans in as little as 20 minutes. Get affordable monthly repayments with any credit score.

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8 other factors that help your personal loan eligibility

While your lender might not advertise it, there’s a chance they’re considering at least a few of the following factors when you apply for a personal loan.

1. If you rent or own your home

Miniature home, calculator, keys and budget documents on a tableSure, you might spend the same on your mortgage as you would to rent, but some lenders consider whether you rent or own your home when you apply for a personal loan.

Why do they care? It might have something to do with your debt-to-income ratio (DTI). Your DTI is how much you owe each month on credit cards, car payments and other types of debt divided by how much you earn each month. Lenders like Refresh Financial use your DTI to tell how much extra cash you have to make loan payments.

It sounds straightforward enough, until you consider what actually counts as debt. Traditionally, lenders count mortgage payments, not rent, as debt when crunching a borrower’s DTI. This means that renters might be able to get a more favorable deal on a loan even if they pay the same amount toward housing each month. To get a more accurate picture of how much money you have to spend each month, it’s possible that some lenders will ask you if you rent or own on your application.

2. How often you change phone numbers

You probably won’t be asked how often you change your phone number on an application, but it still might be part of your lender’s underwriting secret sauce. If a lender notices that you’ve applied for loans or credit cards using different phone numbers over the past few years, it could be a sign that you’re not settled down enough to responsibly borrow money.

Changing your number once in a while probably won’t cause your application to be rejected. But multiple changes could raise a flag to lenders. And if that’s one of a few red flags, you might see less favorable rates and terms — or even be rejected.

3. Your level of education

When it comes to millennials and Gen Zers, credit score and income doesn’t tell a lender much about their ability to pay off loans. Especially if they’ve been slaving away at med school or for an MBA — they likely haven’t built credit or reached their earning potential. LendingMate, for instance doesn’t consider credit score at all when evaluating loan applications.

In an effort to open up personal loans to younger borrowers and get a more accurate idea of how much a borrower might make in the future, some lenders ask about your level of education. So don’t be surprised if you get questions about your highest degree, where and when you went to school or even your major.

4. How often you move

Lenders may notice how often you change your address when they review your tax returns or credit history. Like changing your phone number too many times, lenders see frequent changes of address as a sign that you aren’t financially stable enough to pay back a loan.

Staying in one place also shows a history of paying your mortgage or rent on time. If you move a lot for work, this might not count against you if that’s clear on your application. But otherwise, multiple address changes could hurt your chances of getting a good rate on a loan.

5. Your spending habits

Young couple talking about their savingsIt’s standard for lenders to ask for bank account information when you apply for a loan — it’s faster and easier to send money directly to your account than mailing or picking it up in person.

But some may also require bank statements to verify that you’re making what you say you’re making. Lenders may also request these documents so they can review your spending habits and determine whether you’re responsible with your money. If your bank account makes you look like an impulsive shopaholic, they might be less likely to trust you with a loan at a favorable rate.

6. Your nest egg

Your income is important, but your saving habits could also affect your loan application. Lenders may consider your savings, retirement accounts and investments when you take out a loan. Looking at your savings tells a lender 2 things: that you have a strong handle on your personal finances and you can probably afford to cover an emergency expense and keep up with your loan repayments.

7. Your work-related licences

Like education, some lenders ask borrowers if they have any professional licences or certificates. There are a couple reasons for this. A licence or certificate puts you in a higher pay grade and makes you eligible for more jobs. It’s also a sign of stability — that you’ve committed to a career.

While not having a licence or certificate might not hurt, especially if there aren’t any in your line of work, having one can boost your application.

8. If you’ve tied the knot

While not too common, some lenders may want to know if you’re married or single when you apply for a loan. Primarily, your marital status tells lenders if your salary is the only one to consider when you apply for a loan. However, this information is sometimes obtained by asking for your household income instead.

Quick tips to increase your personal loan eligibility

If you’re unsure about your eligibility, consider these tips to help give your personal loan application a boost:

  • Open a chequing account with the lender you’re applying with. If you’re applying with a bank or a credit union and don’t need a loan right away, establishing a banking history with the lender can help you get financing in the future.
  • Lower your debt-to-income ratio. Lenders generally want to see a DTI of less than 40%. You can lower yours by bringing in more money each month and paying down your outstanding balances.
  • Have a steady source of income. Lenders may not want to take the chance of giving you a loan if you’ve been employed for less than three months or if you don’t make the same amount each month. No matter how secure you think your job is, lenders may not see your short employment history that way.

7 reasons you got denied and 7 ways to increase your chances of approval

Bottom line

Remember that no personal loan is ever guaranteed, so use the guide above to ensure you’re giving yourself the best chance of approval by submitting a strong application that meets the criteria for a loan.

Before applying for a loan, be sure to compare your loan options to find the right lender that fits your needs.

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