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Personal loan interest rate ranges

When it comes to a personal loan, what are interest rate ranges and how is your rate calculated?

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If you’re shopping around for a personal loan, you may have noticed that some lenders advertise their loans with interest rate ranges rather than a set interest rate. This means that if you apply and get approved for a personal loan, you’ll receive an interest rate somewhere within that range.

So, why do lenders use interest rate ranges and how can you qualify for the lowest possible rate? Let’s take a closer look.

Compare personal loan rate ranges

Name Product Interest Rate Loan Amount Loan Term Fees Credit Score Link
LoanConnect Personal Loan
Secured from 1.90%, Unsecured from 9.90%-46.96%
$500 - $50,000
3 - 120 months
No application or origination fees
Min. credit score: 300
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An online broker who helps educate clients towards better finances. Get pre-approved by different lenders for unsecured or secured loans in 5 minutes with any credit score.
Spring Financial Personal Loan
17.99% - 46.96%
$500 - $15,000
9 - 48 months
None
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.
Loans Canada Personal Loan
Secured from 2.00%, Unsecured from 8.00% to 46.96%
$300 - $50,000
3 - 60 months
No application or origination fees
Min. credit score: 300
Go to site
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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.
SkyCap Financial Personal Loan
12.99% - 39.99%
$500 - $10,000
9 - 36 months
None
Min. credit score: 550
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More Info
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.
Mogo Personal Loan
5.90% - 46.96%
$200 - $35,000
6 - 60 months
NSF fee - $20 - $50
Min. credit score: 540
Go to site
More Info
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.
Loan Away Personal Loan
19.90% - 45.90%
$1,000 - $5,000
6 - 36 months
None
Min. credit score: 300
Go to site
More Info
A lender that approves unsecured loans in as little as 20 minutes. Get affordable monthly repayments with any credit score.
Fairstone Personal Loan (Unsecured)
26.99% - 39.99%
$500 - $20,000
6 - 60 months
None
Min. credit score: 560
Go to site
More Info
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
36 - 120 months
Varies by province
Min. credit score: 560
Go to site
More Info
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.
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What are interest rate ranges?

A personal loan interest rate range lays out the minimum and maximum interest rates offered by a specific lender. This means you’ll get an interest rate somewhere within the range when you take out a personal loan.

For example, if a lender advertises a personal loan interest rate range of 7.5% – 20.15%, and you apply and are approved for a loan, the interest rate that applies to your loan could be anywhere within the range quoted.

So, how do you know what rate you’ll get? The rate you’re offered will be determined by a number of factors including:

  • Your credit score
  • Your overall financial situation
  • The loan repayment terms
  • Your income and ability to make repayments

Does every lender have an interest rate range?

No. While some lenders use interest rate ranges, others have a set rate for all borrowers. If a loan is promoted with a set rate, everyone who applies and is approved for that loan will get the rate quoted.

Just like loans with interest rate ranges, personal loans with set rates are clearly advertised as such. This allows you to accurately compare loans with the same type of interest rate structure.

Why do lenders set interest rate ranges for their loans?

There are a number of reasons why some lenders prefer to offer interest rate ranges instead of set rates. These include:

  • They can tailor the loan to suit the borrower. Interest rate ranges give lenders the flexibility they need to tailor their personal loans to meet the unique financial needs and repayment terms of a wide variety of borrowers.
  • They can approve a wider range of borrowers. By offering a set rate, lenders limit the number of borrowers that will meet the necessary lending criteria, as well as limit those who are able to afford the loan repayments. Introducing an interest rate range can make their loan more accessible to a wider range of borrowers with varying financial circumstances and credit scores.
  • They can set the interest rate depending on the level of risk. Different borrowers come with different levels of risk for lenders. For example, a high-income earner with a perfect credit history is a much less risky lending prospect than someone on a lower income with a poor credit score. Interest rate ranges allow lenders to set a rate that reflects the risk profile of each unique individual.

How is the interest rate determined?

The difference between the minimum and maximum figures in an interest rate range can be quite large, so how does the lender determine the exact rate that will apply to you? Well, there are a number of factors that affect how your rate is calculated – and the process will vary depending on the lender you choose.

Some lenders determine your rate based on your credit report only, while others calculate rates by taking an in-depth look at your risk profile. This means a lender may consider the following factors when deciding which rate in their range will be right for you:

  • Your credit score. Your credit score is a figure that represents your credit worthiness, and lenders use it to decide whether or not they should offer you a loan. The higher your credit score, the more likely you will be to make on-time payments – which can not only help you get approved for a loan, but also help you qualify for a lower rate.
  • Your credit history. Your credit score is based on an analysis of the information in your credit file. Many lenders will also consider the actual listings on your credit file when determining your personal loan interest rate. Black marks in your file, such as missed or late payments, could cause the lender to offer you a higher rate.
  • Your financial situation. When you apply for a personal loan, you’ll need to provide details of your current financial situation. This usually includes details of your income, employment, assets and liabilities. The lender will use this information to determine your ability to repay the money you borrow, and therefore work out your interest rate.
  • The loan repayment terms. The lender will also look at the specifics of your loan, such as the loan term and the frequency of your repayments, when deciding what your interest rate will be.

How do I know what rate I will receive?

If you apply for a personal loan advertised with an interest rate range, you won’t know for certain what rate you will receive. This can be frustrating for borrowers who prefer the peace of mind that comes with certainty, but there are a few simple steps you can take to get a rough idea of the rate you’ll be given.

  • Check your credit score. Checking your credit score is a great place to start, as a good credit score will help you receive a lower rate. By taking steps to improve your score, such as paying down credit cards or fixing errors on your credit file, you could soon be able to access a lower interest rate.
  • Consider your financial history. If you’ve always paid balances on time and in full and you’ve got a positive credit history, you can rest assured that you’ll be in a good position to get an interest rate on the lower end of the range.
  • Read the fine print. Read the information listed on a lenders website to get a better idea of how each lender calculates their rates. Once you know the process involved and the factors that are considered when deciding on a rate, you’ll be able to formulate a clearer picture of the rate you may receive.

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