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Personal loan interest rates
Find out how much you might pay for personal loan interest rates in Canada.
Latest personal loan interest rates from multiple lenders
|Loan provider||Interest rates||Lender type||Minimum credit score|
|Big bank||Not specified, but banks usually require above 660||Read review|
|Medium-sized bank||Not specified, but banks usually require above 660||Read review|
|Fixed rate, secured and unsecured: 1.9%–46.96%||Online broker||300||Go to siteRead review|
|Fixed rate, secured and unsecured: 2%–46.96%||Online broker||300||Go to siteRead review|
|Fixed rate, unsecured: 8.00% - 33.92%||Online P2P lending platform||600||Go to siteRead review|
|Fixed rate, unsecured: 17.99% - 46.96%||Online private lender||400||Go to siteRead review|
|Fixed rate, unsecured: 19.99% - 34.99%||Online private lender||600||Go to siteRead review|
|Fixed rate, unsecured: 12.99% - 39.99%||Online private lender||550||Go to siteRead review|
|Fixed rate, unsecured: 18.90% - 46.93%||Online private lender||500||Read review|
|Fixed rate, unsecured: 9.90% - 46.96%||Online private lender||500||Go to siteRead review|
(Steinbach Credit Union)
|Fixed rate, secured and unsecured: Starts at 3.45%||Credit union||Not specified, but credit unions usually require above 660||Learn more about credit union personal loans|
|Credit union||Not specified, but credit unions usually require above 660||Learn more about credit union personal loans|
Details last verified in October 2021
What is the average personal loan interest rate in Canada?
According to the Bank of Canada, the average personal loan rates from January to September 2021 were between 4.37% and 6.44%. This combines fixed and variable rates and does not differentiate between loans with collateral (secured) and loans without (unsecured).
As of September 2021, which is the most current information available, the average interest rate is 6.44%. You may end up paying more than that once your personal variables are factored in.
What factors affect my personal loan rates?
Personal loan interest rates in Canada typically range from 3.5% to 47%. The rate you get will depend on the following factors:
- Credit score. You need near-perfect credit to qualify for the lowest advertised rate.
- Income. Lenders will usually check if you have enough regular cash flow to easily afford your monthly repayments.
- Debts. The lowest rates go to borrowers with a debt-to-income ratio (DTI) below 20%.
- Collateral. Securing your loan makes it less risky to the lender and gets you lower rates.
- Loan amount and term. Some lenders may offer different rates depending on how much you want to borrow and how long you need to repay.
- Type of lender. The type of lender you choose will usually affect your personal loan interest rates in Canada (with credit unions and private lenders offering the lowest rates).
- Type of interest rate. Credit unions and banks offer variable and fixed rates. Generally, variable rates have lower starting rates. Online lenders offer fixed rates.
Which lender has the best personal loan interest rates in Canada?
You’ll usually get the best personal loan interest rates with credit unions, peer-to-peer lenders and private lenders. Your personal loan rates may be higher if you choose to go with big banks.
|Type of lender||Interest rates|
|Big banks||Anywhere from 6% to 15% with good credit, but you may have difficulty getting approved with bad credit.|
|Credit unions||Starting from 3.5% with excellent credit. If you have a low credit score, you may be able to get a personal loan from a credit union if you have a good history with them.|
|Private lenders||Varies depending on the lender. Some private lenders offer reasonable rates starting below 10% for good credit while others charge much more. It’s easier to qualify with bad credit if you’re willing to pay higher rates.|
|Peer-to-peer lenders||Personal loan interest rates for P2Ps start from 8% and up, depending on your credit score. With this method, you borrow from other Canadians through a platform rather than a financial institution. Some P2P platforms require a minimum credit score of 600 to apply.|
Bad credit vs good credit: How does it impact my score?
Your credit score has a direct influence on your personal loan interest rates in Canada.
- Higher scores. Scores of 660 or more will usually get you lower personal loan rates.
- Lower scores. Scores below 660 usually mean higher personal loan rates.
Sample interest rates by credit score:
Consult the table below to get an idea of how your rates might fluctuate with your credit score. Keep in mind that these rates are for illustrative purposes only.
|Credit score||Sample interest rate|
|300 – 559 (poor)||20% to 47%|
|560 – 659 (fair)||15% to 35%|
|660-724 (good)||5% to 20%|
|725-759 (very good)||5% to 15%|
|760-900 (excellent)||3.5% to 15%|
How does my loan term affect my personal loan rates?
Your loan term can also influence how much interest you pay over time.
- Longer terms. You’ll typically pay more interest for longer term loans since you’re paying an annual interest rate over a larger number of years.
- Shorter terms. You’ll pay a lower amount of interest over the duration of your loan with shorter terms (though your actual interest rate may be higher).
Representative example: Jimmy compares a short and long term loan
Jimmy has a credit score of 710 and wants to borrow $10,000 to refinish his basement. He compares the personal loan interest rates for 2 loans with different terms and interest rates to determine which one is a better fit.
|Feature||Loan 1||Loan 2|
|Term||3 years||5 years|
|Interest rates||8.2% ($1,314 over 3 years)||7.3% ($1,966 over 5 years)|
|Fees||2% origination fee ($200)||2% origination fee ($200)|
|Total amount borrowed||$11,514||$12,166|
While the longer term loan has a lower interest rate upfront, Jimmy chooses the shorter term loan (which has a higher upfront rate) since it will cost him less in interest over time.
Calculate your personal loan monthly paymentCalculate how much you could expect to pay each month
|Loan terms (in years)|
Secured vs unsecured personal loan interest rates
Your personal loan interest rates may also fluctuate based on whether you take out a secured or unsecured loan:
- Secured loan. Secured loans let you use valuable assets such as your home or vehicle as collateral to secure lower interest rates. These loans don’t rely on your credit score so you may be able to qualify even if you have bad credit.
- Unsecured loan. Unsecured loans rely on your credit score to determine your eligibility to borrow money. They often come with higher interest rates than secured loans, especially if your credit score is below 660.
Fees to consider on top of interest rates
You may need to pay additional fees on top of personal loan interest rates with some lenders. Look for the following fees when applying for a loan:
- Origination fee. Some lenders charge an origination fee of around 1% to 5% of your initial loan amount. It is usually deducted from your loan amount or added to your balance.
- Late fee. Many lenders charge a late fee of around $15 to $40 or 5% of the payment due for late fees.
- Non-sufficient funds fee (NSF). You’ll pay this fee if a payment bounces. Typically, it’s the same as a late fee, though may be slightly higher.
- Prepayment fee. You may need to pay a fee to repay your loan early with some lenders. This fee will vary depending on how much of your loan is outstanding and which lender you go with.
Personal loan interest rates vs APR: What’s the difference
The key difference between personal loan rates and APR boils down to the fees you get charged.
- Personal loan interest rates. Your personal loan rates represent the amount you pay each year to borrow money, expressed as a percentage rate. This amount doesn’t include any origination or brokerage fees you may need to pay for your loan.
- Annual percentage rate (or APR). Your APR is your interest rate plus the cost of fees or other charges you need to pay to take out a loan. APR is often used to show the true cost of your loan and will typically be higher than your interest rates alone.
Compare personal loan interest rates in Canada
Personal loan interest rates vary widely based on factors such as your credit score, lender, term length and personal financial situation. Find out more about what rates you can expect to pay in certain circumstances and compare lenders to find the best loan for your personal situation.
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