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Personal loan scams: Who are legitimate loan companies?

Here's a breakdown of legit loan companies in Canada, plus 10 warning signs of personal loan scams.

Personal loan scams are more common than you might think. The Canadian Anti-Fraud Centre reports that Canadians lost $380 million to fraud in 2021 and $75.5 million in just the first 2 months of 2022. That’s why it’s important to shop around for legitimate loan companies in Canada and know how to spot personal loan scams before they happen to you.

Legitimate loan companies in Canada

Browse the table below to find samples of legitimate loan companies in Canada.

Loan providerKey featuresHow they are legit
Picture not described
  • Loan amount: $300 – $50,000
  • Loan term: 3 - 60 months
  • Rates: Secured from 5.40%, Unsecured 8.00% - 46.96%
Loans Canada only works with financial service providers that adhere to Canadian laws and regulations.Go to siteRead review
Spring Financial logo
  • Loan amount: $500 – $15,000
  • Loan term: 9 - 48 months
  • Rates: 17.99% - 46.96%
Spring Financial has given loans to hundreds of thousands of Canadians since its inception in 2014. It has a 4.8/5 rating on Trustpilot.Go to siteRead review
SkyCap logo
  • Loan amount: $500 – $10,000
  • Loan term: 9 - 60 months
  • Rates: 12.99% - 39.99%
SkyCap Financial is a registered corporation and is accredited by the Better Business Bureau with an A+ rating.Go to siteRead review
Loanz
  • Loan amount: $1,000 – $15,000
  • Loan term: 12 - 60 months
  • Rates: 29.90% - 46.90%
Loanz’ parent company is Consumer Genius Inc. In 2021 Consumer Genius was named Canada’s 17th fastest growing company by the Globe and Mail’s Report on Business.Go to siteRead review
Mogo logo
  • Loan amount: $200 – $35,000
  • Loan term: 6 - 60 months
  • Rates: 9.90% - 46.96%
Mogo offers a range of financial products with many positive reviews, though it has some negative reviews for its personal loans. The company has been featured in The Globe and Mail, BNN and CBC.Go to siteRead review
LoanConnect logo
  • Loan amount: $100 – $50,000
  • Loan term: 3 - 120 months
  • Rates: Secured from 10.00%, Unsecured 5.99% - 46.96%
LoanConnect vets all of the loan providers it works with to make sure your money is safe. It also has a dedicated customer support and large customer base.Go to site
Picture not described
  • Loan amount: $500 – $15,000
  • Loan term: 6 - 60 months
  • Rates: 18.90% - 46.93%
FlexMoney is a 100% online lender with a dedicated customer service team. It uses tools like bank level encryption to protect your information.Read review
Symple Loans Logo
  • Loan amount: $5,000 – $50,000
  • Loan term: 1 - 7 years
  • Rates: 6.99% - 32%
Symple is very upfront about its loan rates and fees, and is a verified lender with the Canadian Lenders Association.Read review

You can find other legitimate loan companies in Canada by searching for companies on Google or by using a personal loan broker to connect to legitimate lenders near you.

10 signs of personal loan scam

Make sure you work with legitimate loan companies in Canada by learning how to spot personal loan scams. Avoid the following when deciding on a lender:

1.The lender requires you to pay for fees upfront.

Lenders that ask you to pay processing, insurance or origination fees as a condition of loan approval are operating a scam. Legitimate loan companies in Canada won’t ask you to pay any additional fees until your application is processed and you have received your loan.

2. The lender isn’t registered in your province or territory.

Provinces and territories require legitimate loan companies in Canada to register their financial businesses. If the lender you want to use isn’t licensed to operate in your province or territory — even if it’s licensed in other provinces or territories — then you should choose another lender to avoid potential personal loan scams.

3. Your loan offer is incomplete.

Loan companies in Canada are required to provide a loan contract that outlines the terms of your loan and the total cost you’ll pay with interest. If your offer is missing important information, contains spelling or grammatical errors or otherwise raises red flags, it could be a personal loan scam.

4. You can’t find a physical address.

If you can’t find a physical address or contact information on the lender’s website, it may be a personal loan scam. If there is contact information on the website, you may want to search for the address or call customer service to ensure that the info provided actually belongs to a legitimate loan company in Canada.

5. Your offer expires soon — and you must act now.

Most offers that are categorized as “urgent” can be written off as personal loan scams. Legitimate loan companies in Canada offer steady rates that depend on your credit score and finances. High-pressure sales tactics are designed to drive you to act quickly, often before you’re able to spot other red flags.

6. No credit check required.

Most legitimate loan companies in Canada will perform a credit check to make sure that you can reliably handle your loan repayments. Be wary of lenders that offer no credit check loans unless they have other means of verifying your ability to repay. For example, some lenders will require you to provide proof of income instead of a credit report.

7. You’re offered guaranteed approval.

Many personal loan scams involve the offer of a “guaranteed” loan with no background check. Legitimate loan companies in Canada won’t offer you a loan without first verifying your identity and assessing your creditworthiness. This helps them follow up with you if you default on your loan payments.

8. Unsolicited contact.

Loan scams can come in many forms – including social media requests, emails and even flyers to your mailbox. If you’re interested in a loan offer, make sure to do your own digging online to double-check that the company offering the deal is legitimate. If you can’t find the lender’s website, social media profiles or online reviews, it’s likely a scam.

9. No examples of fees, interest or costs

If a lender doesn’t list its interest rates or fees online – or provide them over the phone when you call — you could be dealing with a scam. Most legitimate loan companies in Canada will provide you with a quote for prices at the very least. Avoid working with lenders that aren’t transparent about how much your loan will cost.

10. Asks for payment in the form of a gift card.

Paying a lender with a gift card is the same as paying with cash — once the money has been used, it’s nearly impossible to trace or get back. Legitimate loan companies in Canada won’t ask you to pay with a gift card. If your lender is pressuring you to do so, you should find a new lender.

What to do if you're the victim of a scam

Personal loan scams are often very sophisticated and can happen to anyone. If you suspect that you’re the victim of a loan scam:

  • Call your local police. File a police report for the amount you’ve been defrauded.
  • File a complaint with the CAFC. Contact the Canadian Anti-Fraud Centre (CAFC) to lodge a complaint about a specific provider. Call toll-free at 1-888-495-8501 or file a complaint online at the Fraud Reporting System (FRS).
  • Call Crime Stoppers. Contact Canadian Crime Stoppers at 1-800-222-8477. You can also submit a tip about personal loan scams online using the Webtip service.

How to find legitimate loan companies in Canada

Before signing a loan contract, consider these tips to be sure you’re dealing with a legitimate lender.

  • Easy to contact. You should be able to easily access the lender’s phone numbers, email addresses, in-person building locations and business licensing information online.
  • Secure website. Most lenders encrypt the information you send online with 128-bit or 256-bit SSL. Look for a little padlock to the left of your address bar to confirm the site is safe.
  • Lender asks for a credit check. You should expect legitimate loan companies in Canada to check your credit. This can be through a soft pull on your credit to verify your ID or a hard pull that verifies your credit score.
  • Solid customer reviews. Double-check customer reviews online to see if the lender you want to work with is trustworthy. Just be mindful of reviews that are all positive or all negative. You should also be wary if a lender has very few reviews as it may be difficult to assess its legitimacy.
  • No upfront fees. Legitimate loan companies in Canada won’t charge you any fees until you receive your loan — though some might deduct an origination fee from the funds before it shows up in your bank account. This should be clearly outlined in your loan agreement if it does occur.
  • Clear loan terms. The terms of your loan should be clearly outlined in your loan contract. Double-check that all of the information provided to you verbally is included in writing as well. If anything is missing from your loan contract, avoid signing it until it reflects all of your loan information.

What information should be included in a legitimate loan contract?

Legitimate loan companies in Canada should include the following information on your loan contract:

  • Loan amount
  • Interest rates
  • Monthly repayment amount
  • Repayment method
  • Applicable fees
  • Legal obligations
  • Consequences of defaulting
  • Date and signatures

Common types of personal loan scams to avoid

Here’s how to protect yourself from two common scams you might encounter when applying for a personal loan: phishing scams and advance-fee scams.

Phishing scams

Phishing loan scams are used to collect your personal information to access your bank account or steal your identity.

Phishing scams usually:
  • Collect information through unsolicited phone contact
  • Install malware using unsolicited emails with embedded links
  • Request information via text messages
  • Promote their websites through sponsored ads on Google
How to avoid this type of scam
  • Avoid giving out your personal information over the phone
  • Never give out your banking information or passwords
  • Don’t click on unsolicited email links (even from companies you know)
  • Confirm that you’re on an encrypted page by looking for a padlock to the left of the page URL (on a site that starts with https://)
  • Protect your accounts by using multi-factor authentication

Advance-fee loan scams

Advance-fee scams demand that you pay an upfront fee before your loan application is assessed or before you can access the funds you’ve been approved for.

Advance-fee scams often:
  • Contact borrowers through unsolicited calls or online advertisements
  • Target bad credit borrowers who can’t qualify for traditional loans
  • Request advance fees such as processing, insurance or guaranteed approval fees
  • Request payment in the form of wire transfers, prepaid debit cards or gift cards (these methods are untraceable)
How to avoid this type of scam
  • Understand that it’s illegal for legitimate loan companies in Canada to ask for advance fees
  • Never hand money over to a loan company before your loan is in your bank account
  • Look at customer reviews and third-party ratings to make sure that a company is legitimate before you apply
  • Check to see that the lender is registered in your province

Four quick ways to verify legitimate loan companies in Canada

Visit these sites to help you verify an online loan lender:

  • Better Business Bureau (BBB).
    The BBB is an independent nonprofit dedicated to strengthening relationships between businesses and customers. It rates how a business works by analyzing customer reviews and complaints, allowing businesses to respond with a resolution. A leader in consumer ratings, the BBB is a reliable resource.
  • Trustpilot.
    A Danish company, Trustpilot is another consumer-run review site with some 500,000 new customer reviews published monthly. Combined with the BBB, you can create a pretty good picture of how a lender runs its business and what you need to know before applying for a loan.
  • FCAC or CCFA complaint database.
    The Financial Consumer Agency of Canada (FCAC) and the Canadian Consumer Finance Association (CCFA) are government-run agencies that help you search for complaints from current and former customers. You can also look into whether these agencies have taken legal action against the lender that you’re interested in.
  • Online forums.
    Don’t stop with the big review sites. Plenty of online forums like Reddit and Quora allow you to browse real customer opinions and crowdsourced answers about lenders and potential scams. Or, post your own questions about a lender and see what other customers have to say.

Compare legitimate personal loans companies in Canada

There are a number of legitimate personal loan companies operating in Canada. These include the following loan providers:

1 - 8 of 8
Name Product Interest Rate Loan Amount Loan Term Requirements Link
Loans Canada Personal Loan
Secured from 5.40%, Unsecured 8.00% - 46.96%
$300 - $50,000
3 - 60 months
Requirements: min. credit score 300
Go to site
More Info
A broker with the largest lender network in Canada. Fill out one application and get matched for free with lenders.
goPeer Personal Loan
8.00% - 33.92%
$1,000 - $25,000
36 - 60 months
Requirements: recommended income $40,000/year, no payday loan debt, min. credit score 600
Go to site
More Info
Connects creditworthy Canadians looking for an unsecured loan with Canadians looking to invest. Apply in minutes and get a response within 24 hours.
Spring Financial Personal Loan
17.99% - 46.96%
$500 - $15,000
9 - 48 months
Requirements: min. income $1,800/month, 3+ months employed, min. credit score 500
Go to site
More Info
If you're not eligible for an unsecured loan, you may be offered a credit builder loan to help improve your credit score.
SkyCap Financial Personal Loan
12.99% - 39.99%
$500 - $10,000
9 - 60 months
Requirements: min. income $1,600/month, stable employment, min. credit score 550, no bankruptcy
Go to site
More Info
Apply in less than 5 minutes for an unsecured loan and if approved, receive financing in as little as 24 hours.
Loanz Personal Loan
29.90% - 46.90%
$1,000 - $15,000
12 - 60 months
Requirements: min. credit score 570, min. income $1,200/month, 3+ months employed
Go to site
More Info
Apply online and get approved in less than 3 minutes. Receive funds in as little as 15 minutes. Borrowers with bad credit or no credit can apply.
LoanConnect Personal Loan
Secured from 10.00%, Unsecured 5.99% - 46.96%
$100 - $50,000
3 - 120 months
Requirements: min. credit score 300
Go to site
More Info
Fill out one application with this broker and get pre-approved by different lenders in 5 minutes.
OFFER
Mogo Personal Loan
9.90% - 46.96%
$200 - $35,000
6 - 60 months
Requirements: min. income $13,000/year, min. credit score 500
Go to site
More Info
Get a free quote without affecting your credit score and get an unsecured loan the same day. 100-day money-back guarantee: If you're not happy with your loan, pay back the principal and get the 100 days of paid interest and fees back.
SECURED
Fairstone Secured Personal Loan
19.99% - 24.49%
$5,000 - $50,000
36 - 120 months
Requirements: must be a homeowner, min. credit score 560
Go to site
More Info
Use your home equity to get a secured loan with flexible repayment options. Get a free quote without impacting your credit score.
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Bottom line

Personal loan scams are becoming more common and more sophisticated, which means it’s important to know how to protect yourself. Learn more about how you can recognize personal loan scams as well as who you can report them to. You can also use this post to compare legitimate loan companies in Canada.

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