Personal loans in Toronto can range anywhere from $500 to $50,000 or more, giving you the flexibility to use the funds to pay off debts, pay for a home renovation or take care of other expenses. Find out which providers offer personal loans in Toronto and how to compare your options to find the best fit for you needs.
Compare personal loans in Toronto
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Types of personal loans in Toronto
If you’re searching for a personal loan, you’ll need to zero in on what type best suits your needs. Compare the loan types below and their key differences:
Unsecured loans
Unsecured loans are one of the most popular personal loans on offer. They typically come with higher interest rates than secured loans because they don’t require any form of collateral. The process of getting unsecured loans is also faster since lenders don’t have to estimate the value of your collateral. Instead, these loans rely on factors such as your credit score, income and debts to determine your eligibility.
Installment loans
As you search for personal loans in Toronto, you may encounter the term “installment loans”. Installment loans are unsecured personal loans offered by alternative lenders. These loans tend to have higher rates and more flexible eligibility requirements because they are designed for people with fair or bad credit below 660.
Secured loans
A secured loan involves some sort of collateral to secure your loan, such as your home equity or car title. With your assets as insurance, they come with lower interest rates. If you default on your loan, your lender has the right to repossess the assets you’ve put on the line.
Cosigned loans
If you can’t qualify for a personal loan in Toronto on your own, you can ask a close relative to cosign on your loan to act as a guarantor. If you default on your loan, your guarantor will have to pick up the slack, and both your credit scores will suffer if repayments aren’t made on time.
Fixed rate loans
With fixed rate loans, you’re locking in an interest rate at the beginning of your loan term so your repayments stay the same throughout the duration of your loan. Some people prefer this because you have a set repayment plan for the life of your loan. Bear in mind that you may not be able to make early repayments or extend your term if you need it.
Variable rate loans
Variable rate personal loans have fluctuating interest rates throughout the term of your loan, depending on market conditions. That means the breakdown of your monthly payments will vary as your interest rate shifts. If your rate goes up, more of your payments will go towards the interest rather than the principal. Economists predict rate hikes this year, so if you get a variable rate now, be prepared for your rate to increase.
Types of lenders offering a personal loan in Toronto
The most common personal loan lenders you’ll come across in Toronto include the following:
Alternative/online lenders
If you have bad credit, no credit or you’re dealing with a bankruptcy or consumer proposal, alternative lenders tend to have the most lenient qualifying requirements. Many offer a completely online application process. If you’re in Toronto, you can apply as long as the lender operates in Ontario and you have a reliable Internet connection. Alternative lenders offer personal loans with fixed rates.
Canada’s Big Five banks and other major financial institutions issue personal loans with fixed or variable rates. They often come with lower interest rates than alternative lenders, but they have strict eligibility requirements, especially expecting borrowers to have a higher credit score. It’s usually very difficult to qualify for these loans if you have bad credit.
Besides the Big Five, major banks in Toronto include National Bank.
Credit unions
Credit unions issue personal loans that are a little bit more flexible than big bank loans. To get a personal loan in Toronto from a credit union, you’ll usually need apply to be a member. Credit unions can have more competitive interest rates than big banks and alternative lenders, but you’ll need good to excellent credit. You can choose between a variable rate or fixed rate.
Examples of credit unions include Alterna Savings and Meridian.
Where to get a personal loan in Toronto if you prefer to visit a branch
While online lenders have plenty of personal loan options for Torontonians, you may prefer a lender with a physical location and in-person customer service. Here’s a look at the key players with branches, excluding the big banks:
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How do I choose the right personal loan in Toronto?
When you’re shopping for the best personal loan in Toronto for your needs, focus on these key factors:
Interest rates. Shopping around for the lowest interest rate you can qualify for is important because it will save you money over the lifetime of your loan. Focus on the annual percentage rate (APR), which is the annual interest rate plus other fees you’ll pay to get the loan.
Eligibility requirements. Make sure you meet the baseline criteria for the lender you’re thinking of working with. This includes requirements like credit score, income and employment status. Some lenders only operate in certain provinces, so check on this detail too.
Terms and repayment options. The term of your loan and your repayment conditions determine how you’ll repay your loan each month over a set time. If you need lower payments, you may prefer a lender that offers long-term personal loans to the tune of 3 years or more (but know that you’ll pay more interest overall). You may also want a lender that allows you to make payments weekly, fortnightly or monthly and gives you the flexibility to make early repayments without penalties.
Fees and charges. Fees can add unnecessary costs to your loan, driving up the true cost of your loan. Watch out for hidden fees and charges in your contract so that you’ll know what extras you’ll need to pay for before you sign up. This could be the deciding factor between two lenders on your shortlist. Charges you should watch out for are origination fees (fee to process your loan), NSF fees, late payment fees, prepayment penalties and loan insurance.
Customer reviews. Read customer feedback to give you an idea of the quality of service you can expect with any of your top contenders before getting a personal loan in Toronto. You may wish to avoid a lender with a noticeable pattern of complaints.
What are the eligibility requirements?
You’ll find personal loan lenders in Toronto have their distinct set of requirements you’ll need to meet, but overall these are their baseline expectations:
Be 18 years old or the age of majority in your province or territory. You’ll need to provide 1 to 2 pieces of ID for identity verification.
Be a Canadian citizen or a permanent resident. You’ll need to provide proof of address via utility bills or other documentation.
Have a bank account. You can provide your lender with a void cheque or your banking details to arrange a deposit of your funds and automatic withdrawals of your loan repayments.
Have proof of regular income and ongoing employment. Some lenders will accept government benefits, pension and self-employment, while others insist on only taking applicants with a full-time or part-time job.
Meet the minimum credit score. Some lenders say they are willing to work with borrowers with bad credit, no credit or a history of bankruptcies and consumer proposals. Others have strict credit score minimums you must meet to qualify.
Bad credit personal loans in Toronto
If you’re having trouble qualifying for a personal loan, there are plenty of lenders in the Greater Toronto Area that provide bad credit loans. With bad credit personal loans, lenders will focus on your income and ability to repay your loan instead of your credit score. You will pay much higher interest rates because of the risk lenders are shouldering, though.
Your options for a bad credit personal loan in Toronto include the following:
Type of loan
Loan amount
Loan term
Interest rate
Unsecured personal loans
$$500–$10,000
3 - 60 months
18% to 47%
Secured personal loans (your house or car as collateral)
Varies based on the value of the collateral
3 to 240 months
9% to 49%
How to apply for a personal loan in Toronto
Once you’ve done your research and found the personal loan in Toronto you want to apply for, follow these steps to begin. Bear in mind, these steps may vary depending on the lender:
Head to your lender’s website to start your application. You can apply for a personal loan by visiting the main application site for the provider you’re interested in.
Fill out application details. Fill out personal details such as your full name, address, email and phone number to start your application.
Provide financial details. Input details about your income, debts, assets and other necessary financial information.
Provide employment information. You’ll likely be asked to provide the name of your employer, your job title, length of service and annual gross income.
Submit relevant documents. You could be required to show bank statements, employment letters, tax assessments and other documents to support your application.
Submit to a credit check. You’ll usually have to submit to a personal credit check, whether you’re applying to a bank, credit union or alternative lender.
Review final details before submitting. Read the fine print of your personal loan and make sure you understand what you’re getting yourself into before you hand in your application.
Click submit. Once you’re ready to apply, click submit on your application. You can also call your personal loan provider directly to apply over the phone or visit their physical branch if they have one.
The cost of a personal loan in Toronto will be based on your personal factors, including the following:
Your credit score. Borrowers with good to excellent credit scores above 660 will encounter lower APRs than borrowers with fair to bad credit scores below 660.
Your loan amount. How much you decide to borrow will influence your APR.
Your loan term. You could decide to take out a 3-month loan right up to a 10-year loan. Your loan term will also affect your APR.
Any extra fees and charges. From origination fees, administrative fees, NSF fees and prepayment penalties, you may have extra charges tacked onto your loan.
Between credit cards, lines of credit and other loans (excluding mortgages), Canadians are swimming in debt. Credit reporting agency, Equifax Canada, reported on December 6, 2022 that the average Canadian consumer has $21,183 of debt.
Debt in Toronto
The average Torontonian is shouldering $20,215 of non-mortgage debt, according to Equifax. Canada’s largest city trails behind the likes of Vancouver (22,754), St. John’s (23,737), Edmonton ($24,225), Calgary ($24,709) and Fort McMurray ($38,017).
Income in Toronto
According to the 2021 Census Profile from Statistics Canada, the average total income for Torontonians was $62,050 in 2020. This includes all types of income, such as employment, rental, investment, retirement and government benefits.
Frequently asked questions about personal loans in Toronto
Ensuring you're working with a legitimate lender is important before proceeding. When you're examining a lender, make sure of the following:
It's registered as a business in your province or territory.
Has a physical address for a head office, a phone number and an email address for customer service. If a lender is missing this key information, this may be a red flag.
Doesn't offer "guaranteed approval." Steer away from any lenders promising a guaranteed approval personal loan. No trustworthy and reliable lenders can guarantee a personal loan, especially if you have bad credit in Canada. Legitimate lenders evaluate a borrower's financial situation before approving, even if they offer an instant decision.
That depends on the type of lender you'd like to work with. Major financial institutions like banks and credit unions in Toronto will want to see good to excellent credit (above 660), while online lenders can approve personal loans even if you have fair credit (560 to 659) or bad credit (below 560).
Yes, it can, especially if you stay on top of each loan repayment and use your loan as a golden opportunity to rebuild your credit. If your credit is in bad shape, you can repair the damage by making loan repayments according to schedule over time, showing lenders you're a trustworthy borrower.
Carmen Chai is a freelance writer at Finder, specializing in financial products. She is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. She has reported on personal finance, mortgages, and banking products for nearly a decade.
Find out the benefits and drawbacks of taking out a personal loan with a credit union.
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Toronto personal finances at a glance