If you're searching for a $2,500 installment loan in Canada but your credit score is not very strong, you may be wondering whether there are realistic options available to you. The good news is that yes, there are lenders that can approve you even if you have bad credit. The bad news is that the rate range is pretty high.
On the other hand, if your credit score is great, the approval process will be easier for you with many lenders.
Use this guide to compare $2,500 loans for all credit scores, including bad credit.
Installment loans from lenders you see online share these key features:
Banks and credit unions in Canada offer personal loans with loan amounts that typically start at $3,000 to $5,000, but there are some exceptions, such as BMO, which starts at $2,000, and BC credit union Vancity, which starts at $100.
That said, banks and credit unions have stricter eligibility requirements overall, so you may have a harder time getting approved if you have bad credit.
Online lenders are the primary source of installment loans for bad credit. To help you find the best bad credit installment loan to suit your needs, follow these steps:
It may be difficult to get a $2,500 loan with no credit check unless you secure your loan with collateral, such as your car, which is known as a car title loan. Unsecured no credit check loans typically max out at $1,500.
While searching for $2,500 personal loans, you’ll see lenders using the terms “interest rate” and/or “APR,” which stands for annual percentage rate. Zero in on the APR, which will show you the true cost of your loan, because it includes the interest rate plus other fees you need to pay. Sometimes a loan doesn’t have other fees. In this case, the APR is the same as the annual interest rate. Compare personal loan rates in Canada.
You’ll need to figure out how long you want to take your loan out for and find lenders that can accommodate your needs. Ultimately, a longer loan term will make your monthly payments cheaper, but you’ll end up paying far more interest over the life of the $2,500 loan, especially if the interest rate you’ve secured is high because of bad credit. A shorter term will have higher monthly payments but will cost you less.
Consider any extra fees like admin fees (fee to process your loan), late payment fees, NSF fees and any other charges.
Make sure the lender you apply with can get your loan amount to you when you need it. You can get a bad credit installment loan as soon as the same day if you apply online. Learn more about same-day loans.
The monthly payment and cost of a $2,500 personal loan will vary greatly, depending on the interest rate you secure, how long you may take to repay the loan and if there are any additional fees you need to account for.
Here’s an example of how much a $2,500 installment loan may be, with different APRs and loan terms at play.
| 12.99% | 19.99% | 29.99% | |
|---|---|---|---|
| Monthly payment | $432.59 | $441.29 | $453.86 |
| Total interest paid | $95.57 | $147.77 | $223.17 |
| Total cost | $2,595.57 | $2,647.77 | $2,723.17 |
| 12.99% | 19.99% | 29.99% | |
|---|---|---|---|
| Monthly payment | $84.22 | $92.90 | $106.12 |
| Total interest paid | $532.02 | $844.26 | $1,320.15 |
| Total cost | $3,032.02 | $3,344.26 | $3,820.15 |
As you can see, you’ll pay less overall if you get the shortest loan term and lowest APR. How long it takes you to repay the loan matters. A $2,500 loan with a loan term of 6 months and a higher APR of 19.99% or 29.99% will cost less than a $2,500 loan with a loan term of 3 years and a lower APR of 12.99%.
Once you have an idea of the APR you’re eligible for, aim for the shortest loan term possible with monthly payments you can still manage.
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You’ll usually need to meet the following criteria to qualify for an installment loan:
Installment loans are a worthwhile option if you’re looking for a smaller financing amounts, like a $2,500 loan, to pay one-off expenses. Overall, however, they usually come with higher interest rates, smaller loan amounts and shorter terms than traditional personal loans.
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