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Compare bad credit loans in Canada

Find out where you can apply online and get approved with a low credit score.

If you have bad credit and need a loan to cover your bills or unexpected expenses, you have options. There are many lenders in Canada that specialize in loans for bad credit, and you can get one as soon as the same day or the next day. However, not all bad credit loans and lenders are the same.

This guide covers the different types of bad credit loans in Canada available to you and what you need to know to pick the best one for your needs.

5 bad credit loans in Canada

As you search for bad credit loans online, you’ll encounter different types. Here’s a breakdown of each bad credit loan in Canada.

Type of bad credit loanHow it worksInterest rateLoan amountLoan term
Unsecured personal loanBorrow without collateral and repay in installments.18% to 47% APR$500 to $15,0006 to 60 months
Payday loanBorrow without collateral and repay by your next payday.$15 to $25 for every $100 borrowed$100 to $1,500By your next payday
Home equity loanBorrow using your house as collateral and repay in installments.10% to 29% APR$5000 to $75,00060 to 120 months
Car title loanBorrow using your car as collateral and repay in installments. You can continue to use your car, but it must be paid off.9% to 49% APR$500 to $50,0003 to 60 months
Credit builder loanMake repayments that your lender will report to the credit bureaus to increase your credit score. You don’t receive the loan amount until after you make your repayments.9.5% to 20% APR$1,250 to $10,0006 to 24 months

1. Unsecured personal loans for bad credit

Best for: Borrowers looking for a bad credit personal loan without collateral.

You can find personal loans among banks, credit unions and online lenders, but if you have bad credit, you have a better chance of approval if you apply to an online lender. With unsecured personal loans for bad credit, lenders shift the focus from your credit score to your ability to make loan repayments. Lenders will want to see that you have a stable source of income.

Compare personal loans for bad credit in Canada

1 - 8 of 8
Name Product Interest Rate Loan Amount Loan Term Requirements Link
Loans Canada Personal Loan
Secured from 2.00%, Unsecured from 8.00% to 46.96%
$300 - $50,000
3 - 60 months
Requirements: min. credit score 300
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More Info
A broker with the largest lender network in Canada. Fill out one application and get matched for free with lenders.
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
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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
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Apply in less than 5 minutes for an unsecured loan and if approved, receive financing in as little as 24 hours.
Loanz Personal Loan
29.9% - 46.9%
$1,000 - $15,000
12 - 60 months
Requirements: min. credit score 570, min. income $1,200/month, 3+ months employed
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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 1.90%, Unsecured 6.99%-46.96%
$500 - $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.
FlexMoney Personal Loan
18.90% - 46.93%
$500 - $15,000
6 - 60 months
Requirements: min. income $2,000/month, 3+ months employed, min. credit score 500
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More Info
Apply in less than 10 minutes for an unsecured loan and if approved, receive financing in as little as 24 hours. Pay off your loan any time without penalty.
OFFER
Mogo Personal Loan
9.90% - 46.96%
$200 - $35,000
6 - 60 months
Requirements: min. income $13,000/year, min. credit score 500
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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.
Cash Money Installment Loan
46.93%
$500 - $10,000
6 - 60 months
Requirements: stable source of income, min. credit score 560
Go to site
More Info
Online installment loans are available in Alberta only. Residents of Manitoba and New Brunswick must apply in-store.
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Basic eligibility requirements of personal loans for bad credit

  • Be the age of majority in your province or territory (18 or 19)
  • Be a Canadian citizen or resident
  • Meet the minimum income
  • Meet the minimum credit score

Before you sign up for a bad credit personal loan

  • Know how much you’ll pay in interest and fees. Bad credit loans have high interest rates, so be aware of how much the loan will cost you overall.
  • Examine the payment schedule. Know how much of your payments will go towards paying the interest vs. reducing the principal.
  • Check that the loan will improve your credit score. Confirm with your lender that it will report your on-time payments to the credit bureaus.
  • Research the reputation of the lender. Not all lenders are the same, so make sure the lender you go with is legitimate.

    Signs of a legitimate lender

    • The lender is upfront and clear about the interest rates, fees and overall cost of the bad credit loan.
    • The lender does not pressure you into signing a contract or borrowing more than you need.
    • The lender does not pressure you to get loan insurance. If you do decide to get loan insurance, you don’t make any payments upfront.

    5 steps to apply for bad credit personal loans

    If you’re thinking a bad credit personal loan is right for you, follow these steps:

    Compare bad credit personal loans

    2. Payday loans for bad credit

    Best for: Borrowers who need a loan in a few hours and have considered all other financing alternatives.

    With payday loans for bad credit, you can borrow up to $1,500, and the amount is usually repaid by your next payday. Be careful when signing up for a payday loan, even if you have bad credit and it’s the only financing option available to you. They are fast and easy to get, but payday loans come with notoriously high interest rates and quick repayment terms.

    Compare bad credit payday loans

    ⚠️ Warning: Be cautious with payday loans
    Payday loans are expensive. If you're experiencing financial hardship call Credit Counselling Canada for free financial counselling (Monday-Friday 8:00am-5:00pm at +1 866-398-5999). Consider alternatives instead of a payday loan:
    • Local resources. Government programs and nonprofits offer free financial services and help with food, utilities and rent.
    • Debt relief companies. There are services to help you reduce your debt payments.
    • Payment extensions. Talk with bill providers about longer payment plans or due-date extensions.
    • Side jobs. Sell unwanted items online, sign up for food delivery and more.
    1 - 4 of 4
    Name Product Loan Amount Loan Term Interest Rate Turnaround Time Serviced Provinces Offer
    Money Mart Payday Loan
    $120 - $1,500
    1 - 62 days
    Varies by province
    As little as 1 hour after getting approved
    AB, BC, MB, NS, ON, SK
    To be eligible, you’ll need to be at least 18 years of age with a steady source of income and a chequing account. No credit check required.
    Cash Money Payday Loan
    $100 - $1,500
    5 - 40 days
    Varies by province
    As little as 15 minutes with INTERAC e-Transfer
    BC, NL, NS, ON, SK
    Apply for your first $300 payday loan at a $20 cost (excludes SK applicants).
    Have your banking details ready to get a loan in 2 hours. You'll need to be 18 years of age or older and have a net income of at least $1,000/month. Residents of MB and NB must apply in-store for a loan.
    iCASH Payday Loan
    $100 - $1,500
    7 - 62 days
    Varies by province
    As little as 2 minutes with INTERAC e-Transfer
    AB, BC, MB, NB, NS, ON, PEI
    Get up to 20% in cash back once your payday loan is fully repaid. Conditions apply.
    To be eligible, you'll need to be at least 19 years of age and have a net income of at least $800/month deposited into your bank account.
    GoDay Payday Loan
    $100 - $1,500
    Up to 62 days
    Varies by province
    As little as 2 minutes with INTERAC e-Transfer
    AB, BC, MB, NB, NS, ON, PEI, SK
    To apply, you'll need to be a Canadian resident over the age of 18 with a valid email address, phone number and an open bank account with a Canadian bank or credit union.
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    Maximum borrowing costs per province
    Always refer to your contract for exact repayment amounts and costs as they may vary from our results.
    Province Maximum allowable cost of borrowing
    Alberta, British Columbia, New Brunswick, Ontario & Prince Edward Island $15 per $100 borrowed
    Manitoba & Saskatchewan $17 per $100 borrowed
    Nova Scotia $19 per $100 borrowed
    Newfoundland and Labrador $21 per $100 borrowed
    Northwest Territories, Nunavut & the Yukon $60 per $100 borrowed
    Quebec Limit of 35% annual interest rate (AIR)

    Basic eligibility requirements of bad credit payday loans

    • Be the age of majority in your province or territory (18 or 19)
    • Be a Canadian citizen or resident
    • Have a recurring income

    Before you sign up for a payday loan

    • Know the real cost of payday loans. Payday loans have APRs in the triple digits, making them more expensive than credit cards, credit card cash advances and personal loans.
    • Check your budget for your next payday. Ensure you’ll have enough income left to pay for other debts and expenses once you repay your loan. Otherwise, you might find you need another loan.
    • Look for a licence. Confirm the lender is licensed in your province and follows payday loan regulations. Payday loans are regulated by each province.

    Signs of a legitimate lender

    • The lender does not charge more than what’s legally allowed in your province.
    • The lenders doesn’t ask for any money upfront.
    • The lender has a solid online presence, with its address, email and phone number easily found.
    • The lender has a licence for each province where it operates.

    3 steps to apply for bad credit payday loans online

    The steps to apply for bad credit payday loans are straightforward. It’s possible to get a payday loan in 1 hour or less.

    Compare bad credit payday loans

    3. Home equity loans for bad credit

    Best for: Homeowners who want to lower their interest rate and can manage the repayments.

    With home equity loans, how much you own in your home will be used as collateral. You will need to provide details of your mortgage, your personal financial position and the reason you’re taking out the loan. You will be given a loan based on how much home equity you hold and how much the lender thinks you can afford to repay. If you were to default on the loan, the lender could recoup its losses by taking ownership of your home equity.

    Home equity loans take longer to get than other loans because the lender will need to evaluate how much your house is worth.

    Compare home equity loans for bad credit

    1 - 2 of 2
    Name Product Interest Rate Loan Amount Loan Term Requirements Link
    SECURED
    Fairstone Secured Personal Loan
    19.99% - 23.99%
    $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.
    Alpine Credits Home Equity Loan
    10.00% - 22.99%
    $10,000 - $500,000
    Up to 60 months
    Requirements: must be a homeowner, min. credit score 300
    Check eligibility
    More Info
    Must be a homeowner to qualify. Check eligibility for this loan through LoanConnect.
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    Basic eligibility requirements of home equity loans for bad credit

    • Be the age of majority in your province or territory (18 or 19)
    • Be a Canadian citizen or resident
    • Meet the minimum income
    • Meet the minimum credit score
    • Submit your house for appraisal

    4. Car title loans for bad credit

    Best for: Borrowers who want to increase their chances of approval by using their car as collateral.

    A car title is your proof of ownership of your vehicle, and when you apply for a car title loan, you’re using your vehicle as collateral. You can continue to use your car, but if you default on your loan, the lender could repossess it. Lenders usually need your car to be paid off in order to approve you for a car title loan.

    Get a car title loan with bad credit

    1 - 1 of 1
    Name Product Loan Interest Rate Max. Loan Amount Loan Term Requirements
    Loans Canada Vehicle Title Loan
    Loans Canada Vehicle Title Loan
    0% to 29.99%
    $35,000
    3 - 96 months
    Requirements: min. income $1,800/month, 3+ months employed, min. credit score 300
    A broker with the largest lender network in Canada. Fill out one application and get matched for free with lenders. Bad credit, CERB and EI borrowers are considered.
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    Basic eligibility requirements of car title loans

    • Be the age of majority in your province or territory (18 or 19)
    • Be a Canadian citizen or resident
    • Meet the minimum income
    • Drive your car to the lender’s office or submit photos for inspection

    5. Credit builder loans for bad credit

    Best for: Borrowers who want to improve their credit score and can wait at least 6 months to get their money.

    With credit builder loans (sometimes called “cash-secured savings loans”), you don’t receive the loan amount until after you pay off the loan. If you stop making payments, the lender can keep the loan money or a portion of it. You’ll need to make timely payments on your loan, which your lender will report to the credit bureaus so that your credit score can improve.

    Get a credit builder loan with bad credit

    1 - 1 of 1
    Name Product Interest Rate Loan Amount Loan Term Requirements Link
    Refresh Financial Credit Builder Loan
    19.99%
    $1,250 - $10,000
    3-5 years
    Requirements: min. credit score 300
    Go to site
    More Info
    No funds are provided by Refresh upfront. Instead, funds are placed into a secured account to be accessed later. Payments are reported to the credit bureaus, potentially impacting your credit score.
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    Basic eligibility requirements of credit builder loans

    • Be the age of majority in your province or territory (18 or 19)
    • Be a Canadian citizen or resident
    • Meet the minimum income

    Where can I get bad credit loans in Canada?

    Across the board, borrowers will find it far easier to get approved for bad credit loans from online lenders and brokers compared to traditional lenders. Here’s a closer look at your options.

    Online lenders

    Online lenders are a solid option if you have bad credit and need money fast. They have more lenient requirements than banks and credit unions. Many will still work with borrowers who have less-than-perfect credit, and the turnaround time is often just 1 to 2 business days if the loan is unsecured. But with speed and leniency come a trade-off: your interest rates will be higher than what you’d get with a bank or credit union.

    Online brokers

    Instead of applying directly to an online lender, you can apply to an online broker. By filling out 1 application, online loan brokers like Loans Canada and LoanConnect will match you with lenders that want to finance you based on your financial situation. But if you don’t want your information to be shared with third-party lenders, then you may prefer applying directly to an online lender.

    Bad credit loans in Canada have high interest rates

    The interest rate a lender offers is one of the most important factors to consider. Unfortunately, bad credit loans in Canada have much higher interest rates compared to good credit loans because lenders are taking on more risk to lend you money.

    What is APR and why is it important?

    As you search for bad credit loans in Canada, you might encounter the terms “interest rate” and/or “APR” (annual percentage rate). This can cause confusion because the two are different.

    • Interest rate: This is what the lender charges you for borrowing money from them. It is a percentage of the amount you borrow, and it is usually an annual interest rate.
    • APR: This is the annual cost of a loan that includes the annual interest rate plus other fees you need to pay to take out the loan. Looking at the APR is helpful because it gives you a broader view of the cost of the loan. Sometimes, a loan doesn’t have other financing fees. In this case, the APR is the same as the annual interest rate.

    6 tips to get a bad credit loan

    Here are 6 tips to consider before you apply for bad credit loans in Canada.

    1. Opt for a secured loan.

    Lenders may be more willing to offer you a personal loan – at better rates – if you back it with collateral. Just be careful: Defaulting on a secured loan means losing whatever asset you put on the line.

    2. Find a cosigner.

    Having a friend or family member willing to vouch for you and cosign a loan can significantly increase your chances of approval. But they’ll be on the hook for repayments should you find yourself unable to pay, so make sure they understand what they’re committing to.

    3. Watch out for predatory lenders.

    People in a desperate financial situation are often targeted, so do your research before applying. Check consumer review sites like the Better Business Bureau and Trustpilot to verify the lender is legit.

    4. Do not rush.

    Do not sign anything without understanding the terms of your loan, such as how much the loan will cost you overall, how long it’ll take you to repay it, the payment schedule and any extra fees you might encounter. Avoid lenders that pressure you into signing.

    5. Watch out for long loan terms and open terms.

    Bad credit personal loans with long loan terms cause borrowers to pay more interest. Aim to get the shortest loan term possible with payments you can still manage. Open terms that allow you to pay off the loan whenever you want can also be risky because the longer you wait to pay off your loan balance, the more interest you’ll pay.

    6. Rebuild your credit first.

    If you can wait at least 6 months, rebuild your credit first. While it will take time and careful budgeting, improving your score means lower rates in the future and a better chance of approval.

    What can I use bad credit loans in Canada for?

    Overall, there are no restrictions on how you can use bad credit loans. Once you qualify and verify your identity and income, your lender will deposit your funds into your account, and you can use the cash as needed.

    Bad credit loans in Canada are most often used for:

    • Consolidating debts
    • Injecting short-term cash flow into your account until your next payday
    • Financial emergencies
    • Paying for monthly bills
    • Funding a big purchase
    • Rebuilding your credit

    What information will I need to provide for bad credit loans in Canada?

    Applying for bad credit loans in Canada is pretty simple. Depending on the lender you’ve decided to work with, you can complete an application online, over the phone or in person at a physical branch.

    Here’s a closer look at the documents and information you may need to provide on your application:

    Type of bad credit loanRequired documents and information
    Unsecured personal loan
    • Name and date of birth
    • Contact information
    • Employment details, including your job title, company and income
    • Government-issued ID (passport, driver’s licence, citizenship card)
    • Pay stubs or bank statements
    • Loan purpose and loan amount
    • Bank account details
    • Social Insurance Number (SIN)
    Payday loan
    • Name and date of birth
    • Contact information
    • Government-issued ID (passport, driver’s licence, citizenship card)
    • Proof of income (pay stubs, bank statements, benefits letter, etc.)
    • Bank account details
    Home equity loan
    • Name and date of birth
    • Contact information
    • Employment details, including your job title, company and income
    • Government-issued ID (passport, driver’s licence, citizenship card)
    • Proof of income (pay stubs, tax returns or bank statements)
    • Loan purpose and loan amount
    • Bank account details
    • Social Insurance Number (SIN)
    • Copy of the property’s title deed
    • Copies of recent mortgage statements
    • Copies of last property tax bill
    Car title loan
    • Name and date of birth
    • Contact information
    • Employment details, including your job title, company and income
    • Government-issued ID (passport, driver’s licence, citizenship card)
    • Proof of income (pay stubs, tax returns or bank statements)
    • Car title (proof of vehicle ownership)
    • Your vehicle’s VIN (vehicle identification number), make and model info, and permit number
    • Bank account details
    Credit builder loan
    • Name and date of birth
    • Contact information
    • Employment details, including your job title, company and income
    • Government-issued ID (passport, driver’s licence, citizenship card)
    • Proof of income (pay stubs, tax returns or bank statements)
    • Bank account details

        Bottom line

        Bad credit isn’t the end of the line when it comes to taking out a loan. Before applying for a bad credit loan, compare your options, check that you meet the eligibility requirements and understand how much the loan will cost you.

        Frequently asked questions

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