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Bad credit loans in Canada

You can take out different types of bad credit loans. Here are your options.

If you have bad credit, you may think loans are out of reach. That isn’t the case, though. While you may find yourself paying higher interest rates than other borrowers, if you can demonstrate that you have the ability to repay a loan, there are lenders that will work with you. Overall, bad credit loans are typically meant for borrowers who have a credit score of 599 or less.

6 types of bad credit loans online

Bad credit loans come in many shapes and sizes. If you’re unsure of what type of bad credit loan is the best fit for your needs, here’s a closer look at your options.

Type of bad credit loanTypical APR for bad creditTypical loan amounts for bad creditTypical loan termsCollateral required?
Unsecured personal loan13% to 47%$1,000 to $15,0006 to 60 monthsNo
Installment loan19% to 47%$500 to $10,0006 to 60 monthsNo
Payday loanOver 300%Up to $1,500By your next paydayNo
Home equity loan10% to 29%Up to $50,00060 to 120 monthsYes, your home
Car title loanOver 300%$500 to $50,0003 to 60 monthsYes, your car (usually must be paid off)
Credit builder loan9.5% to 20%$1,250 to $10,0006 to 24 monthsYou don’t have to put up an asset, but the lender withholds your loan funds until after you pay off the loan. If you fail to make payments, the lender can keep the funds.

Unsecured bad credit loans in Canada

Unsecured loans, which don’t require any collateral, come with higher interest rates compared to secured loans, but you won’t have your assets on the line in case you default on your loan.

1. Unsecured personal loans

Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
LoanConnect Personal Loan
Secured from 1.90%, Unsecured from 5.75%-46.96%
$500 - $50,000
3 - 120 months
Currents debts must total less than 60% of income
Min. credit score: 300
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An online broker who helps inform clients towards better finances. Get pre-approved by different lenders for unsecured or secured loans in 5 minutes with any credit score.
Spring Financial Personal Loan
17.99% - 46.96%
$500 - $15,000
9 - 48 months
Min. income of $1,800 /month, 3+ months employed
Min. credit score: 400
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An online lender offering unsecured personal loans and credit builder loans. Those filing for bankruptcy or a consumer proposal can also apply. If you're not eligible for an unsecured loan, you may be offered a loan to help rebuild your credit.
SkyCap Financial Personal Loan
12.99% - 39.99%
$500 - $10,000
9 - 36 months
Min. income of $1,200 /month, stable employment
Min. credit score: 550
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An online lender offering unsecured personal loans to borrowers with a wide range of credit scores. Apply in less than 5 minutes and if approved, receive financing in as little as 24 hours.
FlexMoney Personal Loan
18.90% - 46.93%
$500 - $15,000
6 - 60 months
Min. income of $2,000 /month, 3+ months employed
Min. credit score: 500
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An online lender offering flexible unsecured loans. Apply in less than 10 minutes and if approved, receive financing in as little as 24 hours. Pay off your loan at any time.
Loans Canada Personal Loan
Secured from 2.00%, Unsecured from 8.00% to 46.96%
$300 - $50,000
3 - 60 months
No min. income or employment requirements
Min. credit score: 300
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An online broker with the largest lender network in Canada. Get matched for free with lenders offering both unsecured and secured loans through one quick application regardless of your financial situation.
OFFER
Mogo Personal Loan
9.90% - 46.96%
$200 - $35,000
6 - 60 months
Min. income of $13,000 /year
Min. credit score: 500


Mogo offers a 100-day money-back guarantee. If you're not happy with your loan, pay back the principal and get your 100 days of paid interest and fees back.
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An online lender who aims for a hassle-free process through same-day unsecured loan approval and funding. Get a loan fast and track your credit score for free.
Loan Away Personal Loan
19.90% - 45.90%
$1,000 - $5,000
6 - 36 months
No min. income or employment requirements
Min. credit score: 300
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A lender that approves unsecured loans in as little as 20 minutes. Get affordable monthly repayments with any credit score.
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Unsecured personal loans are the most common personal loans on offer, especially by online lenders. With unsecured personal loans for borrowers with bad credit, lenders often shift the focus from your credit score to your ability to make monthly payments. Because of this, you’ll need to prove you have a stable source of income to repay your loan as agreed.

2. Installment loans

Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
LoanConnect Installment Loan
32.00%
$500 - $2,500
3 - 6 months
Currents debts must total less than 60% of income
Min. credit score: 300
Go to site
More Info
Get approved by different lenders in as little as 60 seconds with any credit score. Access resources to help you work toward better finances.
FlexMoney Installment Loan
18.90% - 46.93%
$500 - $15,000
6 - 60 months
Min. income of $2,000 /month, 3+ months employed
Min. credit score: 500
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More Info
Apply online in less than 10 minutes and if approved, receive financing in as little as 24 hours. Pay off your loan at any time.
Loans Canada Installment Loan
8.00% to 46.96%
$500 - $50,000
3 - 60 months
No min. income or employment requirements
Min. credit score: 300
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More Info
An online broker with the largest lender network in Canada. Get matched with lenders for free through one quick application regardless of your financial situation.
Mogo Installment Loan
9.90% - 46.96%
$200 - $35,000
6 - 60 months
Min. income of $13,000 /year
Min. credit score: 500


Mogo offers a 100-day money-back guarantee. If you're not happy with your loan, pay back the principal and get your 100 days of paid interest and fees back.
Go to site
More Info
An online lender who aims for a hassle-free process through same-day unsecured loan approval and funding. Get a loan fast and track your credit score for free.
SkyCap Installment Loan
12.99% - 39.99%
$500 - $10,000
9 - 36 months
Min. income of $1,200 /month, stable employment
Min. credit score: 550
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An online lender offering installment loans to borrowers with a wide range of credit scores. Apply in less than 5 minutes and if approved, receive financing in as little as 24 hours.
Fairstone Installment Loan
26.99%-39.99%
$500 - $25,000
6 - 60 months
Able to make monthly repayments
Min. credit score: 560
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More Info
Receive a personalized no-obligation loan quote in minutes without affecting your credit score. Finalize your loan application online and receive your funds as quickly as the same day.
Cash Money Installment Loan
46.93%
$500 - $10,000
6 - 60 months
Stable source of income
Min. credit score: 560
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Cash Money offers installment loans up to $10,000 for Alberta, Manitoba and New Brunswick residents. Online installment loans are available in Alberta only. Residents of Manitoba and New Brunswick must apply in-store.
Loan Away Installment Loan
19.90% - 45.90%
$1,000 - $5,000
6 - 36 months
No min. income or employment requirements
Min. credit score: 300
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Get approved for an installment loan in as little 20 minutes. Get affordable monthly repayments no matter your credit score.
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Installment loans are a specific type of personal loan offered by online lenders. They generally have smaller loan amounts, shorter loan terms and higher interest rates than conventional personal loans. They also have more lenient eligibility criteria. The terms for your loan are typically negotiated with or set by your lender, who will tell you how much you need to pay every month, with interest factored in. When you agree on the terms of a loan, you’ll get a lump sum of cash, and then you’ll be legally responsible for paying that amount back in the required timeframe.

3. 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.
Name Product Loan Amount Loan Term Interest Rate Turnaround Time Serviced Provinces
Cash Money Payday Loan
$100 - $1,500
5 - 40 days
Varies by province
As little as 15 minutes with INTERAC e-Transfer
BC, NS, ON, SK
Apply for your first $300 payday loan at a $20 cost (excludes SK applicants).

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
Newfoundland and Labrador $21 per $100 borrowed
Northwest Territories, Nunavut & the Yukon $60 per $100 borrowed
Quebec Limit of 35% annual interest rate (AIR)

Payday loans are a quick-fix solution if you need a quick injection of cash. You can only borrow up to $1,500, depending on how much you earn and where you live in the country, and the amount must be repaid by your next payday. You should always 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. Payday loans come with notoriously high interest rates and quick repayment terms.

Secured bad credit loans

Lenders may be more willing to approve you for a bad credit loan if you offer to secure your loan with an asset, such as your house or your car.

1. Home equity loans

Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
Fairstone Personal Loan (Secured)
19.99% - 23.99%
$5,000 - $50,000
60 - 120 months
Must be a homeowner
Min. credit score: 560
Go to site
More Info
Use your home equity to get a secured loan up to $50,000 with flexible repayment options and a long loan term. Get a quote without impacting your credit score.
Alpine Credits Home Equity Loan
10.00% - 22.99%
$10,000 - $500,000
Up to 60 months
Must be a homeowner
Min. credit score: 300
Check eligibility
More Info
Alpine Credits offer home equity loans in amounts from $10,000 to $500,000. Must be a homeowner to qualify. Check eligibility for this loan through LoanConnect.
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With home equity loans, you will need to provide details of your mortgage, your personal financial position and the reason you’re taking out the loan. Your application will be assessed and if approved, 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. How much you own in your home will be used as collateral for the loan. If you were to default on the loan, the lender could recoup its losses by taking ownership of that equity.

2. Car title loans

Name Product Loan Interest Rate Max. Loan Amount Loan Term Min. Credit Score Requirements
Loans Canada Vehicle Title Loan
Loans Canada Vehicle Title Loan
0% to 29.99%
$35,000
3 - 96 months
300
Min. income of $1,800 /month, 3+ months employed
Get access to financing from multiple lenders across Canada through a single application with Loans Canada. Bad credit, CERB and EI borrowers are considered.
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A car title provides proof of ownership for your vehicle. When you apply for a car title loan, you’re using your vehicle as collateral to secure your loan the same way you’d use your property with a home equity loan. If you default on your loan, the lender could recoup its losses by taking ownership of your car.

3. Credit builder loans

Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
Refresh Financial Credit Builder Loan
19.99%
$1,250 - $10,000
3-5 years
No min. income or employment 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. Your payments are reported to the credit bureaus, potentially impacting your credit score.
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With credit builder loans (sometimes called “cash-secured loans”), you don’t receive the loan funds until after you pay off the loan. If you stop making payments, the lender can keep the loan funds or a portion of it. You’ll need to make timely payments on your loan, which your lender will report to the credit bureaus. Your credit score will improve as you make your payments.

What should I know about the interest rates of bad credit loans?

When you’re searching for bad credit loans, the interest rate a lender offers is one of the most crucial factors to take into consideration. Unfortunately, bad credit loans in Canada have 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?

When searching for bad credit loans in Canada, you might see lenders using the terms “interest rate” and/or “APR”, which stands for “annual percentage rate”. This can cause confusion because the two are different.

  • Interest rate: This is the amount 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. Looking at the APR is useful because it gives you a broader view of the cost of the loan. Sometimes, a loan doesn’t have other fees. In this case, the APR is the same as the annual interest rate.

Where can I get bad credit loans in Canada?

While you might not be able to borrow from a large bank when you have bad credit, you still have several options to choose from. Across the board, borrowers will find it far easier to get approved for bad credit loans from online lenders and brokers compared to banks and credit unions. Here’s a closer look at each option, and their key features and drawbacks.

Online lenders

Online lenders are your strongest 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 at most. But with this speed comes a trade-off: your interest rates and fees will be higher than what you’d get with a bank or credit union.

Banks

Both national and local banks may be willing to work with bad credit borrowers, but not all will. Typically you’ll need a credit score of 660 or higher to qualify, but if you’ve been a long-time customer of the bank and have an established relationship, you might have some luck.

Credit unions

Some credit unions offer financing to borrowers with all credit types, and they usually offer lower rates than you’d find at other institutions. If you’ve been a long-time customer with your credit union, you’d likely have a much better chance of being approved for a personal loan. If you’re not a member of a credit union, you’ll have to become a member, which means it could take a few weeks to process your loan.

How do I get a loan with bad credit?

Applying for bad credit loans is relatively easy, especially if you’re applying to an online lender or broker. Depending on the lender you’ve decided to work with, you may be able to complete an application online, over the phone or in-person at a physical branch. The key to a successful application is making sure you match the eligibility criteria from the start.

To help you decide, here’s a closer look at the application process and eligibility criteria for each type of bad credit loan:

Type of bad credit loanBasic eligibility requirementsBasic information required
Unsecured personal loan
  • At least 18 years old or the age of majority in your province
  • Meet minimum income requirements
  • Meet minimum credit score
  • 3+ months employed
  • 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, tax returns or bank statements
  • Loan purpose and loan amount
  • Bank account details
  • Social Insurance Number (SIN)
Installment loan
  • At least 18 years old or the age of majority in your province
  • Meet minimum income requirements
  • Meet minimum credit score
  • 3+ months employed
  • 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, tax returns or bank statements
  • Loan purpose and loan amount
  • Bank account details
  • Social Insurance Number (SIN)
Payday loan
  • At least 18 years old or the age of majority in your province
  • Have proof of a steady source of income to repay your loan
  • Active bank account to set up withdrawals to repay your 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
  • At least 18 years old or the age of majority in your province
  • Meet minimum income requirements
  • Meet minimum credit score
  • 3+ months employed
  • Must be a homeowner with equity in your home you are willing to use as collateral
  • 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
  • At least 18 years old or the age of majority in your province
  • Meet minimum credit score
  • Must be the owner of a vehicle you’re willing to use to secure your 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
  • At least 18 years old or the age of majority in your province
  • Meet minimum income requirements with proof of income that demonstrates you can pay off your 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

5 steps to apply for bad credit personal loans in Canada

If you’re looking for bad credit personal loans, following these steps can help you find the best personal loan available to you – even with bad credit.

  1. Check your credit. Before you get started with an application, check both your credit report and credit score so you have a good read on how you’ll appear to lenders. If you notice any inaccuracies, contact your creditor and the credit bureau to report the error and make sure it’s removed before you apply.
  2. Compare lenders and check eligibility requirements. Start your search by looking for personal loan providers with a minimum credit score requirement that’s lower than your score. Decide on how much you’d like to borrow and if you’d like to secure your loan to help narrow your scope, too. Then compare your options using factors like loan amounts, terms, restrictions on the use of loan funds, interest rates and fees.
  3. Apply to your top choices and wait for pre-approval. Fill out applications to the lenders which you’ve shortlisted for loans you fit the eligibility criteria for. Pre-qualifying for a bad credit personal loan gives you an estimate of the interest rate, origination fee, loan amounts and terms you might be eligible for.
  4. Pick a lender and complete the rest of your application. If you’re happy with a loan offer you’ve prequalified for, proceed with the rest of the application process. Often, you can complete the form online.
  5. Review and sign your final offer. Once your lender verifies your identity and your income, you’ll receive your final loan offer. Read over your loan agreement, taking factors such as your loan amount, interest rate and fees into account. Once you sign your loan, you should receive your loan funds in your bank account within 3 business days.

5 tips to get a personal loan with bad credit

While these tips won’t guarantee you’ll be approved for a bad credit personal loan in Canada, they can help increase your chances when you have less-than-perfect credit.

  1. Rebuild your credit. If you can wait at least 6 months, take steps to rebuild your credit first – or consider a credit-builder loan. While it will take time and careful budgeting, improving your score means lower rates in the future and a better chance of being approved for larger loans.
  2. Compare multiple bad-credit lenders. Take the time to prequalify with a few different lenders to find the best offer available to you. You can even let an online loan connection service do the work for you.
  3. 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.
  4. Opt for a secured loan. Lenders may be more willing to offer you a personal loan – with lower rates – if you back it with collateral. Just be careful: Defaulting on a secured loan means losing whatever asset you put on the line.
  5. Watch out for predatory lenders. Borrowers with bad credit tend to be targeted more with personal loan scams, so do your research before applying. Check consumer review sites like the Better Business Bureau and Trustpilot to verify the lender is legit.

Regardless of the type of bad credit loan you want to qualify for, try your hardest to put your best financial foot forward. Show lenders you have a steady source of income, stay on top of making payments on your current debts and steer away from applying for too much credit in one go.

What can I use bad credit loans in Canada for?

Overall, there are no restrictions on how you can use this type of personal loan. 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

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 make sure you can afford the repayments.

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