Finder makes money from featured partners, but editorial opinions are our own.

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

2 main types of bad credit loans in Canada

As you search for bad credit loans online, you’ll encounter different types. Here’s a breakdown of the two most common types 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 $10,0006 to 60 months
Payday loanBorrow without collateral and repay by your next payday.$14 to $17 for every $100 borrowed$100 to $1,500By your next payday

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. However, if you have bad credit, your strongest chance of approval is with online lenders because they’re more lenient with eligibility requirements. With unsecured personal loans, online lenders shift the focus from your credit score to your ability to make loan repayments. Lenders will want to see that you have regular income.

Compare personal loans for bad credit in Canada

1 - 6 of 6
Name Product Ratings APR Range Loan Amount Loan Term Requirements
Loans Canada Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
6.99% - 46.96%
$300 - $50,000
3 - 60 months
Requirements: min. credit score 300
Spring Financial Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
10.80% - 46.99%
$500 - $35,000
6 - 60 months
Requirements: min. income $1,800/month, 3+ months employed, min. credit score 500
LoanConnect Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
8.99% - 46.96%
$500 - $50,000
3 - 120 months
Requirements: min. credit score 300
AimFinance Personal Loan
Finder Score:
★★★★★
46.00%
$1,000 - $5,000
9 - 24 months
Requirements: min. credit score 580
Mogo Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
9.90% - 46.96%
$500 - $35,000
6 - 60 months
Requirements: min. income $13,000/year, min. credit score 500
SkyCap Financial Personal Loan
Finder Score:
★★★★★
Customer Survey:
★★★★★
12.99% - 39.99%
$500 - $10,000
9 - 60 months
Requirements: min. income $1,666.67/month, full time employment/pension, min. credit score 575, no bankruptcy
loading

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 find out 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 push 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

    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 with payday loans: they’re fast and easy to get, but payday loans come with notoriously high interest rates and super quick repayment terms.

    Compare bad credit payday loans

    ⚠️ Warning: Be cautious with payday loans
    High-cost payday loans are unsustainable for borrowing over a continued period of time and are expensive as a means of longer-term borrowing. View payday costs and regulations by province here. 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). You may also want to consider payday loan alternatives.
    1 - 3 of 3
    Name Product Loan Amount Loan Term APR Turnaround Time Serviced Provinces Offer Table description
    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.
    Same day cash up to $1,500 for car payments, rent, mortgage, home & appliance repair, and more. 24/7 instant approval and e-Transfer funding. Income of at least $800/month required.
    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, NT, ON, SK, YT
    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, MB, NL, NS, ON, SK
    Apply for your first $300 payday loan at a $20 cost (excludes SK applicants).
    Instant decision and e-Transfer funding. Income of at least $1,000/month required.
    loading
    Maximum borrowing costs of payday loans per province
    Always refer to your contract for exact repayment amounts and costs.
    Province Max. cost of borrowing a $100 payday loan Cooling off period to cancel loan Max. penalty for returned cheque or pre-authorized debit
    Alberta $15 2 business days $25
    British Columbia $15 2 business days $20
    Manitoba $17 48 hours excluding Sundays and holidays $20
    New Brunswick $15 48 hours excluding Sundays and holidays $20
    Newfoundland and Labrador $14 2 business days $20
    Nova Scotia $17 Next business day (2 days for online loans) $40 (default penalty)
    Ontario $15 2 business days $25
    Prince Edward Island $15 2 business days N/A
    Quebec Limit of 35% AIR N/A N/A
    Saskatchewan $17 Next business day $25

    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

    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 your most realistic option because they have more lenient requirements than banks and credit unions. Many will work with borrowers who have less-than-perfect credit. The turnaround time is often 1 to 2 business days for an unsecured personal loan and as little as 1 hour for a payday loan. But these benefits come with 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 to a direct 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.

    What can I use bad credit loans in Canada for?

    Unless you specifically apply for a bad credit loan to consolidate debt, 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 money into your account, and you can use the cash as needed.

    Bad credit loans in Canada are most often used for:

    • Financial emergencies
    • Paying for monthly bills
    • Funding a major purchase
    • Rebuilding your credit

    Keep an eye on the interest rates of bad credit loans

    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 could 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 get the loan. Looking at the APR is helpful because it gives you a truer view of the cost of the loan.

    6 tips to find the best bad credit loan for you

    With many bad credit loans on the market, here are tips to find the best and help you get approved:

    1. Steer clear of predatory lenders. Avoid lenders that promise to approve you no matter what. Legitimate lenders will first review your finances before approving.
    2. Don’t rush. Don’t sign anything without understanding the terms of your loan, such as how much it’ll cost you overall, how long it’ll take you to repay it and any extra fees you might encounter.
    3. Watch out for long loan terms. The longer the loan term, the more interest you’ll pay on a personal loan. Aim to get the shortest loan term possible with payments you can still manage.
    4. Get a secured loan. You’ll increase your chances of approval if you offer collateral. Just be careful: defaulting on a secured loan means losing whatever asset you put on the line.
    5. Find a cosigner. Having a friend or family member cosign a loan will 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.
    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.

    Other types of bad credit loans in Canada

    The bad credit loans below are less common than unsecured personal loans and payday loans, but you may encounter them in your search as well.

    Type of bad credit loanHow it worksInterest rateLoan amountLoan term
    Home equity loanBorrow using your house as collateral and repay in installments.10% to 29% APR$5,000 to $50,00060 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$$1,000 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

    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 - 0 of 0
    Name Product Ratings APR Range Loan Amount Loan Term Requirements
    No items match the given criteria.
    loading

    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

    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 - 3 of 3
    Name Product APR Range Loan Amount Loan Term Requirements
    getloanapproved.com Vehicle Title Loan
    9.95% - 29.00%
    $1,000 - $50,000
    48 - 72 months
    Requirements: Vehicle must be 10 years old or newer, and must not be financed or leased.
    Keep your vehicle and get a loan within as little as an hour. No credit check and no employment requirements.
    Loans Canada Vehicle Title Loan
    6.99% - 29.99%
    $500 - $35,000
    4 - 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.
    LoanConnect Vehicle Title Loan
    8.99% - 46.96%
    $100 - $50,000
    3 - 120 months
    Requirements: min. credit score 300
    Fill out one application with this broker and get pre-approved by different lenders in 5 minutes.
    loading

    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

    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 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.

    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

    Summary of information you’ll need to provide lenders

    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

        Read more on this topic

        Go to site