Comparing the best personal loans for your unique financial situation can be an arduous process, especially if you have bad credit. This is why we’ve compiled a list of some of the best personal loans in Canada to help you get started. Find out which providers offer personal loans, and learn how you can compare different types of lenders to find the best deal.
Three best personal loans*
Best for low interest rates: LoanConnect Personal Loan
43% (British Columbia and Ontario) and 34.90% (Quebec)
Interest Rate Type
Min. Credit Score
Minimum Loan Term
Maximum Loan Term
Cater to bad/no credit borrowers
Less stringent eligibility criteria
Low maximum borrowing amount
How we selected the best personal loans
*We’ve chosen the products on this page based on the providers available through Finder. These loans are not representative of the entire market. When choosing the best personal loans, we considered each lender’s rates, fees, terms, borrowing amounts, funding speed and borrower perks.
No single personal loan will be the best choice for everyone, so compare your options before applying.
Personal loans are designed to let you borrow a fixed amount of money to cover personal expenses and unexpected costs. With many lenders, you can fill out an application online to request financing. Once you’re approved, you have to agree to make regular payments to pay back the money you borrowed over a set period of time.
Most lenders will give you the loan as cash or deposit the funds into your bank account using direct deposit or Interac e-Transfer. They will also collect your banking information so they can take repayments directly out of your account each month. Your repayment amount will include any money you borrow plus interest and applicable fees.
What’s the best personal loan for me?
There are several types of personal loans for you to choose from, each with its own unique set of features. You can compare loan types below to find the best personal loan for you:
Secured vs unsecured loans
Unsecured loans. These loans rely on your credit score to determine if you’re eligible for financing. If you fail to repay them then your credit score will suffer.
Secured loans. Secured loans allow you to borrow money by putting up collateral such as your home or vehicle to secure your loan. If you fail to repay them then that collateral can be taken as payment.
Fixed rate vs variable loans
Fixed rate loans. These loans include a fixed interest rate and consistent monthly repayment amounts for the lifetime of your loan. This means that the amount you pay back each month never changes so that you can budget ahead.
Variable rate loans. Variable rate loans rise and fall with the prime rate that’s set by the Bank of Canada. This causes your monthly payments and interest costs to fluctuate from month to month.
Installment vs payday loans
Installment loans. These loans are repaid in monthly installments over a set period of time. They are often for higher amounts and come with medium to high interest rates depending on your credit score.
Payday loans. Payday loans are unsecured loans that get repaid by your next payday rather than in regular installments. They tend to be for small amounts and most come with exorbitant interest rates.
Individual vs cosigned loans
Individual loans. Individual loans are loans that are secured by your credit score alone. You are individually responsible for their repayment and they damage your credit if you fail to repay them.
Cosigned loans. These loans are taken out by you and guaranteed by another individual with a solid credit score. The person who cosigns must accept responsibility for repaying your loan if you default on your payments (and their credit score suffers when repayments aren’t made on time).
Which providers offer the best personal loans in Canada?
Bank loans are provided by Canada’s Big Five Banks and other major financial institutions. They often come with higher interest rates than private personal loans, and have strict repayment requirements. It’s usually very difficult to qualify for these loans if you have bad credit.
Credit union loans are personal loans that are a little bit more flexible than big bank loans. You’ll usually need to apply to be a member of the credit union to get a personal loan. These loans typically have more competitive interest rates than big bank loans and some private lenders, and bad credit is often accepted.
Private loans are usually offered by online and alternative providers. These loans tend to come with better interest rates when you deal with a reputable provider. They also offer flexible repayment terms and it’s easier to qualify with bad credit. That said, there are many predatory lenders that operate online so it can be more risky to borrow from private lenders.
Anyone who has a regular source of income and a bank account in Canada may be able to qualify for a personal loan in Canada. Most lenders will also run a credit check when you apply for a personal loan to assess your creditworthiness.
If you have bad credit, you may still be able to qualify though you might need to secure your loan with collateral or enlist a co-signer to secure your payments. You may also need to pursue a secured or guaranteed loan if you already have a high debt-to-income ratio.
What are the eligibility requirements for a personal loan?
You will usually need to meet the following requirements to apply for a personal loan:
Be 18 years old or the age of majority in your province or territory.
Be a Canadian citizen or a permanent resident with a valid Canadian address.
Have a working bank account (this is sometimes not a requirement – it varies between lenders).
Have proof of regular income and ongoing employment.
Some lenders may have additional criteria that you’ll need to meet in order to apply for a loan.
Comparing lenders to find the best personal loan
If you’ve looked at the criteria and think you’re ready to compare the best personal loans for your unique financial situation, you should look at a couple of factors to find the best fit:
Interest rates. Interest rates are the most important factor to consider when taking out a personal loan. Your best bet is to look for the shortest term with the lowest rates to save money in the long run.
Fees. Fees can add unnecessary costs to your loan. You should aim to 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.
Term. The term on your loan defines how long it will last for (or how long you’ll be required to make repayments). It helps to look for the shortest loan possible with payments that you can still afford.
Repayment conditions. Your repayment conditions determine how you’ll repay your loan. Aim for a lender that will work with you to renegotiate repayment if your financial situation takes a turn for the worse.
Customer service. The lender you go with can give you either a good or bad experience with taking out a personal loan. Find a lender that has good customer ratings and a solid reputation for dealing with customer complaints to get the best results.
How to apply for the best personal loan
You can follow these steps for apply for the best personal loan for your unique situation:
Compare personal loans. Compare loans from a number of providers to find the best personal loan for your unique set of needs and budget.
Contact lenders directly. You may want to contact the provider you’re interested in to get more information about loan terms and interest rates.
Apply for the loan of your choice. You can apply for the best personal loan for you 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.
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 (or search for a bad credit loan if your credit score isn’t in the best shape).
Review final details. 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 or call in to your personal loan provider directly to apply over the phone.
Benefits of personal loans
There are many benefits to consider before choosing the best personal loan for your budget and lifestyle. The following features set personal loans above other forms of financing:
Quick financing. Get the funds you need to cover your daily or unexpected expenses in an emergency.
Affordable payments. Pay less in interest than you might have to with a credit card or short-term loan (unless you have bad credit).
Large amounts. Qualify for larger amounts of credit than you might be able to with a credit card, payday loan or line of credit.
Longer terms. Pay your loan off with consistent repayments over a longer term to make sure you stay within your allotted budget.
Multiple lenders. Compare personal loans from a number of different lenders to find the best terms and rates for your unique personal situation.
Bad credit can qualify. You may still be able to qualify with bad credit if you’re willing to accept higher interest rates, secure your loan with assets or enlist a co-signer.
What to watch out for with personal loans
There are also a couple of drawbacks to consider before you sign up for a personal loan, as it may not be the best fit for you:
High interest rates. You may end up paying high interest rates on your personal loan if you have bad credit or you borrow from a predatory lender.
Origination fees. Private lenders may charge an administrative fee to process your loan, which can sit anywhere between 1% and 5% of the total amount you borrow.
Prepayment penalties. You could be required to pay a fee if you pay your loan off early when you borrow from certain lenders.
Large debt load. You may end up not being able to pay back the money you owe if you lose your job or run into unexpected costs that derail your budget.
Damage to credit score. If you don’t make payments on time, your credit score will take a big hit – which could affect your ability to borrow in the future.
Other borrowing options
If you’re struggling to qualify for a personal loan, you may want to consider other suitable forms of credit. These include the following:
Peer-to-peer loans.Peer-to-peer loans offer lower rates, more flexibility, quicker turnaround and fewer fees than many traditional banks.
Business loans. Business loans can be a good low-interest option if you’re taking out money to fund business expenses.
Line of credit. If you need ongoing access to credit that you can pay back on your own terms then you may want to consider a line of credit.
Credit card. You may want to think about taking out a credit card to pay for small purchases since this will let you earn rewards and enjoy special card privileges.
Borrowing from friends or family. If you can pay your loan back quickly, you could ask your family or friends to give you an interest-free loan.
Personal loans are a quick and affordable way to get access to financing, especially if you have good credit. There are many different types of loans and the best personal loan for you will depend on various factors. These can include how much you want to borrow, the interest rates you’re willing to pay and how long you want to take to pay back your loan.
Frequently asked questions
You can find the best personal loan for you by comparing multiple lenders to find the best deal. From there, most providers will let you apply for your loan online. You can also call in to many lenders to speak to an agent over the phone. If you’re applying for a loan with a bank or credit union, you may also be able to go into a branch to deal with your loan application in person.
Your credit score is in an important factor that providers look at to determine your eligibility for a loan. If you have a bad credit score, it can be more difficult to qualify for a loan or you could end up paying much higher interest rates than someone with good credit. That’s why it’s important to compare the best personal loans for your unique financial situation.
A good credit score is usually any score that sits at 660 or above. Any score that falls below this number isn’t necessarily bad but it may cause you to have more difficulty getting approved for a personal loan. You can easily apply for your credit score with reputable credit bureaus such as Equifax or TransUnion.
That depends on your credit score, your debt-to-income ratio and a number of other factors. If you have an excellent credit score and very little debt, an interest rate that’s only a few points over the prime rate would typically be considered good.
If you have bad credit, an interest rate anywhere between 10% and 20% might be considered decent. Your best bet is to compare the best personal loans for your unique situation.
Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1,000 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
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