If you have bad credit, you may be thinking that personal loans are out of reach. This may be the case if you’re only applying to banks or credit unions, which typically have strict eligibility requirements, but if you apply to alternative lenders, it’s possible to get approved. Many alternative lenders offer personal loans to people with bad credit in Canada. You won’t even have to step outside your home because they offer online processes from start to finish.
The catch? Be prepared to pay more interest. Lenders of bad credit loans charge high interest rates to offset the high risk of borrowers defaulting.
If you’re ready for financing, this guide covers some of the best bad credit personal loans in Canada.
To get the best loan, choose a lender with the right combination of loan amount, loan term and interest rate that suits your financial situation. Your bad credit loan should give you manageable repayments that will allow you to pay off the loan successfully. Lenders vary widely in what they can offer, so compare your options before signing on the dotted line.
To find the best bad credit loans in Canada, Finder experts collected more than 70 points of data for more than 60 lenders operating in Canada. Finder used this data to create a proprietary weighting formula that scores each lender based on rates, fees, terms, loan amounts, application process, funding speed, customer support, and reputation, among other features. The providers shown on the best list are those who scored highest based on this data-driven methodology. They are providers that are available and not available through Finder, with partners listed first. These loans are not representative of the entire market. Read more about the Finder personal loan ratings and review methodology.
464+
hours invested
112
lenders vetted
4,608
data points analyzed
$500 – $60,000
Loan Amount
8.99% – 46.96%
APR
3 - 120 months
Term
LoanConnect maintains a large database of lenders and matches you with bad credit loan offers based on your unique profile. Fill out one application to get matched with multiple lenders.
Save time. Your application will be cast wide and you'll get your results right after you apply.
Easily compare offers. Compare offers from multiple lenders and log in regularly to see if new offers are available.
Choose between secured and unsecured loans. Find a secured bad credit loan if you have an eligible asset or get a loan with no collateral.
If your credit score is not the best, no problem. LoanConnect accepts bad credit and doesn't require a credit check for pre-approvals, though some lenders you match with may require it. Its large database of lenders also gives you more chances to get matched with a lender.
| Loan amount | $500 – $60,000 |
|---|---|
| APR | 8.99% – 46.96% |
| Term | 3 - 120 months |
| Min. credit score | 300 |
| Fees | No application, origination or brokerage fees |
| Turnaround time | Receive funds in as little as 24 hours. |
| Serviced provinces | All provinces |
$500 – $35,000
Loan Amount
9.99% – 46.96%
APR
9 - 84 months
Term
Spring Financial offers fast bad credit personal loans online. If you don't qualify for an installment loan, however, it'll offer you its credit builder loan The Foundation. With this loan, you won't access the loan funds until after you've made all your payments on time, which include interest.
Get a loan from an established lender. Spring Financial has been providing installment loans since 2015 and has over 200 employees with headquarters in Vancouver, BC.
Improve your credit score. Spring Financial reports payments to the credit bureaus so you can increase your credit score.
Get quick funding. You can get your bad credit loan as soon as today.
Spring Financial has pretty flexible requirements, with a low minimum credit score of 550 and a low minimum income of $2,000/month. Its credit builder loan The Foundation is easier to qualify for than its regular personal loan, but make sure it's the right product for your current situation before signing up.
| Loan amount | $500 – $35,000 |
|---|---|
| APR | 9.99% – 46.96% |
| Term | 9 - 84 months |
| Min. credit score | 550 |
| Fees | No fees except $30 NSF fee |
| Turnaround time | Within 24 hours |
| Serviced provinces | All of Canada |
$300 – $50,000
Loan Amount
6.99% – 46.96%
APR
3 - 60 months
Term
Loans Canada is an online loan search platform partnered with over 60 lenders. Fill out one application and get your matches for free.
Work with a Finder Award finalist. Loans Canada earned the Finalist award in the Best Personal Loan Search Platform category in the Finder: Personal Loans Customer Satisfaction Awards 2023. Loans Canada scored 75.15% in the overall customer satisfaction score and secured a spot in Canada's Top 15 Best-Rated personal loan providers in 2023.
Search a large lender network. Find bad credit loans that best suit your financial situation.
Get approved. You'll only be shown bad credit loan offers that you have a real chance of getting.
If you have a bad credit score or low income, there's still a chance you'll find a lender willing to finance you given the size of Loans Canada's database. Having a large database of lenders increases your odds of getting approved for one or more loans.
| Loan amount | $300 – $50,000 |
|---|---|
| APR | 6.99% – 46.96% |
| Term | 3 - 60 months |
| Min. credit score | 300 |
| Fees | No application, origination or brokerage fees |
| Turnaround time | Receive funds in as little as 24 hours. |
| Serviced provinces | All of Canada |
$500 – $100,000
Loan Amount
9.99% – 46.96%
APR
9 - 120 months
Term
easyfinancial helps Canadians access financing when their credit scores are low and banks aren't an option. You can apply online for a quick process or visit a branch near you.
Get a quick quote. Apply in minutes with no commitment and it won't affect your credit score.
Work with a Finder Awards winner. easyfinancial was awarded the Winner award in the Best Personal Loan Alternative Lender category in the Finder: Personal Loans Best-in-Class Awards 2024.
Improve your credit score. According to easyfinancial, one in three customers graduate to prime rates after making regular, on-time repayments.
easyfinancial scored high in the Finder: Personal Loans Best-in-Class Awards 2024 because its loans offer plenty of flexibility. It's possible to get approved when your financial situation isn't the best, but be prepared to be offered a lower amount and higher rate. Increase your chances of approval and get a lower rate when you secure your loan with your house (but keep in mind you could lose your house if you default). Also increase your odds of approval if you apply with a co-applicant who has stronger finances than you.
| Loan amount | $500 – $100,000 |
|---|---|
| APR | 9.99% – 46.96% |
| Term | 9 - 120 months |
| Min. credit score | 300 |
| Fees | you may come across non-sufficient funds fees, late payment fees, missed payment fees or admin fees |
| Turnaround time | Approval within 30 minutes |
| Serviced provinces | all provinces |
$500 – $1,000
Loan Amount
28% – 32%
APR
3 - 12 months
Term
LoansLoans.ca is a broker that helps people find short-term installment loans. It doesn't do any credit checks and accepts many types of income as long as it's over $1,200. You may be required to pay a fee of up to $300 that will be added to your payments.
Avoid payday loans. LoansLoans.ca's bad credit installment loans have longer loan terms than payday loans, which means you can break up your repayments.
Qualify. LoansLoans is open to many types of income as long as they're recurring. And since it doesn't do credit checks, you can qualify with bad credit.
Work with an established broker. NCR Financial Services, the company that owns and operates LoansLoans.ca, has been around for over 15 years.
LoansLoans installment loans are typically easier to get than others on this list because you don't have to go through a credit check and you can only borrow up to $1,000. Small loans are easier to get approved for than big loans because they're less risky for the lender. And as long as you have a stable, recurring income paid directly into your bank account and you have no active payday loans or short-term loans, you have a chance to qualify.
| Loan amount | $500 – $1,000 |
|---|---|
| APR | 28% – 32% |
| Term | 3 - 12 months |
| Min. credit score | 300 |
| Fees | Late payment fee (2.66% per month), $45 NSF fee, broker fee |
| Turnaround time | Receive funds in less than 24 hours |
| Serviced provinces | All of Canada (except Manitoba) |
$500 – $35,000
Loan Amount
9.9% – 46.96%
APR
6 - 60 months
Term
Mogo is a Canadian fintech company that offers various financial products, including personal loans and lines of credit for low credit scores.
Get an instant decision. Get your free quote in three minutes without affecting your credit score.
Apply easily online. Set up an account within minutes and get approval and funding within one to two days.
Work with an established company. Mogo was founded in 2003 and is traded on the Toronto Stock Exchange.
A Mogo personal loan is harder to get than others on this list since it has a minimum credit score of 600. It also has a minimum full-time annual income of $35,000, which is stricter than others on this list. Finally, all your monthly debt payments must be less than 55% of your monthly income, which is actually more lenient than banks. If you meet these requirements, it's worth getting a quote from Mogo to get an idea of what rate you qualify for without affecting your credit score.
| Loan amount | $500 – $35,000 |
|---|---|
| APR | 9.9% – 46.96% |
| Term | 6 - 60 months |
| Min. credit score | 600 |
| Fees | Non-sufficient funds fee of $20 to $50 |
| Turnaround time | Within 24 hours |
| Serviced provinces | BC, AB, SK, MB, ON, NB, NS, PE, NL, YT, NT, NU |
$1,000 – $50,000
Loan Amount
9.95% – 29%
APR
12 - 72 months
Term
Get Loan Approved offers personal loans with your car as collateral, also known as a car title loan. You can continue to use your car as you pay off your loan. To qualify, your car must be less than 10 years old, in good condition and fully paid off. You could lose your car if you default, so make sure you can manage the loan payments.
Lenient. Get Loan Approved specializes in personal loans for people with damaged credit and with a car. It doesn't do any credit checks, and you don't need to be employed.
Apply easily. Apply online and then either drive to a Get Loan Approved agent near you or have an agent come to you for a car appraisal. The whole process can be completed within 24 to 48 hours.
Increase your chances of approval. Since you'll be reducing the risk for the lender with collateral, you'll have a higher chance of getting approved.
There's a solid chance of getting approved if your car meets the requirements of being fully paid off, in good condition and less than 10 years old. Get Loan Approved doesn't do any credit checks and doesn't have job requirements.
| Loan amount | $1,000 – $50,000 |
|---|---|
| APR | 9.95% – 29% |
| Term | 12 - 72 months |
| Turnaround time | In as little as one hour |
| Serviced provinces | AB, BC, MB, NB, NL, NS, ON, PEI, SK |
$1,000 – $15,000
Loan Amount
29.9% – 46.9%
APR
12 - 60 months
Term
Loanz is a direct lender of bad credit personal loans. Its application process is entirely online, so you won't ever need to do an in-person interview to borrow money.
Get funded fast. Apply to get instant approval and receive funds in as little as 15 minutes.
Improve your credit. Loanz will report every payment to the credit agencies to help boost your credit score.
Skip the documents. You won't need to send any paperwork if you choose instant bank verification.
Loanz has a minimum credit score of 570. It has a minimum monthly income of $1,200. Both are pretty standard for lenders offering bad credit personal loans. If you have extremely bad credit, Loanz is not the best option as it may redirect you to another lender who is more lenient, such as Money Mart.
| Loan amount | $1,000 – $15,000 |
|---|---|
| APR | 29.9% – 46.9% |
| Term | 12 - 60 months |
| Min. credit score | 570 |
| Fees | N/A |
| Turnaround time | 24 hours or less |
| Serviced provinces | All of Canada (excluding Quebec) |
$500 – $15,000
Loan Amount
18.9% – 46.9%
APR
6 - 60 months
Term
FlexMoney is an online-only lender offering fast bad credit personal loans in Canada.
Get an instant decision. FlexMoney's automated system enables it to give you a no-obligation quote within minutes.
Get your funds fast. Funds should reach your account on the same day or the next day.
Rebuild your credit. FlexMoney will report regular, on-time payments of your personal loan to the credit bureau.
FlexMoney has a minimum credit score of 500 and minimum monthly income of $2,000, which is pretty flexible. You're more likely to get approved though if your monthly debt payments don't exceed a percentage of your monthly income. For many traditional lenders, that's 40%. Alternative lenders like FlexMoney can accept a little higher than this.
| Loan amount | $500 – $15,000 |
|---|---|
| APR | 18.9% – 46.9% |
| Term | 6 - 60 months |
| Min. credit score | 500 |
| Fees | No application, origination or prepayment fees |
| Turnaround time | Receive funds within as little as 24 hours |
| Serviced provinces | Alberta, British Columbia, Newfoundland, Nova Scotia, Ontario, PEI, Saskatchewan and Yukon |
$1,500 – $20,000
Loan Amount
19.99% – 46.8%
APR
12 - 60 months
Term
Magical Credit specializes in online personal loans for people with bad credit and/or low income. It's been in business since 2014 with offices in Concord and North York, Ontario.
Get a fast loan. Apply online and validate your information with instant bank verification to get a fast loan decision (with funds sent within 24 hours).
Rebuild your credit. Magical Credit reports on-time payments to the credit bureaus to increase your credit score.
Use non-employment income to qualify. Magical Credit accepts many types of income, such as most government benefits, private pensions and maternity benefits.
Magical Credit specializes in providing installment loans to people with bad credit. You can get approved if your income is low or if you're on government benefits. However, Magical Credit does not approve everyone. If you have loans in collections or you're in a consumer proposal or bankruptcy, Magical Credit will not approve you. And while Magical Credit will not necessarily deny you a loan for having bad credit, it will still review your credit history to make sure you can afford new loan payments.
| Loan amount | $1,500 – $20,000 |
|---|---|
| APR | 19.99% – 46.8% |
| Term | 12 - 60 months |
| Min. credit score | 300 |
| Fees | A single administration fee of $194 |
| Turnaround time | Receive funds within as little as 24 hours |
| Serviced provinces | Canada-wide (excluding Manitoba, Saskatchewan and Quebec) |
$10,000 – $500,000
Loan Amount
10% – 22.99%
APR
Up to 60 months
Term
Alpine Credits offers personal loans using your home equity as collateral. Before applying for this loan, make sure you can afford the payments because if you default, your lender has the right to repossess your house. Also watch out for fees, such as title search fees and appraisal fees.
Work with an established lender. Alpine Credits has been around for over 50 years and is BBB accredited with an A+ rating.
Increase your chances of approval. Offering your house as collateral reduces the risk for the lender and boosts your chances of getting a loan.
Get approved fast. You should hear back in less than 24 hours.
Offering collateral increases your chances of approval, and a house is one of the most preferred types of collateral for lenders. Alpine Credits bases its approval on your home equity, which is your home's market value minus your remaining mortgage balance. Unlike banks, Alpine Credit places less importance on your credit score, so it's possible to get approved even if it's low.
| Loan amount | $10,000 – $500,000 |
|---|---|
| APR | 10% – 22.99% |
| Term | Up to 60 months |
| Min. credit score | 300 |
| Fees | 5.00% - 8.00% of the APR covers closing & admin fees |
| Turnaround time | 24 hours |
| Serviced provinces | AB, BC, ON, QC |
$500 – $15,000
Loan Amount
29.9% – 46.9%
APR
6 - 84 months
Term
Money Mart offers installment loans and payday loans to people with bad credit. It's been in business for over 40 years and is one of the largest alternative lenders in Canada.
Get your loan fast. Same-day funding is available, depending on the transfer method.
Apply online or in-store. Get your loan online or at one of Money Mart's 500+ store locations.
Get some leniency. Money Mart is less strict with its requirements than banks, credit unions and some alternative lenders. You can qualify with a chequing account and a regular source of income.
Money Mart is one of the easier lenders to get approved for on this list. Bad credit is okay, and you can qualify with a low income or non-employment income. However, watch out for high interest rates.
| Loan amount | $500 – $15,000 |
|---|---|
| APR | 29.9% – 46.9% |
| Term | 6 - 84 months |
| Min. credit score | 300 |
| Fees | None |
| Turnaround time | Less than 1 day |
| Serviced provinces | AB, BC, MB, NB, NS, NT, ON, PEI, SK, YT |
$100 – $50,000
Loan Amount
2.99% – 46.96%
APR
3 - 120 months
Term
Lend for All is a loan-matching company that uses an automated process to match people with various lenders and financial institutions. It is based in Toronto, Ontario, and has an A+ BBB rating.
Save time. It works with a network of lenders that offer quick approval for customers with bad credit.
Get fast pre-approvals. Lend for All provides quick pre-approvals within minutes by doing a soft check on your credit report.
Find a loan for various purposes. Lend for All will match you with offers based on your needs.
Lend for All is a loan search platform like Loans Canada and LoanConnect. This means you'll gain access to multiple lenders with just one application. If you don't qualify with one lender, you could with another.
| Loan amount | $100 – $50,000 |
|---|---|
| APR | 2.99% – 46.96% |
| Term | 3 - 120 months |
| Min. credit score | 300 |
| Fees | Varies by lender |
| Turnaround time | Varies |
| Serviced provinces | All provinces |
$500 – $850
Loan Amount
Starting at 22%
APR
90 - 120 days
Term
24Cash connects applicants to a short-term installment loan with no credit check. It is an alternative to payday loans. Expect a broker fee of up to $225 to be added to your payments (the exact amount is set at the broker's discretion).
Get fast approval. Apply with instant bank verification and get approved in as little as one hour.
Apply easily online. Fill out one quick form and provide your bank details to get approved. Get cash on the same day if you're approved before 2:30 PM EST.
Established online broker. The company is active online and has solid customer reviews on Google and Trustpilot.
Like LoansLoans, 24Cash specializes in short-term installment loans with no credit check. Since it requires no credit check, you can get approved with bad credit. 24Cash also limits its loan amounts to $500 to $850, which are easier to get approved for than larger loan amounts.
| Loan amount | $500 – $850 |
|---|---|
| APR | Starting at 22% |
| Term | 90 - 120 days |
| Fees | broker fee of up to $225 |
| Turnaround time | Within 24 hours |
| Serviced provinces | Canada-wide except Manitoba, Quebec and Saskatchewan |
$1,000 – $50,000
Loan Amount
14.9% – 46.7%
APR
24 - 120 months
Term
AAR Financial offers personal loans with large loan amounts and long loan terms. The company serves customers in MB, SK, AB, ON and BC.
Increase your odds of approval. AAR Financial claims to approve 99% of applications.
Get a secured or unsecured bad credit loan. Use your home to secure your loan and get a more competitive rate, or get an unsecured personal loan.
Work with an established lender. AAR Financial has been in business for over 15 years with headquarters in Winnipeg, Manitoba.
AAR Financial's claim of a 99% approval rate means people have a pretty good chance of qualifying. However, this doesn't guarantee that AAR Financial will approve your application no matter what. You'll need to present your two most recent pay stubs and the last 90 days of your bank statements. AAR Financial will use these to determine whether you have the income to repay its loan, and there is room in your monthly budget for new loan payments.
| Loan amount | $1,000 – $50,000 |
|---|---|
| APR | 14.9% – 46.7% |
| Term | 24 - 120 months |
| Fees | Fees may include insurance fees, administration fees and NSF/late payment fees. |
| Turnaround time | Within 24 hours |
| Serviced provinces | MB, SK, AB, ON and BC |
$100 – $7,000
Loan Amount
Up to 48.99%
APR
6 to 60 months
Term
Cashco offers unsecured bad credit loans called Flex Loans. Apply for a loan online or in one of its branches.
Get some flexibility. You can choose a payment schedule, loan amount and loan term that works best for you.
Rebuild credit. Cashco reports payments to the credit bureau, which will help improve your rating.
Finder Award finalist. Cashco Financial was the finalist in the Best Personal Loan Alternative Lender category in the Finder: Personal Loans Customer Satisfaction Awards 2023. Cashco scored 86.55% in the overall customer satisfaction score and secured a spot in Top 15 Most Recommended and the Top 15 Best-Rated lists.
Cashco offers long-term bad credit personal loans. Borrowers can take up to 60 months to repay a loan of up to $7,000. This combination of long loan terms and moderate loan amounts allows Cashco to offer low payments to Canadians who can only repay a little bit each month. So if you have bad credit but there is some room in your monthly budget for these payments, Cashco may be able to approve you. However, the longer the loan term, the more you'll pay in interest. Your loan could end up becoming very expensive when you combine a long loan term with a high interest rate.
| Loan amount | $100 – $7,000 |
|---|---|
| APR | Up to 48.99% |
| Term | 6 to 60 months |
| Fees | Up to 10% of your loan amount to set up your loan, NSF and late payment fees of $25. |
| Turnaround time | Within 24 hours |
| Serviced provinces | BC, AB, SK and ON |
$500 – $850
Loan Amount
Starting at 23%
APR
90 - 120 days
Term
Like LoansLoans and 24Cash, Credito is a broker that helps people with bad credit find a short-term installment loan. You won't need to go through a credit check to get approved, but expect to be charged interest plus a $225 broker fee (the exact amount is at the broker's discretion).
Qualify. Since Credito doesn't do credit checks and offers smaller loans, it may be easier to get a loan from them versus other alternative lenders.
Avoid payday loans. Credito's bad credit loans are an alternative to payday loans, allowing you multiple repayments and longer terms.
Get funded fast. You can get your money within 24 business hours.
It's easier to get than others on this list because Credito only approves lower amounts and doesn't do credit checks. You can only borrow $500 to $850, which are easier amounts to get approved for than loans in the thousands.
| Loan amount | $500 – $850 |
|---|---|
| APR | Starting at 23% |
| Term | 90 - 120 days |
| Fees | $225 brokerage fee (amount set at broker's discretion) |
| Turnaround time | within 24 hours |
| Serviced provinces | ON, PE, BC, AB, NB, NS, NL, NU, NT, YU |
About the Finder Awards| Loan provider | Interest rate | Loan amount | Loan term | Key features |
|---|---|---|---|---|
| LoanConnect | 8.99% - 46.96% | $500–$60,000 | 3 - 120 months | Loan search platform, pre-approval in 5 minutes |
| Spring Financial | 9.99% - 46.96% | $500–$35,000 | 9 - 84 months | Fast application, same-day funding |
| Loans Canada | 6.99% - 46.96% | $300–$50,000 | 3 - 60 months | Loan search platform, largest lender network |
| LoansLoans.ca | 28.00% - 32.00% + broker fee up to $300 | $500–$1,000 | 3 - 12 months | No credit check, funding in 24 hours |
| Mogo | 9.90% - 46.96% | $500–$35,000 | 6 - 60 months | Quotes in 3 minutes, flexible eligibility requirements |
| Get Loan Approved | 9.95% - 29.00% | $1,000–$50,000 | 12 - 72 months | Use your paid-off car as collateral (less than 10 years old), you can continue to use your car |
| Loanz | 29.90% - 46.90% | $1,000–$15,000 | 12 - 60 months | Instant decisions, funding in 15 minutes |
| FlexMoney | 18.90% - 46.90% | $500–$15,000 | 6 - 60 months | Instant decisions, same-day funding |
| Magical Credit | 19.99% - 46.80% | $1,500–$20,000 | 12 - 60 months | Approval in 1 day, low income or non-employment income are okay |
| easyfinancial | 9.99% - 46.96% | $500–$100,000 | 9 - 120 months | Approval in 30 minutes, flexible eligibility requirements |
| Alpine Credits | 10.00% - 22.99% | $10,000– | Up to 60 months | Your home as collateral |
| Money Mart | 29.90% - 46.90% | $500–$15,000 | 6 - 84 months | Instant decisions, offers personal and payday loans |
| Lend for All | From 2.99% | $100–$50,000 | 3 - 120 months | Search platform for loans, secured and unsecured loans |
| 24Cash | 22.00% + broker fee | $500–$850 | 90 - 120 days | Broker, short-term loan, no credit check |
| AAR Financial | 14.90% - 46.70% | $1,000–$50,000 | 24 - 120 months | Secured and unsecured loans, high approval rate |
| Cashco | Up to 48.99% | $100–$7,000 | 6 to 60 months | Flexible repayment terms, unsecured loans |
| Credito | 23% + broker fee | $500–$850 | 90 - 120 days | No credit check, funding in 24 hours, short-term installment loans |
“Prudent Financial offers secured personal loans to people with bad credit. You can use your house or car to boost your chances of approval. Prudent won the Best Personal Loan Alternative Lender award in our Personal Loans Customer Satisfaction Awards 2023, where we asked customers for their honest feedback on lenders. Customers have complimented Prudent on its friendly service. We think this lender is a worthwhile option for those with poor credit and eligible collateral, but watch out for high interest rates and fees, and apply elsewhere if you don’t live in Ontario.”
Leanne Escobal, Publisher, Loans and Money Transfers
If you can’t find a bad credit personal loan for your needs, there are other online options to consider.
| Loan | How it works | How it compares to bad credit personal loans | |
|---|---|---|---|
| Payday loan | Borrow up to $1,500 and repay by your next day | Faster, easier to qualify, much more expensive | Learn more |
| Pay advance app | Borrow up to $350 and repay by your next payday | Smaller loan amounts, often no credit check required, pay a fee for express service | Learn more |
| Line of credit | Borrow up to a limit, pay the interest and repay the balance any time | Can be harder to qualify for, open loan term requires discipline in repayments and spending | Learn more |
| Cash-secured credit card | Works like a standard credit card, but you’ll pay a cash deposit for collateral | Lower rates, cash collateral required | Learn more |
Before you proceed with any application, check the lender’s eligibility criteria to save time and effort. Here are the basic eligibility requirements you may come across for personal loans:
Not all bad credit lenders are the same. Consider the following as you compare the best bad credit loans in Canada.
In 2024 the federal government plans to lower the maximum personal loan rate allowed in Canada from 47% APR to 35% APR to make loans more affordable for Canadians. This is particularly relevant if you have bad credit because applicants with the riskiest profiles are charged the highest rates. Lowering the maximum rate allowed means you could save on interest. However, according to experts in non-prime lending, this drop will also cause lenders to be more selective with their approvals, which means fewer people with bad credit will be able to get a personal loan.
Once the maximum rate is lowered, this year and the following years will help the government and participants of the lending market to evaluate whether 47% APR was the appropriate rate charged because of the actual credit risk of the borrower or whether it was the rate charged because it was the maximum that was allowed. We’ll be keeping an eye on this.
The cost of your bad credit personal loan will depend on the loan amount, loan term and interest rate. To illustrate, let’s assume you get a $5,000 loan over 3 years. Here’s how the overall cost breaks down with a 35% APR vs 47% APR:
| Feature | 35% APR | 47% APR |
|---|---|---|
| Loan amount | $5,000 | $5,000 |
| Loan term | 3 years | 3 years |
| Monthly payment | $226.18 | $261.39 |
| Total cost | $8,142.49 ($3,142.49 interest) | $9,410.07 ($4,410.07 interest) |
The savings difference between 35% APR and 47% APR is $1,267.58.
Yes. If you have poor credit and no guarantor, you can still get a loan. Many alternative lenders specialize in secured or unsecured bad credit loans in Canada with no guarantor needed, and it’s possible to get them as soon as the same day. But be prepared to pay more in interest and to get approved for lower loan amounts.
The lenders included in our list (above) do not require a guarantor to be approved for a bad credit loan.
We asked Trust Science, a Canadian company specializing in AI tech that helps lenders assess an application, to share their insights into what would help someone with bad credit get approved for a loan. Here’s what they had to say:
As a general rule, demonstrating consistent income to your account from stable employment sources is a benefit, as are regular outflows that can be identified as regular bill payments. Similarly, debts that you may have taken on that are not reported to the bureau may arise in your historical banking data: showing that you consistently repaid these debts can work in your favour. Having savings available, or having more cash inflows than outflows is always a good sign.
Recent data from the Finder: Consumer Sentiment Survey Q2, shows that 20% of respondents plan to take out a personal loan in the next three months.
The vast majority of respondents plan to borrow less than $15,000, with only 11% of respondents looking to borrow between $15,000 and $20,000 and 8% planning to borrow more than $20,000, in the next three months.
If you have bad credit, you can still apply and get approved for the best bad credit loans in Canada. But watch out for steep interest rates, and only apply to lenders you trust. If you’d like to learn more about how personal loans work, read our guide to personal loans.
The results of the Finder: Consumer Sentiment Survey Q2 were collected through an online Pollfish survey conducted between April 27 and April 29, 2023. In the survey, 1,011 Canadians from across the country were asked about their past use and current plans to use personal loans and other forms of credit. The estimated margin of error for the survey is +/- 3%, 19 out of 20 times.
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