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What credit score is needed for a personal loan?

Learn about what credit score you'll need for a personal loan and compare your options.

Your credit score is one of the most important factors in a personal loan application. Lenders often won’t consider you if you don’t meet their minimum credit score requirement. However, it’s only one of several factors they look at when determining your eligibility. Learn more below about what credit score is needed for a persona l loan in Canada.

What credit score do I need to get approved for a personal loan?

You’ll typically need a good or excellent credit score of above 660 to get approved for a personal loan from major financial institutions like banks and credit unions. Online lenders can approve loans even if you have fair credit between 560 and 659 or even bad credit below 560. Keep in mind that the minimum credit score cutoff will vary from lender to lender.

Compare personal loans for different credit scores

1 - 9 of 9
Name Product Min. Credit Score APR Range Loan Amount Loan Term Requirements
Spring Financial Personal Loan
550
10.8% - 46.99%
$500 - $35,000
6 - 60 months
Requirements: min. income $2,000/month, 3+ months employed, min. credit score 550
Loans Canada Personal Loan
300
6.99% - 46.96%
$300 - $50,000
3 - 60 months
Requirements: min. credit score 300
LoanConnect Personal Loan
300
8.99% - 46.96%
$500 - $60,000
3 - 120 months
Requirements: min. credit score 300
easyfinancial Personal Loan
300
9.99% - 46.96%
$500 - $100,000
9 - 120 months
Requirements: min. income $1,200/month
Mogo Personal Loan
600
9.90% - 46.96%
$500 - $35,000
6 - 60 months
Requirements: min. income $35,000/year, min. credit score 600
Fig Personal Loans
700
12.99% - 31.99%
$2,000 - $30,000
24 - 60 months
Requirements: min. income $5,000/month, 6+ months employed, min. credit score 700
Fat Cat Loans Personal Loan
300
4.84% - 35.99%
$300 - $50,000
3 - 84 months
Requirements: min. income $1,000/month, min. credit score 300
MDG Financial Installment Loan
560
29.78% - 44.80%
Up to $1,600
Up to 36 months
Requirements: no min. income, min. credit score 560
goPeer Personal Loan
600
8.99% - 34.99%
$1,000 - $35,000
36 or 60 months
Requirements: recommended income $35,000/year, min. credit score 600, min. 5-year credit history.
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What credit score do I need to get a good rate on a personal loan?

You would need to have excellent credit to get the lowest rates and largest loan amounts that a personal loan lender offers. However, you can often get a favourable deal even if your credit score is considered good.

Here is a breakdown of typical credit score ranges in Canada.

  • Excellent credit: 760 to 900
  • Very good credit: 725 to 759
  • Good credit: 660 to 724
  • Fair credit: 560 to 659
  • Poor credit: 300 to 559

700 Credit Score

What else is needed for personal loan?

Although credit score plays a key role in whether or not you’ll get approved for a personal loan and how high or low your interest rate will be, it is just one of several factors that lenders examine. For example, you could have a decent credit score, but if the level of your monthly debt payments relative to your monthly income is high, lenders may hesitate to approve you.

Below are some important factors that lenders look at.

  • Income. Many lenders have minimum income requirements. Generally, the larger the loan you’re applying for, the larger the income you’ll need to qualify.
  • Employment. Personal loan providers often require borrowers to have a full-time job. You might have trouble finding a loan if you’re self-employed or if you’re not working, though there are options for unemployment loans and self-employed personal loans.
  • Credit history. In addition to your credit score, many lenders look at the length of your credit history. If it’s still relatively new — say, less than three years old — you might have trouble qualifying.
  • Debt-to-income (DTI) ratio. Your DTI ratio compares your monthly bills to your monthly income and gives lenders an idea of how much money you can afford to repay each month.
  • Loan amount. The size of the loan matters. For example, if you have bad credit, lenders are more likely to approve you for a $5,000 personal loan than a $20,000 personal loan.
  • Collateral. Offering collateral such as your home reduces risk for the lender, because if you fail to make repayments, the lender can repossess your asset. Since you’re reducing risk, the lender can offer a lower rate.

How do I check my credit score?

Understanding what credit score is needed for a personal loan won’t help you know if you’re eligible unless you know your credit score. You can check your credit score using one of the following methods or services.

The score you receive is usually based on a soft credit inquiry, which doesn’t affect your credit rating but may not be as accurate as a hard credit pull. When lenders evaluate a loan application, they’ll do a hard pull on your credit, which will temporarily decrease your credit score.

  • Online services. Sites like Credit Verify (powered by TransUnion) allow anyone to check their credit score by filling out a quick online form with basic personal information like your name, birth date and address.
  • Budgeting apps. Many apps like Mint regularly check and update your credit score once you sign up.
  • Credit card or bank apps. If you have an app for your bank or credit card, you can often sign up to check your credit score and get alerts when it changes.
  • Account statements. Your credit score might appear on some statements for loans, checking accounts or other financial products.
  • Credit bureaus. You can also go directly to the source and check your credit score with the two major credit bureaus in Canada: TransUnion and Equifax.

Finder survey: Do Canadians of different ages know what their credit score is?

ResponseGen ZGen YGen XBaby Boomers
Yes61.92%66.29%57.6%49.61%
No38.08%33.71%42.4%50.39%
Source: Finder survey by Pollfish of 1001 Canadians, January 2024

How can I improve my credit rating before applying for a personal loan?

There are several steps you can take to potentially qualify for better rates by improving your credit score before you apply for a personal loan:

  • Check your credit report. You’re entitled to two free copies of your credit report each year — one from each bureau. Request a copy and make sure it’s accurate. Reach out to your creditors if you find any mistakes on your credit report.
  • Pay down your balances. Got a lot of credit card debt? Loans? Paying off some of your balances lowers your credit utilization ratio and can improve your credit score.
  • Take out a credit-builder loan. Some local banks, credit unions and other financial institutions offer inexpensive small-dollar loans designed to help you improve your credit and establish a rainy day fund. Learn more about credit-builder loans.

Can I get a personal loan with no credit score?

You can, though your options are much more limited. You might be able to qualify if you apply for the loan with a cosigner. Or consider borrowing from friends and family.

What can I use my personal loan for?

Lenders don’t usually put restrictions on how you can use your personal loan funds. That flexibility is one of the reasons why a personal loan is such an appealing financing option. That being said, some lenders may not be willing to lend you money for certain use cases.

Our research found that 41.3% of Canadians took out personal loans to buy a car, 19.5% to finance a mortgage, 15.8% to consolidate debt and 13.2% to finance home renovations. Here are some common ways people tend to use personal loans:

  • Home improvement
  • Dental bills
  • Vacation
  • Debt consolidation
  • Buying a car
  • Wedding
  • Pet care
  • Education
  • Boat or jet ski
  • Going green

Overall representative example
If you borrowed $20,000 over a 5-year term at 9.50% APR (variable), you would make 60 monthly payments of $420.04 and pay $25,202.23 overall, which includes interest of $5,202.23. The overall cost for comparison is 9.50% APR representative.

Bottom line

You can get a personal loan with almost any credit score — or even no credit score. But you have more options if you have good to excellent credit. If you aren’t in a rush, consider taking the time to improve your credit rating so you can get an even more favorable deal.

Want to know more about how it all works? Check out our guide to personal loans.

Frequently asked questions about credit scores for personal loans

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Editor

Anna Serio was a lead editor at Finder, specializing in consumer and business financing. A trusted lending expert and former certified commercial loan officer, Anna's written and edited more than 1,000 articles on Finder to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in publications like Business Insider, CNBC and Nasdaq, and has appeared on NBC and KADN. Anna holds an MA in Middle Eastern studies from the American University of Beirut and a BA in Creative Writing from Macaulay Honors College at Hunter College, CUNY. See full bio

Anna's expertise
Anna has written 63 Finder guides across topics including:
  • Personal, business, student and car loans
  • Building credit
  • Paying off debt
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Associate editor

Stacie Hurst is an editor at Finder, specializing in a wide range of topics including stock trading, money transfers, loans, banking products, online shopping and streaming. She has a Bachelor of Arts in Psychology and Writing, and she completed one year of law school in the United States before deciding to pursue a career in the publishing industry. When not working, Stacie can usually be found watching K-dramas or playing games with her friends and family. See full bio

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