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Lines of credit

Enjoy easy access to additional funds whenever you need them with a line of credit.

Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
Cash Money Line of Credit
46.93%
$100 (in store), $500 (online) - $10,000
6 - 60 months
No min. income or employment requirements
Min. credit score: 560
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Cash Money offers line of credit loans up to $10,000 for AB, BC, NS, ON and SK residents. (Residents of MB or NB can apply in-store only.)
LendDirect Line of Credit
19.99% - 46.93%
$100 - $15,000
No end dates
Min. income of $1,500 /month
Min. credit score: 560
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Borrow up to $15,000, based on your income and credit history, with a line of credit from LendDirect.
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A line of credit can provide you with an ongoing and convenient way to withdraw funds whenever you need to. You can use the funds to make purchases or keep it accessible if you need it in the case of an emergency.

The flexibility of a line of credit allows you to withdraw funds up to a pre-determined limit. Line of credit interest rates are typically only charged on what you actually borrow, not on the entire credit limit. Find out more about this method of borrowing and if it’s right for you in our guide below.

Compare more lenders who offer personal lines of credit

If you have good to excellent credit, below is a breakdown of lines of credit provided by major financial institutions in Canada, including credit limits, fees and line of credit interest rates.

ProviderMin/Max amountsFeesLine of credit types available (not counting home equity)APR range
ATB$5,000-$50,000No feeSecured or unsecuredVariable, based on ATB prime rate (2.45%)
BMO$5,000-$25,000Not listedSecured or unsecuredVariable, based on BMO prime rate (2.45%)
CIBC$5,000+Not listedSecured or unsecuredVariable, based on CIBC prime rate (2.45%)
DesjardinsBased on individual needsNo administration feesNot specifiedVariable, based on Desjardins prime rate (2.45%). As of April 8, 2021, 8.95% for $500-$4,999 and 8.45% for $5,000 to $25,000.
HSBCNot listedMonthly fee charged if you don’t meet stated eligibility criteriaNot specifiedVariable, based on HSBC prime rate (2.45%)
MeridianNot listedNot listedSecured or unsecuredVariable, based on prime. As of April 2021, 3.50% for a secured LOC. For an unsecured LOC, rate depends on your credit history and capacity to repay the loan.
National BankPersonal Flex Line: $5,000+

Integrated Line of Credit: $500-$5,000

Personal Flex Line: Not listed

Integrated Line of Credit: No management fees

Not specifiedPersonal Flex Line: Variable based on your credit history

Integrated Line of Credit: Prime rate (2.45%) + 7%. As of April 8, 2021, rate is 9.45%.

Scotiabank$5,000-$75,000No annual feeNot specifiedPrime rate (2.45%) + an adjustment factor
RBC$5,000+No annual feeSecured (your investments as collateral) or unsecuredVariable, based on RBC prime rate (2.45%)
TD$5,000 – $50,000No feeSecured (your investments as collateral) or unsecuredSecured: Variable, based on prime rate (2.45%)
Unsecured: Variable, based on prime rate (2.45%) or fixed, based on personal factors

The above line of credit product details were last verified April 2021.

How does a personal line of credit work?

A personal line of credit works similar to a credit card, giving you a specified credit limit to use how you like. The main difference is the limit is usually higher, while the rates are typically lower than credit cards. You can access any amount up to your credit limit, and once you pay it back, you can re-access the money.

You won’t need to submit a credit application every time you need to make a withdrawal from your line of credit — once you’re approved, the funds are there for you to use whenever you need them. Interest is usually only charged on the funds you actually withdraw. You can even get some lines of credit that are linked to a debit card, giving you more flexibility.

Secured vs. unsecured lines of credit

When you open a line of credit, you’ll need to choose between one of two options:

  • Secured line of credit.If you want to borrow a larger sum of money, some lenders require you to back your line of credit with collateral, typically a savings account, property or Guaranteed Investment Certificate (GIC). This often results in a lower interest rate since it poses less risk to the lender. The lender can take possession of the collateral if you aren’t able to pay back your line.
  • Unsecured line of credit.Like unsecured personal loans, you don’t need any collateral to back an unsecured line of credit. While these typically come with higher interest rates, you don’t risk losing any property or savings if you’re unable to repay what you borrow and the approval process is quicker.

How is a line of credit different from a personal loan?

Some of the main differences are how they’re typically used and how they’re repaid:

Personal loanLine of credit
Often used for a big, one-time purchaseOften used for ongoing purchases
Repaid over a fixed term, usually between 1 and 7 yearsDoesn’t come with a set repayment period
Received as one lump sumFunds are available and accessed as needed

Compare personal loans vs. lines of credit

How is a line of credit different from a credit card?

One main difference is interest rates. Line of credit interest rates in Canada are typically lower than the interest rate on a credit card. For example, CIBC’s Select Visa Credit Card, which is advertised as a low interest card, has an interest rate of 13.99% as of April 2021. National Bank’s Integrated Line of Credit has a rate of 9.45% as of April 8, 2021.

Another main difference is how they’re used. A credit card is typically used for small everyday expenses, while a line of credit is typically used for big expenses such as major home renovations or emergencies.

Line of credit vs credit card

What can I use a line of credit for?

Generally, lines of credit are great in two situations: When you can’t predict the cost of something and when you need access to cold, hard cash at the click of a button.

  • Rainy day fund. Don’t have savings? A line of credit can give you quick access to money if you have an unexpected expense that is difficult to pay for with a credit card.
  • Home improvements. You can’t usually pay a contractor with a credit card and it can be hard to predict how much a home improvement project will cost down to the last dollar. A line of credit can keep you prepared.
  • Large ongoing projects. Since lines of credit can have higher limits than credit cards, it can be a more flexible choice. In addition, the interest rates are cheaper, keeping your costs lower.

How much can I borrow?

Most lenders offer lines of credit from $5,000 and up. However, the exact amount you qualify for will vary depending on your personal finances, credit profile, the kind of line of credit (secured vs. unsecured) and the lender you choose. Your history with the lender may also impact how much you’re able to borrow.

Once your credit limit is approved — the maximum amount that you’re able to borrow overall — you can start drawing from your line.

How to compare your borrowing options

Whether you’re considering a line of credit or a personal loan, it’s important to compare your options to get the best one for you. Here are some features to keep in mind when comparing personal loans and lines of credit:

  • Interest rate. In addition to comparing the interest rates, it’s important to know how the rates are applied. For lines of credit, check that the interest is being applied only to the funds you actually withdraw, not on your total balance. For personal loans, keep in mind that in some cases you may have the option of securing the loan against an asset which could result in a lower interest rate.
  • Fees. Compare fees carefully as they aren’t always set out as clearly as the interest rate. While lines of credit and personal loans may advertise no annual fee, there could be monthly fees or an establishment fee.
  • Loan terms. Many lines of credit and personal loans are repaid through monthly repayments. Be sure that the due dates fit your budget. If you’re applying for a personal loan, note there are different term lengths as well. Ideally, you will be able to pay off your line of credit whenever you’re able to without incurring any additional charges.
  • How accessible your funds are. Consider how you will access your funds. Personal loans are typically deposited into your bank account in one lump sum, usually within a few days to a few weeks of applying. With lines of credit, you can withdraw funds as you need, but there may be a delay between the withdrawal date and when the funds appear in your account.

How can I apply for a personal line of credit?

You can apply for a personal line of credit online, by phone or in person. The exact application process will vary by lender, but you’ll generally need to provide information about yourself and your finances. To qualify, you’ll typically need to have good credit, a low debt-to-income ratio and a regular source of income. Lenders will typically ask for a government-issued ID and bank statements, and some might require you to provide pay stubs or information about your employment.

When you’re ready to apply, you can compare lenders that offer lines of credit to learn more about their specific requirements.

What information will my lender ask for?

Eligibility criteria varies between lenders, but in general, you will need to provide the following information:

  • Proof of income.You’ll have to show proof of an ongoing steady income. Your pay stubs are usually acceptable or a bank statement which shows consistent deposits from an employer.
  • Existing debt.You may be asked to provide information on your current debts, including your mortgage or housing payments.
  • Identification.Most lenders will require government-issued ID to verify your identity.
  • Assets.Lenders typically use savings and investment accounts as collateral for high-dollar lines of credit.

How long does it take to get a personal line of credit?

It typically takes only a few minutes to complete an application for a personal line of credit. Processing times vary by lender: banks may take 1 to 2 weeks to reach a decision, while online lenders may have an answer for you in less than an hour.

If you’re approved, you may be able to start drawing from your line of credit immediately. Like the application process itself, the time it takes to receive your funds will vary.

How do repayments work?

Lines of credit can have two phases:

  1. Draw period.This is the period of time when you can draw from your credit line. Some lenders offer an open draw period with no term limit, allowing you to use the funds again without needing to reapply as long as you have paid any or all of your balance. If there is a term limit, you may be required to make minimum monthly payments that cover interest that’s accrued during a “grace period”, as well as pay an annual maintenance fee. You can choose to pay more than the minimum, but it won’t be necessary until the repayment period begins after the “grace period”.
  2. Repayment period.When the repayment period sets in, you can’t draw any more funds from your line of credit. It will convert how much you’ve borrowed to a term loan, and you’ll need to make regular monthly payments that cover both interest and the principal. The length of the repayment period will depend on the terms in your agreement with the lender.

What happens if I can’t repay my line of credit?

If you aren’t able to make a payment, reach out to your lender to discuss your options as soon as possible. You may be able to make small minimum payments toward your debt or get on an alternative payment schedule.

Defaulting on your line of credit will cause your credit score to take a hit and could lead to multiple fees. If you secured your credit line with collateral, your lender can confiscate those funds to cover your debt.

Can I pay off a personal line of credit early?

In most cases, you can make extra repayments during the draw period and pay your line of credit off early. Since many lines of credit are revolving, you may be able to borrow those funds again once you’ve repaid them.

When it comes to making extra repayments during the repayment period, your lender may charge a prepayment penalty or other fee to make up for lost interest but some lenders allow extra payments without any fees. Check your loan agreement for specific details.

Pros and cons of a line of credit

Pros

  • You’re only charged for what you use. In most cases, you will be charged interest only on the funds you actually borrow, as opposed to the total credit limit.
  • You have easy access to your funds. If your account is linked to a card, you may be able to draw the funds you need through ATMs. If not, you’ll typically have easy access to your line of credit via your online banking.
  • There are flexible terms. You can use the funds how and whenever you need to, making for a very flexible financing solution. In addition, you can withdraw however much you’d like (up to your credit limit).

Cons

  • Fees and charges. Be mindful that fees and charges will likely apply, such as an annual fee or a monthly service fee.
  • Interest rates. If interest rates go up, you may face difficulty paying back your line of credit.

What are the risks associated with lines of credit?

  • Overspending. For those who are easily tempted, the thought of a seemingly unlimited amount of funds may cause them to make purchases that are unnecessary.
  • Extra fees. Be sure to read the terms and conditions carefully for any extra fees that may not have been clear on your application.

    Alternatives to a personal line of credit

    If you’re on the fence about whether a personal line of credit is right for you, there are a few similar options you might want to consider instead:

    • Home Equity Line of Credits (HELOCs). Because home equity line of credits are secured by your property, you can typically borrow much more than with a personal line of credit. This can be useful for large projects or expenses like home renovations and college expenses.
    • Credit cards. Credit cards have higher interest rates, but they’re much more accessible than lines of credit. And with a wide variety of options out there, a credit card can help cover smaller expenses as they crop up.
    • Personal loans. Personal loans are best if you need to cover a large one-time expense or purchase. You’ll receive your funds as a lump sum and pay it back plus interest with monthly repayments over the agreed repayment period. You can compare personal loan options below.

    Compare personal loans

    Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
    LoanConnect Personal Loan
    Secured from 1.90%, Unsecured from 9.90%-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.
    ConsumerCapital Personal Loan
    19.99% - 32.99%
    $1,500 - $12,500
    24 - 60 months
    Min. income of $1,900 /month, 6+ months employed
    Min. credit score: 540
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    More Info
    An online lender that provides fast unsecured personal loans. Complete an application in less than 10 minutes and get a decision within 24 hours.
    Spring Financial Personal Loan
    17.99% - 46.96%
    $500 - $15,000
    9 - 48 months
    No min. income or employment requirements
    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.
    goPeer Personal Loan
    8.00% - 31.00%
    $1,000 - $25,000
    36 - 60 months
    Min. income of $15,000 /year
    Min. credit score: 600
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    Canada's first regulated consumer peer-to-peer lending platform offering unsecured loans. Connects creditworthy Canadians looking for a loan with Canadians looking to invest. goPeer strives to offer the most competitive interest rates. Apply in minutes and get a response within 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.
    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.
    Mogo Personal Loan
    5.90% - 46.96%
    $200 - $35,000
    6 - 60 months
    Min. income of $13,000 /year
    Min. credit score: 540


    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.
    Fairstone Personal Loan (Unsecured)
    26.99% - 39.99%
    $500 - $20,000
    6 - 60 months
    Able to make monthly repayments on your loan
    Min. credit score: 560
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    An online lender with a team dedicated to professional service. Get a quote for an unsecured loan without impacting your credit score. Receive funds within as little as 24 hours. No prepayment fees.
    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.
    Fairstone Personal Loan (Secured)
    19.99% - 23.99%
    $5,000 - $50,000
    36 - 120 months
    Must be a homeowner
    Min. credit score: 560
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    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.
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