Dive deeper: Loans Canada review
Canadian Lines of Credit for Bad Credit
Have bad credit but want the flexibility of a line of credit? Check out these lenders.
Several lenders in Canada can help you access a line of credit if you have bad credit. Rather than fixating on your credit score, they’ll assess your income, debts and spending activity. However, you may need to pay high interest rates and fees.
Keep reading to compare loan options for bad credit and learn about how to get quick approval.
Compare lines of credit for bad credit in Canada
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To make comparing even easier, we came up with the Finder Score. Interest rates, fees and features across 40+ personal loans are all weighted and scaled to produce a score out of 10. The higher the score the better the loan—simple.
Alternative: Cash advance apps with flexible repayments
Some cash advance apps, such as those below, provide withdrawal limits and flexible repayments, making them very similar to conventional lines of credit.
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Who should I choose if I have bad credit?
There’s no single best choice because it depends on your personal factors and needs. For example, if you’d like to make the approval as easy as possible, check out KOHO, since it doesn’t have job or income requirements and doesn’t require any credit checks. If you’d like to explore multiple options, check out Loans Canada, a loan search platform. It can match you with suitable lenders with just one application. If you’d like to lower your cost as much as possible, consider Nyble. It doesn’t charge any interest or mandatory fees.
Learn more about lines of credit for bad credit below.
1. Loans Canada
Loans Canada is a loan search platform with the largest network of lenders in Canada. It has been in business since 2012 and is based in Toronto, Ontario. Loans Canada is worth considering if you want to thoroughly search for options that best suit your situation.
Is this line of credit easy to get?
Loans Canada is not a direct lender but a platform that allows you to fill out one application and get matched with appropriate lenders.
This means you could be matched with lenders who offer lines of credit and/or those who offer other loan types, but you can be reasonably sure that your matches are open to giving you a loan based on your finances.
2. LoanConnect
Online loan search platform LoanConnect can help you find a line of credit through its network of lenders. It has been around since 2016, and its office is based in London, Ontario.
Is this line of credit easy to get?
By applying to LoanConnect, you get access to its database of 30+ lenders. You can apply online within minutes and get matched with suitable lenders, whether they offer lines of credit or other types of loans.
Dive deeper: LoanConnect review
3. Nyble
Nyble launched in 2022 in the Canadian loans marketplace, and its product is a bit different from a traditional line of credit. With a Nyble credit line, you’re approved to borrow up to a limit. However, you won’t be able to borrow more until you pay off what you previously borrowed.
You can repay your loan on your next payday or roll it over to the following months.
Is this line of credit easy to get?
Nyble is one of the easiest lines of credit to get approved for because it offers much smaller loan amounts than most other lenders. It also doesn’t do any credit checks and is flexible in the types of income it accepts. You can get instant approval and instant funding 24/7.
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Dive deeper: Nyble credit line review
4. KOHO Cover
KOHO offers a cash advance of up to $250. It’s not exactly a line of credit, but it’s very similar to one. You’re approved to borrow up to a limit, and you can repay the amount you borrow any time with no late penalties.
Is this cash advance easy to get?
KOHO Cover is one of the easiest cash advances to obtain, as it doesn’t require a credit check or proof of income. It advertises guaranteed approval for its cash advances. Generally, it’s best to steer clear of lenders that say this, but in KOHO’s case, it’s a legitimate, well-known lender that’s currently pursuing a Schedule 1 bank licence.
Dive deeper: KOHO Cover review
5. MogoMini
MogoMini is a line of credit offered by Vancouver-based fintech Mogo. You can apply online and get pre-approved in less than five minutes.
Is this line of credit easy to get?
This line of credit is easier to get than many other lines of credit in Canada because this product is intended to be a payday loan alternative for emergency funding. Mogo is open to financing borrowers with a credit score of at least 600. You can also apply if your income is more than $35,000/year.
While this line of credit may be easy to get, with such a high interest rate, it’s best to apply only if absolutely necessary, and ensure that you pay off the amount borrowed as quickly as possible.
Dive deeper: MogoMini review
6. Fora
Fora is a relatively new lender in Canada that launched in 2022. It offers an unsecured line of credit to suit borrowers who may not qualify with banks and credit unions.
You can apply online without needing to email or upload documents, but Fora requires view-only access to your bank statements before it can give approval.
When you need to access money from your line of credit, Fora can deposit it into your bank account as soon as the same business day.
Is this line of credit easy to get?
It’s easier to get than a line of credit from a financial institution. Fora can consider your income as long as it’s regularly paid into your bank account. This means you can qualify even if your income does not come from employment. This lender is also more lenient with credit scores.
To increase your chance of approval, you’ll need to show Fora that you are receiving enough income and that you have room in your finances for new line of credit payments.
Dive deeper: Fora line of credit review
7. Cash Money’s line of credit
Cash Money is more known for providing payday loans, but it also offers lines of credit. One of the biggest alternative lenders, it has been operating for decades and is headquartered in Toronto, Ontario.
You can apply for a loan and verify your income online, while in-store and phone applications are also accepted.
Is this line of credit easy to get?
This line of credit is easier to get than lines of credit from banks and sometimes even other alternative lenders. Cash Money is open to non-employment incomes and lower credit scores. Its line of credit interest rate is high, though, at 34.99%. It’s important to be financially disciplined and pay off your balance as soon as possible if you get this line of credit.
Dive deeper: Cash Money line of credit review
Key takeaways
- A line of credit allows you to borrow money up to a set limit and repay only the amount you use plus interest.
- Individuals with bad credit may face challenges obtaining a line of credit from traditional lenders due to stricter eligibility requirements.
- Private lenders offer options for borrowers with poor credit, but these often come with significantly higher interest rates and fees.
- To avoid further financial strain, it’s important to compare lenders, understand repayment terms and ensure a loan aligns with your financial capacity.
How do I get a line of credit with bad credit?
To get approved for a line of credit with bad credit, you can apply to alternative lenders. Many lenders operating online work with bad credit borrowers. You can apply through a lender directly or use an online loan search platform like Loans Canada or LoanConnect, which can match you with a lender that suits your needs.
Rather than focusing on your credit score, bad credit lenders will consider other factors when assessing your credit application, such as your income, existing debts and spending activity.
Can I get a guaranteed line of credit with bad credit?
Not really. Be wary of any lender that promises “guaranteed” approval. This is a common red flag that could indicate a personal loan scam, so the safest thing to do is steer clear. The one exception we’ve found is KOHO. KOHO is advertising guaranteed approval at the moment, and it’s a legit lender.
Can I get easy approval for a line of credit from a bank?
It’s not easy to get a line of credit from a bank unless you have a strong financial profile. To increase your chance of getting approved for a bank line of credit, you’ll need to meet the following:
- Have sufficient income (steady full-time employment preferred)
- Monthly debt payments are less than 40% of your monthly income
- Credit score over 700
Securing your line of credit with your home or investments will also help your application.
Which banks or credit unions are the easiest to get a line of credit from?
Overall, banks and credit unions have strict eligibility requirements, so your financial situation would need to be in a strong place. But here are lenders you can consider:
| Lender | Why it’s great |
|---|---|
| Innovation Federal Credit Union |
|
| FirstOntario Credit Union |
|
| Vancity Credit Union |
|
| Tangerine |
|
Should I get a line of credit if I have a low credit score?
A line of credit is a good idea only if you are financially disciplined. A line of credit is a flexible loan that allows you to access funds as you need them up to a limit. You can use a portion of your credit limit or the full amount—it’s up to you—and you can use the money for any purpose.
You’re only charged interest on the amount you borrow, not on the full credit limit. There are minimum payments you must make every month, but the main benefit of a line of credit is that you can pay off the amount you borrow whenever it’s best for you.
This is why a line of credit requires financial discipline. There is a risk of borrowing more than you need, and interest is calculated daily on the unpaid balance.
If you have bad credit, consider the steep interest rate, which can have a big impact on the total cost of borrowing. Also, if you miss payments, you could damage your credit score further (although you can make interest-only payments, which makes it more affordable).
Consider credit counselling if you need advice on debt management.
Expert insight
"It’s important to use a line of credit responsibly, especially if you have bad credit. Before using your line of credit, ask yourself what the purpose is. If it’s to buy something you can’t afford, it’s best not to use it."
Features of lines of credit for bad credit
If you’re applying for a bad credit line of credit, keep an eye out for these features:
- High interest rates. Interest rates on lines of credit for bad credit can be as high as 35%. With this in mind, it’s a good idea to make more than the minimum monthly payment to minimize the interest that accrues.
- Fixed rates. Line of credit interest rates for bad credit are usually fixed, which means your rate will stay the same.
- Lower credit amounts. Online lenders tend to offer smaller credit limits than banks. If your credit score is less-than-perfect, you can expect to qualify for a lower amount than someone with excellent credit.
- Improve your credit. Making on-time payments on your line of credit can help rebuild your credit score.
Secured vs unsecured lines of credit
- Secured lines of credit. This type of line of credit is backed by collateral (usually your house), allowing you to access a higher credit limit and better interest rate. However, this product is not easy to get if you have bad credit because it’s offered by traditional lenders, not alternative lenders. For reference, the average secured line of credit rate is 4.56%.
- Unsecured lines of credit. With no collateral to secure the loan, unsecured lines of credit have higher interest rates. This is easier to get than a secured line of credit if you have bad credit because you can get one from an alternative lender. The average unsecured line of credit rate is 8.42%, but if you have bad credit, you’ll be charged much more than this.
Tips to get easy approval
Even if your credit score is poor, there are several simple things you can do to increase your chance of getting approved by a legitimate lender:
- Check your credit report. Find out what your credit score is to get a better idea of which lenders may be willing to work with you. You can also check whether there are any inaccuracies in your credit report that need to be fixed.
- Pay down your debt. Your debt-to-income (DTI) ratio is a key factor lenders will consider when you apply for credit. By taking the time to pay down your existing debts, you’ll ensure that a smaller portion of your income goes towards paying back what you owe. Lenders typically want to see a DTI below 40%, but lenders of lines of credit for bad credit are open to higher DTIs.
- Apply for a smaller amount. Lenders are more likely to approve you for smaller amounts than larger amounts.
- Get a cosigner. Finding someone with strong credit who is willing to cosign your loan will also boost your chance of getting approved. However, that person will have to step in and cover the repayments if you fall behind.
How to apply
It’s easy to apply for an online personal line of credit for bad credit. Here’s what you need to do:
- Compare your options. Compare lenders to find out about their eligibility requirements, line of credit amounts and interest rates. You can do your own research or go through a loan search platform to find a loan that’s right for you.
- Submit your application. Fill out an online application form with your name, contact details, and income and employment information.
- Provide supporting documentation. You may need to provide proof of ID, such as your driver’s licence or passport, and bank account information to prove your income.
- Get funded. It’ll typically take between one and three business days to get approved and funded. You can then withdraw from your available credit as needed to fund any expenses.
Related: Guide to lines of credit in Canada
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