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Installment loans in Canada

Compare online installment loans and borrow up to $10,000 or more.

1 - 5 of 5
Name Product Interest Rate Loan Amount Loan Term Requirements
Loans Canada Installment Loan
8.00% - 46.96%
$500 - $50,000
4 - 60 months
Requirements: min. credit score 300
SkyCap Installment Loan
19.99% - 39.99%
$500 - $15,000
9 - 60 months
Requirements: min. income $1,666/month, full time employment/pension, min. credit score 575, no bankruptcy
Spring Financial Installment Loan
9.99% - 46.96%
$500 - $35,000
9 - 48 months
Requirements: min. income $1,800/month, 3+ months employed, min. credit score 500
LoanConnect Installment Loan
$500 - $2,500
3 - 6 months
Requirements: min. credit score 300
Mogo Installment Loan
9.90% - 46.96%
$200 - $35,000
6 - 60 months
Requirements: min. income $13,000/year, min. credit score 500
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.

Compare up to 4 providers

Installment loans in Canada are designed to cover one-time expenses that need a quick fix. Read on to learn about installment loans and decide whether they are the right product for you.

First, what exactly are installment loans in Canada?

The term “installment loans” can cause some confusion because there are some competing definitions here in Canada. Let’s break those down here:

  • In the most technical sense, installment loans are any type of loan that you pay back in installments over time. These include mortgages, car loans, student loans and personal loans.
  • Sometimes, “installment loans” are used interchangeably with “personal loans”, and in this second definition, they are personal loans that you can get from any lender, whether that’s a bank, credit union or alternative lender. However, banks and credit unions in Canada rarely say “installment loans” they use the term “personal loans” instead.
  • In the third definition, “installment loans” are a specific personal loan from alternative lenders with higher interest rates, lower loan amounts and more lenient eligibility criteria than traditional personal loans.

For this article, the third definition applies.

What can I use installment loans in Canada for?

You can generally use installment loans for any legitimate purpose. However, it might be best to save them for emergencies, since they can come with higher interest rates than other types of personal financing. You can use installment loans for:

  • Medical expenses. Sometimes healthcare providers don’t provide financing that all patients can qualify for. An installment loan can help make paying off medical bills more manageable, although more expensive.
  • Building or car repairs. Got a car that needs urgent repairs? Installment loans can help you cover that cost, no mater what your credit type is.
  • Overdue utility bills. An installment loan can help you keep the lights on, water running and phone line working when you don’t have the funds to make your utility payments on time.
  • Building your credit. Taking out an installment loan can sometimes help you rebuild your credit if you make payments on time. If this is your primary goal, however, you might want to consider applying for a credit building loan at a local financial institution like a bank or credit union. These which typically comes with lower interest rates and have low credit requirements.

How much will my installment loan cost me?

This will depend on the loan and the lender. When you apply for a loan and are approved, you should receive a loan contract that will outline the fees and interest rate that will apply to your loan.

Here are the costs that may apply:

  • Fees. Fees can vary among lenders, so when searching for online installment loans in Canada, ask lenders to break down all their fees. Ask about origination fees, prepayment penalties, late payment fees and NSF fees.
  • Interest. This is the rate of interest you are charged for borrowing, expressed as a percentage.
  • Annual percentage rate (APR). This includes all fees and interest expressed as a yearly percentage.

Use our monthly payment calculator below to see how much you’ll pay in both the short and long run:

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Payday loans vs installment loans: What’s the difference?

Some alternative lenders offer both types of loans, while others only offer one or the other. Both are high-interest loans, but overall, installment loans have higher loan amounts, longer loan terms and lower APRs than payday loans. Learn more about payday loans vs installment loans.

Am I eligible for installment loans in Canada?

You can apply for online installment loans if you have bad credit or low income, as long as you can afford the repayments. Generally, lenders will look at your income, credit history and employment information to determine your eligibility.

Basic eligibility requirements include the following:

  • Proof of income. This doesn’t mean you need to be employed full time, but you may need some sort of income, whether it is disability, welfare, a pension or a part-time job.
  • Active bank account. If you don’t have a bank account, you can sometimes get a cash installment loan from a physical branch location.
  • Valid government-issued ID. Lenders might ask to see your driver’s licence to verify that you meet the age requirements. You will typically need to be the age of majority in your province or territory, which is normally 18 or 19 years of age.
  • Canadian citizen or permanent resident. You’ll typically need to be a Canadian citizen or a permanent resident to apply for a loan.

Applicants with good to excellent credit scores are more likely to get a good deal on online installment loans. That’s because many lenders use underwriting software that rely heavily on your credit history when determining your eligibility.

7 tips for finding the right installment loan in Canada

  1. Check the lender’s minimum and maximum loan amounts. Can you borrow the amount you need from them?
  2. Pay attention to the APR, not just the interest. A loan’s APR takes into account both interest rates and fees, giving you a better idea of the true cost of the loan.
  3. Compare lenders. You might not be getting the best deal if you don’t look at multiple lenders. You can start by using our comparison table.
  4. Check eligibility requirements. Lenders have their own eligibility criteria. Check that you meet them before applying to save yourself time.
  5. Don’t be tricked into long terms. Some installment loan providers offer high-interest loans with long terms. While this might reduce your monthly payments significantly, you could end up paying double the amount your borrowed — or even more — if you take the entire time to pay it off.
  6. Don’t rush. Don’t rush into a loan agreement without understanding the terms, such as your interest rate, loan term, repayment schedule and other fees. Avoid lenders that pressure you into signing.
  7. Ask yourself: Does a credit card make more sense? Credit cards typically have higher interest rates than personal loans, but that’s not always the case with online installment loans. There’s a chance you could get funding at less cost (or risk) by slapping that expense on plastic, if it isn’t over your credit limit.

      What are the benefits of online installment loans?

      • Easy application. Apply online within minutes. Some online lenders can give personal loan pre-approval within minutes.
      • Quick approval and funding. You can get approval and funding within 24 to 48 hours.
      • Flexible eligibility criteria. Getting online installment loans with bad credit is possible, primarily because lending requirements are slightly more relaxed. “No credit check” online installment loans generally don’t make hard inquiries on your credit score, but you’ll need to demonstrate how you’ll be able to repay the loan back.
      • More manageable repayments structure. Unlike payday loans that you have to repay by your next payday, you can take longer to repay your installment loan. Most lenders even give you the ability to choose between making payments once or twice a month.

      What are the drawbacks of online installment loans?

      • High interest rates. Online installment loans tend to have higher interest rates than conventional personal loans. Watch out for long loan terms because you could end up paying more interest than the amount you borrow.
      • Disreputable lenders. Be wary of which lender you choose and where you provide your personal and financial details online.

      Watch out for predatory lenders

      With many online installment loans in Canada, be sure to do your research before signing a loan agreement. Much like payday loans, installment loans are expensive and can act as debt traps. Here’s what to look out for:

      • Loan renewal options. Does your lender allow you to renew or “rollover” your installment loan if you can’t pay it off in time? You might want to look somewhere else, because this is how you can fall into a vicious cycle of debt.
      • Guaranteed approval. Lenders that guarantee you can get an installment loan through them before you apply are not looking out for your best interests. Most reputable lenders want to make sure you can pay off your loan first before telling you that you’ve been approved.
      • Upfront fees or payments. Reputable lenders that charge application or origination fees don’t ask for payment until after your have received your loan. Anything else could be a scam.
      • Pressure to borrow more money than you need. Borrowing more money than you need means that you’ll be liable to pay more interest. A lender that pressures you to take out more money than you actually need doesn’t have your best interests in mind.
      • Insurance add-ons. Some lenders push insurance options that sound like they protect you, but really protect them in the event that something happens to you that affects your loan repayment (like death or other accidents). Lenders typically don’t include this in their APR – even though it’s technically a fee – and use it as a way to get around regulations on how much they can charge.
      • The lender approached you. If you receive texts, email or calls, it could be a scam. At most, legitimate lenders might send you a letter or two in the mail. Run away if you feel as though they’re pressuring you into taking out a loan you don’t really need.

      What if I’m the victim of a predatory lender?

      Under federal law it’s illegal for lenders and collection agencies to repeatedly contact borrowers outside of work hours, threaten them with jail time or garnish their wages without a court order. If you believe you might be a victim of a predatory lender — even a tribal lender — you can file a complaint with the Office of Consumer Affairs in your province or territory.

      How to repay an installment loan

      How you repay your installment loan will depend on the lender. Generally, you need to make monthly, semi-monthly or weekly repayments until your loan is completely paid off.

      If your lender allows you to repay your loan ahead of time without charging a prepayment penalty, you could stand to save on interest. That is, as long as your loan repayments all go toward paying off interest and the amount you borrow.

      It’s not uncommon for installment loan providers to charge interest-only repayments in the beginning, meaning that you can’t save on interest by paying it off early. Understand the terms and conditions of your loan before you apply for and accept it.

      How do repayments work on an installment loan?

      Repayment terms will differ depending on what type of loan you apply for and the lender you apply with. Generally, the following will apply:

      Repayment termsDescription
      Loan termsThese vary between 6 months and 5 years.
      Payment methodLenders will usually automatically deduct payments from your bank account on the day the payments are due. Some lenders will also give you options of repaying the loan online, via a cheque or through an app.
      Repayment frequencyYou will usually repay the loan according to your pay schedule from work. If you get paid weekly, bi-weekly or monthly, you can arrange your repayments around this schedule.

      How does an installment loan affect my credit score?

      Taking the above factors into consideration, applying for and receiving an installment loan will likely affect your credit score in the ways listed below. Take note that some positively affect your credit score, while others may negatively affect it.

      • Inquiring about a loan or taking on new credit. Applying for a form of credit, whether it’s a credit card, a line of credit or a loan, means that your score will take a slight negative hit. If you apply for an installment loan, even if you aren’t approved, it will likely be listed on your credit score. In addition, any new loan can stay on your file for a minimum of 3 years.
      • How long your credit history is. The length of your credit history makes up a part of your credit score. Since installment loans are usually for longer terms, around 6 months to five years, they can have a potentially good impact on this component of your credit score.
      • Payments made to your installment loan. Your payment history makes up a major part of your credit score. If you don’t make your repayments on time, your credit score will be negatively affected. If you fail to make repayments and your loan goes into default, your score will take a bigger hit. If you make your repayments on time, your score will be positively impacted.
      • Variety of loans. Since you’re applying for an installment loan, this could be viewed positively on your credit history if you have a mix of other credit forms that are financially under control. However, if you have a lot of accounts open, this will be viewed negatively and your score will take a negative hit.
      • Keeping your balance-to-limit ratio in check. Since an installment loan only allows you to borrow a certain amount of money and make the repayments in installments throughout the set time period, you’ll be able to keep your balance-to-limit ratio in check.

      Alternatives to installment loans in Canada

      • Secured personal loan. If you have trouble getting approved for a personal loan, you can consider getting a secured loan. A secured loan means you have to use some collateral to back your loan, such as your car or house, which is used as leverage to make sure you pay back your loan. You’ll have a better chance at getting approved and getting a good deal on interest rates than you would with an unsecured loan.
      • Home equity loan. A home equity loan is a special type of secured loan that uses the amount of equity you own in your home as collateral.
      • Crowdfunding. If you don’t need those funds immediately, it might be worth it to reach out to your social network and start a crowdfunding campaign. You won’t have to pay it back, though many platforms charge a fee based on how much money you raise.

      Frequently asked questions

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