Personal loan scams are more common than you might think. The Canadian Anti-Fraud Centre reports that Canadians lost $384 million to fraud in 2021, $530 million in 2022 and (as of March 31) $133.7 million so far in 2023. That’s why it’s important to shop around for legitimate loan companies in Canada and know how to spot personal loan scams before they happen to you.
Legitimate loan companies in Canada
Browse the table below to find samples of legitimate loan companies in Canada.
Personal loan lender
Key features
How it is legit
Loan amount: $300 – $50,000
Loan term: 3 - 60 months
Rates: 6.99% - 46.96%
Loans Canada only works with financial service providers that adhere to Canadian laws and regulations.
LoanConnect vets all of the loan providers it works with to make sure your money is safe. It also has a dedicated customer support and large customer base.
Mogo offers a range of financial products with many positive reviews, though it has some negative reviews for its personal loans. The company has been featured in The Globe and Mail, BNN and CBC.
Loanz’ parent company is Consumer Genius Inc. In 2021 Consumer Genius was named Canada’s 17th fastest growing company by the Globe and Mail’s Report on Business.
Magical Credit is a web-based lender offering both installment loans and mortgages. It was nominated for a FinTech Award in 2018, and has been featured on multiple best personal loan lists.
You can find other legitimate loan companies in Canada by searching for companies on Google or by using a personal loan broker to connect to legitimate lenders near you.
10 signs of a personal loan scam
Make sure you work with legitimate loan companies in Canada by learning how to spot personal loan scams. Avoid the following when deciding on a lender:
1.The lender requires you to pay for fees upfront.
Lenders that ask you to pay processing, insurance or origination fees as a condition of loan approval are operating a scam. Legitimate loan companies in Canada won’t ask you to pay any additional fees until your application is processed and you have received your loan.
2. The lender isn’t registered in your province or territory.
Provinces and territories require legitimate loan companies in Canada to register their financial businesses. If the lender you want to use isn’t licensed to operate in your province or territory — even if it’s licensed in other provinces or territories — then you should choose another lender to avoid potential personal loan scams.
3. Your loan offer is incomplete.
Loan companies in Canada are required to provide a loan contract that outlines the terms of your loan and the total cost you’ll pay with interest. If your offer is missing important information, contains spelling or grammatical errors or otherwise raises red flags, it could be a personal loan scam.
4. You can’t find a physical address.
If you can’t find a physical address or contact information on the lender’s website, it may be a personal loan scam. If there is contact information on the website, you may want to search for the address or call customer service to ensure that the info provided actually belongs to a legitimate loan company in Canada.
5. Your offer expires soon — and you must act now.
Most offers that are categorized as “urgent” can be written off as personal loan scams. Legitimate loan companies in Canada offer steady rates that depend on your credit score and finances. High-pressure sales tactics are designed to drive you to act quickly, often before you’re able to spot other red flags.
6. No credit check required.
Most legitimate loan companies in Canada will perform a credit check to make sure that you can reliably handle your loan repayments. Be wary of lenders that offer no credit check loans unless they have other means of verifying your ability to repay. For example, some lenders will require you to provide proof of income instead of a credit report.
7. You’re offered guaranteed approval.
Many personal loan scams involve the offer of a “guaranteed” loan with no background check. Legitimate loan companies in Canada won’t offer you a loan without first verifying your identity and assessing your creditworthiness. This helps them follow up with you if you default on your loan payments.
8. Unsolicited contact.
Loan scams can come in many forms – including social media requests, emails and even flyers to your mailbox. If you’re interested in a loan offer, make sure to do your own digging online to double-check that the company offering the deal is legitimate. If you can’t find the lender’s website, social media profiles or online reviews, it’s likely a scam.
9. No examples of fees, interest or costs
If a lender doesn’t list its interest rates or fees online – or provide them over the phone when you call — you could be dealing with a scam. Most legitimate loan companies in Canada will provide you with a quote for prices at the very least. Avoid working with lenders that aren’t transparent about how much your loan will cost.
10. Asks for payment in the form of a gift card.
Paying a lender with a gift card is the same as paying with cash — once the money has been used, it’s nearly impossible to trace or get back. Legitimate loan companies in Canada won’t ask you to pay with a gift card. If your lender is pressuring you to do so, you should find a new lender.
What to do if you're the victim of a scam
Personal loan scams are often very sophisticated and can happen to anyone. If you suspect that you’re the victim of a loan scam:
Call your local police. File a police report for the amount you’ve been defrauded.
File a complaint with the CAFC. Contact the Canadian Anti-Fraud Centre (CAFC) to lodge a complaint about a specific provider. Call toll-free at 1-888-495-8501 or file a complaint online at the Fraud Reporting System (FRS).
Call Crime Stoppers. Contact Canadian Crime Stoppers at 1-800-222-8477. You can also submit a tip about personal loan scams online using the Webtip service.
Who is most likely to be researching personal loan scams?
Finder data suggests that men aged 25-34 are most likely to be researching this topic.
Response
Male (%)
Female (%)
65+
1.75%
4.14%
55-64
6.80%
4.50%
45-54
8.27%
7.35%
35-44
12.50%
9.19%
25-34
15.90%
12.41%
18-24
7.72%
9.47%
Source: Finder sample of 1,088 visitors using demographics data from Google Analytics
How to find legitimate loan companies in Canada
Before signing a loan contract, consider these tips to be sure you’re dealing with a legitimate lender.
Easy to contact. You should be able to easily access the lender’s phone numbers, email addresses, in-person building locations and business licensing information online.
Secure website. Most lenders encrypt the information you send online with 128-bit or 256-bit SSL. Look for a little padlock to the left of your address bar to confirm the site is safe.
Lender asks for a credit check. You should expect legitimate loan companies in Canada to check your credit. This can be through a soft pull on your credit to verify your ID or a hard pull that verifies your credit score.
Solid customer reviews. Double-check customer reviews online to see if the lender you want to work with is trustworthy. Just be mindful of reviews that are all positive or all negative. You should also be wary if a lender has very few reviews as it may be difficult to assess its legitimacy.
No upfront fees. Legitimate loan companies in Canada won’t charge you any fees until you receive your loan — though some might deduct an origination fee from the funds before it shows up in your bank account. This should be clearly outlined in your loan agreement if it does occur.
Clear loan terms. The terms of your loan should be clearly outlined in your loan contract. Double-check that all of the information provided to you verbally is included in writing as well. If anything is missing from your loan contract, avoid signing it until it reflects all of your loan information.
What information should be included in a legitimate loan contract?
Legitimate loan companies in Canada should include the following information on your loan contract:
Loan amount
Interest rates
Monthly repayment amount
Repayment method
Applicable fees
Legal obligations
Consequences of defaulting
Date and signatures
Are other loan companies legitimate?
Loans Canada is a legit online loan provider company. But, unfortunately, Loans Canada has fake impersonators. This is why it’s important to access Loans Canada loans directly through the company's website. If you’re wondering if the Loans Canada correspondence you’ve received is legit, you should call the company directly yourself to ask if it tried to contact you.
No, we’re not signing off on its legitimacy. According to the Financial Services Regulatory Authority of Ontario, Canada Lending Corp does not have a licence to provide mortgages and also asks for upfront fees, which is a red flag.
We’re not signing off on its legitimacy. The Altego Lending site is underdeveloped and has no mailing address, phone number or email number. We also couldn’t find its registration.
They seem to be. Lamina Loans has an office address, phone number, email address, Google profile, Trustpilot profile, terms and conditions, and privacy policy, which are all positive signals that they’re legit.
No, we can’t sign off on its legitimacy. The site has a poor user experience and has no contact details. We also couldn’t find its registration, and the Canadian Consumer Finance Association (CCFA) has a scam alert on this.
We’re not signing off on its legitimacy. The site is missing a phone number and email address, and we couldn’t find them in the business registry.
We’re not signing off on its legitimacy. The site is missing an office address, phone number, email address, terms and conditions, and privacy policy. We also couldn’t find them in the registry.
We’re unable to determine its legitimacy because the site is down at the time of writing.
They seem to be. The site has an office address, phone number, legal docs and Trustpilot profile. However, at the time of writing it has a D+ rating on BBB.
We’re not signing off on its legitimacy because the site is missing an address, phone number and email address. We also couldn’t find it on the registry.
We’re not signing off on its legitimacy because the site is missing an address, phone number, email address, terms and conditions, and privacy policy. We also couldn’t find it on the registry.
Common types of personal loan scams to avoid
Here’s how to protect yourself from two common scams you might encounter when applying for a personal loan: phishing scams and advance-fee scams.
Phishing scams
Phishing loan scams are used to collect your personal information to access your bank account or steal your identity.
Phishing scams usually:
Collect information through unsolicited phone contact
Install malware using unsolicited emails with embedded links
Request information via text messages
Promote their websites through sponsored ads on Google
How to avoid this type of scam
Avoid giving out your personal information over the phone
Never give out your banking information or passwords
Don’t click on unsolicited email links (even from companies you know)
Confirm that you’re on an encrypted page by looking for a padlock to the left of the page URL (on a site that starts with https://)
Protect your accounts by using multi-factor authentication
Advance-fee loan scams
Advance-fee scams demand that you pay an upfront fee before your loan application is assessed or before you can access the funds you’ve been approved for.
Advance-fee scams often:
Contact borrowers through unsolicited calls or online advertisements
Target bad credit borrowers who can’t qualify for traditional loans
Request advance fees such as processing, insurance or guaranteed approval fees
Request payment in the form of wire transfers, prepaid debit cards or gift cards (these methods are untraceable)
How to avoid this type of scam
Understand that it’s illegal for legitimate loan companies in Canada to ask for advance fees
Never hand money over to a loan company before your loan is in your bank account
Look at customer reviews and third-party ratings to make sure that a company is legitimate before you apply
Check to see that the lender is registered in your province
4 quick ways to verify legitimate loan companies in Canada
Visit these sites to help you verify an online loan lender:
Better Business Bureau (BBB). The BBB is an independent nonprofit dedicated to strengthening relationships between businesses and customers. It rates how a business works by analyzing customer reviews and complaints, allowing businesses to respond with a resolution. A leader in consumer ratings, the BBB is a reliable resource.
Trustpilot. A Danish company, Trustpilot is another consumer-run review site with some 500,000 new customer reviews published monthly. Combined with the BBB, you can create a pretty good picture of how a lender runs its business and what you need to know before applying for a loan.
FCAC or CCFA complaint database. The Financial Consumer Agency of Canada (FCAC) and the Canadian Consumer Finance Association (CCFA) are government-run agencies that help you search for complaints from current and former customers. You can also look into whether these agencies have taken legal action against the lender that you’re interested in.
Online forums. Don’t stop with the big review sites. Plenty of online forums like Reddit and Quora allow you to browse real customer opinions and crowdsourced answers about lenders and potential scams. Or, post your own questions about a lender and see what other customers have to say.
Bottom line
Personal loan scams are becoming more common and more sophisticated, which means it’s important to know how to protect yourself. Learn more about how you can recognize personal loan scams as well as who you can report them to. You can also use this post to compare legitimate loan companies in Canada.
Frequently asked questions about personal loan scams
Most legitimate loan companies in Canada won't make unsolicited offers for pre-approved loans. If they do, they will specify that your approval is not guaranteed and will be based on personal information such as your credit score. Avoid responding to unsolicited loan offers in general to be on the safe side – or research the company offering the loan in detail before you apply.
While reddit can be a helpful first stop to find other customers' opinions and experiences with different loan companies in Canada, it can also be helpful to check with financial specialists to check if a lender is legit or fake. We've curated our list of legitimate loan companies in Canada based not only on customer reviews, but also information like business registrations, independent business ratings and how well a company abides by provincial and federal lending regulations.
It depends. Many legit lenders will request your bank account information to confirm your identity and deposit your loan. That said, you shouldn't hand this information out unless you trust your lender entirely and are convinced that they are legitimate.
No. That shows two red flags: Legitimate lenders don't collect fees up front and won't ask for additional money by prepaid card or a money transfer. Any fees you'll need to pay are typically disclosed clearly, taken from the amount you borrow and paid after your loan is approved.
Calls from businesses you don't recognize are likely a scam designed to pressure you into handing over your personal or financial information. If you're not sure, ask the caller for the full business name and licensing number and then search for contact information to call them back.
Claire Horwood is a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee.
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