Personal Loan Scams: Who Are Legitimate Loan Companies?

Here's a breakdown of legit loan companies in Canada plus 10 warning signs of personal loan scams.

Claire Horwood's headshot
Leanne Escobal's headshot

By

Claire Horwood

&

Leanne Escobal

Edited by

Stacie Hurst

Updated

Fact checked

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The Canadian Anti-Fraud Centre reports that Canadians lost $645 million to fraud in 2024 and $544 million in 2025, as of September 30. 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.

Key takeaways

  • Be wary of promos and offers that seem too good to be true, especially if you don’t have perfect credit. They’re likely a scam.
  • Steer clear of companies that require you to make upfront payments, such as for “loan insurance.”
  • Look for the company’s contact information, terms and conditions, privacy policy and business registration to check if it’s legit.

Legitimate loan companies in Canada

Browse the table below to find samples of legitimate loan companies in Canada.

Personal loan lenderKey featuresWhy it is legit
Loans Canada
  • Loan amount: $500 – $35,000
  • Loan term: 6 - 60 months
  • Rates: 9.99% - 35.00%
Loans Canada only works with financial service providers that adhere to Canadian laws and regulations.Go to siteRead review
Spring Financial
  • Loan amount: $500 – $35,000
  • Loan term: 6 - 84 months
  • Rates: 9.99% - 34.95%
Spring Financial has given loans to hundreds of thousands of Canadians since its inception in 2014. It also has 4.6/5 stars based on 19,700+ Trustpilot reviewsGo to siteRead review
LoanConnect
  • Loan amount: $500 – $60,000
  • Loan term: 3 - 120 months
  • Rates: 8.99% - 35.00%
LoanConnect vets all the loan providers it works with to make sure your money is safe. It also has dedicated customer support and a large customer base.Go to site
SkyCap
  • Loan amount: $500 – $100,000
  • Loan term: 9 - 60 months
  • Rates: 8.99% - 35%
SkyCap Financial is a registered corporation and is accredited by the Better Business Bureau with an A+ rating.Read review
Gopeer
  • Loan amount: $1,000 – $35,000
  • Loan term: 36 or 60 months
  • Rates: 8.99% - 34.99%
Peer Securities, the subsidiary that goPeer uses for issuing exempt market securities, is a member of the Ombudsman for Banking Services and Investments. It’s a registered exempt market dealer in all Canadian provinces.Read review
MDG logo
  • Loan amount: Up to $1,600
  • Loan term: Up to 36 months
  • Rates: Undisclosed
MDG Financial has an A+ rating with the BBB. Beyond personal financing, MDG has been selling electronics since 1991. The company has received more than 3,000 customer reviews on Trustpilot with a rating of 3.9/5.Read review
Loanz
  • Loan amount: $1,000 – $15,000
  • Loan term: 12 - 60 months
  • Rates: 29.90% - 46.90%
Loanz‘s 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.Read review
Fairstone logo
  • Loan amount: $5,000 – $60,000
  • Loan term: 36 - 120 months
  • Rates: 19.99% - 23.99%
Fairstone is an A+ rated Accredited Business by the Better Business Bureau (BBB).
FlexMoney
  • Loan amount: $500 – $15,000
  • Loan term: 6 - 60 months
  • Rates: 18.90% - 35.00%
FlexMoney clearly displays its high-cost credit licence for BC and Alberta. It also uses tools like bank-level encryption to protect your information and has an A+ BBB rating.Read review
magical credit
  • Loan amount: $1,500 – $20,000
  • Loan term: 12 - 60 months
  • Rates: 19.99% - 35.00%
Magical Credit clearly displays its payday licence for Ontario, BC and Alberta and its consumer-lending licences for Alberta and BC.Read review

Are other loan companies legitimate?

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 fees up front

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’ve 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’s 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 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 offering 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 in your mailbox. If you’re interested in a loan offer, 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 give you a quote with costs at the very least. Avoid working with lenders who 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 with 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 through 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.

How to know if a loan company is legit

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 that the site is safe.
  • The lender asks for a credit check. You should expect legitimate loan companies in Canada to check your credit. This can be through soft pulling your credit to verify your ID or hard pulling to verify 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 your money 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 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 your loan information.

What information should be included in a legitimate loan contract?

Legitimate loan companies in Canada should include the following information in your loan contract:

  • Loan amount
  • Interest rates
  • Monthly repayment amount
  • Repayment method
  • Applicable fees
  • Legal obligations
  • Consequences of defaulting
  • Date and signatures

Common types of personal loan scams in Canada 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 over money to a loan company before the 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 if the lender is registered in your province

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.

ResponseMale (%)Female (%)
65+1.75%4.14%
55-646.80%4.50%
45-548.27%7.35%
35-4412.50%9.19%
25-3415.90%12.41%
18-247.72%9.47%
Source: Finder sample of 1,088 visitors using demographics data from Google Analytics

4 quick ways to verify legitimate loan companies in Canada

Visit these sites to help you verify an online loan provider:

  • Better Business Bureau (BBB).
    The BBB is an independent nonprofit dedicated to strengthening relationships between businesses and customers. It rates how businesses work by analyzing customer reviews and complaints and allowing businesses to respond with resolutions. 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 complaint database.
    The Financial Consumer Agency of Canada (FCAC) is a government-run agency that helps you search for complaints from current and former customers. You can also look into whether these agencies have taken legal action against the lender 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.

Has taking out a personal loan improved or worsened Canadians’ financial situations?

Getting a personal loan may not always be the answer. According to the Finder: Consumer Sentiment Survey January 2024, 20% of Canadians said that a personal loan worsened their situation, while 14% said they saw an improvement. Before taking out a personal loan, make sure you’re working with a lender you trust and the loan repayments fit your monthly budget.

Bottom line

Personal loan scams in Canada 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 guide to compare legitimate loan companies in Canada.

Frequently asked questions

Sources

Stacie Hurst's headshot
To make sure you get accurate and helpful information, this guide has been edited by Stacie Hurst as part of our fact-checking process.
Claire Horwood's headshot
Written by

Associate editor

Claire Horwood was 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. See full bio

Claire's expertise
Claire has written 336 Finder guides across topics including:
  • Banking
  • Personal Loans
  • Car Loans
  • Business Loans
  • Credit Cards
Leanne Escobal's headshot
Co-written by

Senior Publisher

Leanne Escobal is a senior publisher at Finder with more than 13 years of experience in financial products and services, with a focus on content strategy and marketing. She has completed the Canadian Securities Course (CSC®) as well as the Personal Lending and Mortgages course through the Canadian Securities Institute. Leanne holds a Bachelor of Arts (Honours) in English literature and creative writing from Western University. See full bio

Leanne's expertise
Leanne has written 178 Finder guides across topics including:
  • Personal Loans
  • Car Loans
  • Business Loans
  • Short-Term Loans
  • International Money Transfers
  • Make Money Online
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