Private & Traditional Personal Loan Lenders in Ontario

Who are the best lenders in Ontario?

Banks and credit unions

The following are the best banks and credit unions for personal loans in Ontario, based on our methodology:

1. CIBC. You can apply online and choose between a fixed and variable rate. Lower your rate by providing collateral.
2. Innovation Federal Credit Union. It offers a completely online process, with approval in one business day. Rates start at 6.2%, which is competitive.
3. Bank of Montreal. Personal loans are their most popular loan product. You can use the loan for whatever you need, such as home renovations, debt consolidation and investing.

Direct private lenders

If you don’t qualify for a loan from a financial institution, private lenders are an option. Based on our methodology, some of the best direct private lenders in Ontario include easyfinancial, Spring Financial and Fairstone. easyfinancial and Fairstone offer both secured and unsecured personal loans, while Spring mostly offers unsecured personal loans.

You can also apply to a loan search platform like Loans Canada or LoanConnect if you’d like to compare several offers.

What personal loan rates should I expect in Ontario?

Personal loan rates in Ontario go as high as 35%. The rate you’ll get will depend on many factors such as credit score, income, current debts, loan type and lender type.

Financial institutions vs private lenders

Banks (like BMO) and credit unions (like Kindred) have lower rates than online lenders on average, but they have stricter eligibility criteria. Rates start at 4.45%.

Online private lenders (like easyfinancial and Spring Financial) have higher interest rates than banks and credit unions, but they have more flexible requirements. Rates start at 6.99%.

How to get the best personal loan in Ontario

You can take the following steps to find the best personal loans for your situation:

• Check your credit score

  Getting your credit score will give you an idea of where to apply. Banks, credit unions and select online lenders offer personal loans only to people with good to excellent credit above 660. If your credit score is below 660, you have many options in online lenders.

• Compare loans and lenders

  Consider factors like lenders’ rates, fees, loan amounts, loan terms, speed, repayment flexibility and reputation.

• Get pre-approval

  Get personal loan pre-approval from your top choices so you can compare loan offers. Some lenders can give you a quote within minutes of applying without affecting your credit score.

• Submit documents

  Once you have your number one lender, complete the rest of the process by submitting documents it needs to verify your income and identity, such as bank statements and recent pay stubs. Your lender will do a hard credit check if it hasn’t already.

• Get your formal loan offer

  If you’re approved, the lender will send you a contract. Review it carefully, taking into account the loan amount, loan term, payment schedule, interest rate and any other costs you may encounter.

• Submit your contract

  Once you submit your signed contract, you’ll get your money via e-transfer or direct deposit.

What are the types of personal loans?

You can choose between a secured and unsecured personal loan as well as a fixed and variable rate.

Secured vs unsecured loans

• Secured loans. Since secured personal loans have collateral, such as your house or car, they often have lower rates. If you default on your loan, your lender has the right to repossess your asset. How much you can borrow will depend on the asset you use as collateral.
• Unsecured loans. Unsecured personal loans often come with higher interest rates since they don’t involve any collateral. Your eligibility will be determined by your credit score and other personal factors.

Fixed-rate vs variable-rate loans

• Fixed-rate loans. With fixed-rate personal loans, you will lock in an interest rate at the beginning of your loan term so your repayments always stay the same.
• Variable-rate loans. Variable-rate personal loans generally come with lower starting annual percentage rates (APRs) compared to fixed rates. The catch? As the name suggests, variable-rate loans have fluctuating interest rates.

How to compare personal loans in Ontario

Interest rates

People with good credit will pay lower interest rates compared to those with a bad credit history. Having a solid understanding of personal loan interest rates in Canada will help you pick the best loan offer.

Loan amounts

You can get a loan in Ontario as small as $500 and as large as $50,000.

Loan terms

Personal loans usually have loan terms between 3 and 60 months. Keep in mind that the longer your loan term, the more you’ll pay in interest.

Repayment flexibility

Find a lender that offers the payment frequency you need, whether that’s weekly, bi-weekly, semi-monthly or monthly. Also, find a lender that will not charge you penalties for making extra payments or paying off your loan early. Prepayment penalties are only common in personal loans secured by real estate.

Fees

In addition to prepayment penalties, look out for NSF fees ($25–$50), late payment fees, origination/set-up fees (0–5% of the loan amount) and loan insurance (an optional product).

Speed

Complete the process with online private lenders in one to three business days. Credit unions and banks, on the other hand, can take a few days to a few weeks.

Am I eligible for personal loans?

Whether you’re applying for a $3,000 loan or $15,000 personal loan, lenders follow a similar process in determining your eligibility. Here’s a look at five key areas to consider to help you put your best financial foot forward:

Credit score

Your credit score is put together based on factors like your debt payment history and credit utilization ratio. If you have good to excellent credit, you qualify for low-interest personal loans.

Income

Lenders require that you have a stable source of income to ensure you can keep up with the loan repayments. Lenders vary in their income requirements, but generally, you need a minimum of $1,200 to $1,800 per month.

Employment

Applications ask for your employment information because lenders want to find out whether you have the income to repay your loan. If you’re unemployed, some lenders accept applicants who receive government benefits or private pension. Your goal is to show lenders you can afford to repay the loan. Learn more about unemployment loans.

Loan security

Offering collateral to secure your loan increases your chances of approval.

Debt-to-income ratio (DTI)

DTI is the percentage of your gross monthly income that goes towards your monthly debt payments, such as rent/mortgage, car loan, student loan and credit card minimums. It does not include living expenses such as groceries, utility bills, cell phone bills and entertainment.

Can I get personal loans in Ontario with bad credit?

If you have bad credit, it’s possible to get a personal loan. Online lenders are the main source of bad credit loans in Ontario. You can apply online, providing information such as your employment history, income and credit score, and you should hear back within the same day or the next day.

Bad credit loans will be expensive because lenders see borrowers with low credit scores as a higher risk of defaulting. Be sure to compare lenders’ rates, fees and reputation.

If you’re experiencing financial hardship and struggling to get approved for any loan, you may wish to consider debt relief.

How can I tell if a private lender in Ontario is legitimate?

Borrowing online can be a lot more convenient than visiting a lender in person. But it also comes with a higher chance of borrowing from the wrong lender. Look for the following signs to make sure you’re working with someone legitimate:

• Does not guarantee approval. Sites that promote guaranteed approval loans are either a scam, predatory or have fine print that actually doesn’t make the loan guaranteed. Reputable lenders are clear about their eligibility requirements and do not promise to approve everybody. Learn more about guaranteed approval loans.
• Has an established presence. Pick a lender that has a verified office address, phone number and email and has received a decent amount of reviews from customers.
• Does not ask for any upfront payment. If a lender asks you for any money before you access your loan, avoid it. This is a common scam.
• Doesn’t rush you. You may want to avoid lenders using high-pressure sales tactics to get you to sign a contract.

Frequently asked questions

• Are there personal loans with no credit checks in Ontario?

  Yes, there are some lenders that don't do credit checks for their personal loans, but you will get approved for lower loan amounts and at much higher rates. Be careful of where you apply, because scammers sometimes use the "no credit check" tagline to steal financial and personal information.

• Where can I find small loans in Ontario?

  This depends on how small the loan amount is. Banks and credit unions generally start at $2,000 to $5,000 for their personal loans, though you may find a local credit union that can finance a smaller amount. Online lenders generally start at $500 to $1,000.

• Can I get a personal loan in Ontario if I'm unemployed?

  It's possible if you have another source of income. However, it also depends on the lender. Some lenders accept government benefits and/or private pension as a valid source of income, while others do not. Learn more about loans when you're unemployed.

• How long does it take to get approved?

  This depends on the lender. Online lenders can provide approval on the same day or the next day. Banks and credit unions can take a few days to a few weeks because they have stricter eligibility requirements.

Written by

Leanne Escobal

Publisher

Leanne Escobal is a publisher at Finder with more than 12 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 175 Finder guides across topics including:

• Personal Loans
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Co-written by

Chelsey Hurst

Publisher

Chelsey Hurst is a publisher at Finder, specializing in banking and investments. She loves empowering people to avoid financial pitfalls and make better decisions with their money. Chelsey has a Bachelor of Science from Redeemer University, a Master of Science from McMaster University, and has won multiple awards for research communication. In her spare time, Chelsey enjoys cooking and taking long walks in nature. See full bio

Chelsey's expertise

Chelsey has written 123 Finder guides across topics including:

• Banking
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