Short-term loans can give you access to quick cash even if you have bad credit. These loans are designed for emergencies and should only be used if you run out of other options since they can be very expensive.
Follow this guide to learn more about short-term loan options in Canada and compare lenders.
The following are the various types of short-term loans and cash advances in Canada:
One option to get a short-term loan is from a cash advance provider. You pay no interest on these loans, but you may pay a monthly fee.
To make comparing even easier, we came up with the Finder Score. Interest rates, fees and features across 5+ cash advance providers are all weighted and scaled to produce a score out of 10. The higher the score the better the loan—simple.
Another short-term loan option is to apply online for an installment loan.
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.
You can also get a short-term loan by applying online for instant approval from a direct payday lender.
Short-term loans in Canada are loans with terms typically lasting anywhere from 2 weeks up to 2 years. For comparison, standard personal loans often come with loan terms up to 5 years. You’ll need to make sure you can afford repayments, because these types of loans – especially short-term loans for bad credit – tend to come with very high interest rates.
There are several types of short-term loans available to Canadians. The main differences between each type comes down to how long you have to pay back the loan and the interest or fees involved. The 4 main types are short-term loans are:
Installment loans are paid off with monthly payments and loan terms as short as 3 months, which makes them a potentially affordable short-term loan solution compared to payday loans.
Some examples of direct lenders are Green Loans and Spring Financial, while brokers include Loans Canada and LoanConnect. Short-term installment loans come with the following features:
You may need to meet these eligibility criteria to qualify for short-term installment loans:
Compare short-term installment loans
Payday loans in Canada come with very high interest rates and are typically paid back by your next payday – making them viable short-term loans for people looking for quick, emergency cash.
If your prioirty is a fast turnaround time, consider payday loan providers like iCASH and GoDay that can e-transfer funds directly to your account within 2 minutes. Some other payday lenders that offer short-term loans in Canada include Loan Express, Speedy Cash and My Canada Payday.
Payday loans come with the following features:
You’ll typically have to meet these criteria to qualify for short-term loans like payday loans:
Compare short-term payday loans
These are small, short-term loans that typically must be paid back with your next paycheque. Nyble and Bree are examples in Canada. Both apps don’t charge any interest, but Nyble has a membership fee of $11.99 and Bree charges a $2.99 monthly subscription fee if you need access to express funding. These types of apps tend to have the following features:
These are the most basic requirements you’ll need to meet to be eligible to get a short-term loan from pay advance apps:
Compare short-term pay advance apps
Credit card cash advances let you borrow money against the credit limit on your credit card, which can be a viable short-term loan option for Canadians. They come with the following features:
If you want to use a credit card cash advance as a short-term loan solution, you’ll typically need to meet the following criteria:
Below is an example of how much a $700 loan would cost if you get a short-term installment loan, payday loan or credit card cash advance.
Mark, an Ontario resident, needs to borrow $700 for some urgent car repairs. He searches for short-term loans in Ontario and compares the cost of his 3 short-term loan options.
| Short-term installment loan | Payday loan | Credit card cash advance | |
|---|---|---|---|
| Loan amount | $700 | $700 | $700 |
| Loan term | 6 months | 14 days | 14 days |
| Interest rate | 35% | $14 for every $100 borrowed | 22.99% + 5% fee |
| Repayments | $128.86 per month for 6 months ($73.17 interest) | 1 full payment of $798 ($98 interest) | 1 full payment of $741 ($41.17 interest) |
You can use short-term loans in Canada for anything, but they’re designed for financial emergencies. You may want to use the money you borrow for car repairs, hospital bills or other expenses that come up unexpectedly between paycheques. It’s best to avoid using borrowed money for vacations, shopping sprees, investing or other unnecessary costs.
Yes, there are many short-term loans for bad credit borrowers, but just keep in mind that you’ll be charged higher interest rates. Many short-term installment loan lenders, like Green Loans, Spring Financial and Mogo, offer bad credit loans. Pay advance app providers also tend to focus more on your income than your credit score. Pay advance apps like Nyble don’t check your credit score at all during the approval process.
You can get a short-term loan with no credit check from installment loan, payday loan and pay advance loan providers. Some online short-term loan providers, like Green Loans, offer no credit check installment loans, which have much smaller APRs than payday loans. Pay advance apps, like Nyble, also don’t do credit checks.
Follow these tips when applying for short-term loans with bad credit to avoid common pitfalls:
When browsing short-term loans online, make sure you apply with a legitimate lender by looking for the following features:
Follow these steps to apply online for short-term loans in Canada:
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