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Unsecured personal loans

Whether you have good or bad credit, find out where you can get unsecured loans in Canada with fast decision and funding.

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Looking for unsecured personal loans?Compare lenders
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Name Product Interest Rate Loan Amount Loan Term Requirements Link
Loans Canada Personal Loan
Secured from 2.00%, Unsecured from 8.00% to 46.96%
$300 - $50,000
3 - 60 months
Requirements: min. credit score 300
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More Info
A broker with the largest lender network in Canada. Fill out one application and get matched for free with lenders.
Spring Financial Personal Loan
17.99% - 46.96%
$500 - $15,000
9 - 48 months
Requirements: min. income $1,800/month, 3+ months employed, min. credit score 500
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More Info
If you're not eligible for an unsecured loan, you may be offered a credit builder loan to help improve your credit score.
SkyCap Financial Personal Loan
12.99% - 39.99%
$500 - $10,000
9 - 60 months
Requirements: min. income $1,600/month, stable employment, min. credit score 550, no bankruptcy
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More Info
Apply in less than 5 minutes for an unsecured loan and if approved, receive financing in as little as 24 hours.
LoanConnect Personal Loan
Secured from 1.90%, Unsecured 6.99%-46.96%
$500 - $50,000
3 - 120 months
Requirements: min. credit score 300
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More Info
Fill out one application with this broker and get pre-approved by different lenders in 5 minutes.
FlexMoney Personal Loan
18.90% - 46.93%
$500 - $15,000
6 - 60 months
Requirements: min. income $2,000/month, 3+ months employed, min. credit score 500
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More Info
Apply in less than 10 minutes for an unsecured loan and if approved, receive financing in as little as 24 hours. Pay off your loan any time without penalty.
OFFER
Mogo Personal Loan
9.90% - 46.96%
$200 - $35,000
6 - 60 months
Requirements: min. income $13,000/year, min. credit score 500
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More Info
Get a free quote without affecting your credit score and get an unsecured loan the same day. 100-day money-back guarantee: If you're not happy with your loan, pay back the principal and get the 100 days of paid interest and fees back.
Fairstone Unsecured Personal Loan
26.99% - 39.99%
$500 - $25,000
6 - 60 months
Requirements: min. income $1,000/month, min. credit score 525
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More Info
Get a free quote without impacting your credit score. Receive funds for an unsecured loan within as little as 24 hours. No prepayment fees.
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Compare up to 4 providers

Overall representative example
If you borrowed $20,000 over a 5-year term at 9.50% APR (variable), you would make 60 monthly payments of $420.04 and pay $25,202.23 overall, which includes interest of $5,202.23. The overall cost for comparison is 9.50% APR representative.

Unsecured loans in Canada let you borrow a lump sum of cash without having to put up collateral to secure your loan. The upside of unsecured loans is that you won’t have to risk losing an asset such as your home or vehicle if you default on your payments. The downside is that they’ll come with higher rates compared to secured loans.

Common features of unsecured personal loans

  • Interest rates. Interest rates range from 7% to 47%, depending on the state of your credit and other factors.
  • Loan term. Loan terms range between 6 and 60 months, though you may be able to qualify for a longer repayment period based on the size of your loan.
  • Loan amount. Unsecured loan amounts vary based on several factors. They can be for as little as $500 or as much as $50,000, depending on which lender you decide to go with.
  • Minimum credit score. There are lenders of unsecured personal loans with a minimum credit score of 300, but they charge high interest rates. Banks and credit unions, on the other hand, want to see at least 660, but their rates are competitive.

How do unsecured personal loans work?

Unsecured personal loans work just like any other loan you pay back in installments. Your lender will ask you to fill out an application for your loan and check your credit score. Once you get approved to borrow money, you’ll get a lump sum of cash deposited into your bank account to spend however you want.

You’ll need to start making repayments as soon as you get your money, even if you don’t spend it straight away. Your repayments will include any interest and fees that accumulate on your loan – so you should make sure to budget for these costs when figuring out the amount you can borrow.

Types of unsecured personal loans

There are a few different types of unsecured loans that you can take advantage of:

  • Fixed rate. A fixed-rate personal loan gives you an interest rate that stays the same throughout the loan term, which gives you predictable monthly payments.
  • Variable rate. A variable-rate personal loan gives you an interest rate that fluctuates with the markets. Banks and credit unions provide variable-rate unsecured loans. This year, economists expect the Bank of Canada to do series of rate hikes, so be prepared for your rate to increase if you get this loan.
  • Installment loan. This is a loan offered by alternative lenders. It has more lenient eligibility requirements, but you pay for this leniency with higher rates. Installment loans are for borrowers who would not qualify for a traditional personal loan.
  • Debt consolidation loan. This type of loan can be used to consolidate your debts so that you only have to make one payment. For example, you might take out an unsecured loan to pay off all of your credit card debt. You’ll then make a single payment on the new loan, usually at a lower interest rate.

Unsecured personal loans for bad credit with instant decision in Canada

If you’re looking for unsecured personal loans for bad credit with instant decision, you may want to consider alternative lenders in Canada that offer instant pre-approval. After you submit an application, these lenders use technology to scan your finances and decide instantly whether they want to proceed. Pre-approval is fast, and you can usually find out a lender’s decision within minutes.

If you choose to proceed, you may be asked to provide a few supporting documents, and the lender will do a more in-depth review of your finances. If everything checks out, it will give you official approval. Many online lenders can give official approval within 24 hours.

Unsecured personal loans for bad credit with instant decision in Canada

The bad credit loan providers below provide an instant decision for unsecured personal loans in Canada.

Personal loan providerKey featuresBasic requirements
Spring Financial logoSpring aims for same-day approval and funding.

Interest rates: 17.99% - 46.96%

Min. income of $1,800 /month, 3+ months employed, min. 500 credit scoreGo to site
Picture not describedGet an instant decision. Pay off your loan with no penalties.

Interest rates: 18.90% - 46.93%

Min. income of $2,000 /month, 3+ months employed

Min. credit score of 500

Go to site
LoanConnect logoSubmit 1 application and get matched with lenders within minutes.

Interest rates: 6.99% to 46.96%

Currents debts must total less than 60% of incomeGo to site
Mogo BitcoinGet a free quote within 3 minutes without impacting your credit score. Pay off the loan any time without penalty.

Interest rates: 9.90% - 46.96%

Min. income of $13,000 /year, min. 500 credit scoreGo to site
SkyCap logoSkyCap is a reputable lender offering fast personal loans. Apply online and get a decision within minutes.

Interest rates: 12.99% - 39.99%

Min. monthly income of $1,600+, stable employment

Min. credit score of 550

Go to site

3 tips to get an instant decision

  • Review your application before submitting to make sure all the information is correct. Errors can result in an automatic denial.
  • Provide all the information the application is asking for. Do not skip any steps even if there is an option to do so.
  • Agree to an online bank verification. With online bank verification, you log in through an encrypted portal to authorize your bank to send the lender electronic copies of your bank statements.

What is the interest rate of an unsecured personal loan?

An unsecured personal loan’s interest rate can vary significantly based on many factors, such as your credit score, income, type of interest rate, loan amount and loan term. The interest rate of an unsecured personal loan for bad credit is around 20% to 47%. The interest rate of an unsecured personal loan for good credit is around 7% to 20%. Compare the latest personal loan rates in Canada.

Unsecured loans in Canada for good to excellent credit

You may want to aim for an interest rate between 7% and 11% on your unsecured loan if you have good to excellent credit. While applying for an unsecured loan with good to excellent credit can net you lower interest rates, you could drive your rates down even further by applying for a secured loan. This will let you secure your payments against an asset so that your lender feels comfortable enough to lower your rates since your repayments will be reinforced by your credit score and a form of collateral.

Low interest personal loans

Pros and cons of unsecured loans

Pros

  • Simple application. It doesn’t take much to apply for an unsecured personal loan. All you need to do is submit to a credit check and input some personal details to get started.
  • No assets required. You won’t have to secure your loan with collateral or risk losing an asset if you default on your payments.
  • Flexible loan amounts. You may be able to qualify for more money with an unsecured loan since the amount you borrow won’t depend on the value of your assets.
  • Easy to qualify with good credit. You should be able to qualify fairly easily if you have a good to excellent credit score.
  • Use it for whatever you want. You can use the money you borrow to pay for just about anything you want and there’s no requirement to share this information with your lender.

Cons

  • Higher interest rates. You’ll typically have to pay higher interest rates than you would with a secured loan since your lender won’t be able to repossess any of your assets to cover their losses if you default on your payments.
  • Difficult to qualify with bad credit. You may have a harder time qualifying for an unsecured loan if you have bad credit.
  • Damage to credit score if you default. Your credit score will go down by a significant margin if you don’t make your payments on time.

How to compare unsecured loans in Canada

  • Loan amounts. Many lenders cap their unsecured loans at $35,000 to $50,000. That said, some lenders may allow you to borrow more depending on your credit score, income and debt-to-asset ratio.
  • Interest rates. Compare providers to make sure you lock in competitive interest rates. You may also want to check the annual percentage rate (APR)of your unsecured loan to get a better idea of how much it will cost.
  • Loan terms. Most loan terms range from one to seven years. Shorter terms come with larger payments while longer terms give you smaller payments (but you’ll pay more in interest over time).
  • Fees. Fees for unsecured loans can include application and origination fees as well as any ongoing annual or monthly fees. Double-check the fee schedule for your loan before you sign up to make sure you don’t end up paying more than necessary. Learn more about personal loan fees.
  • Repayment flexibility. Some lenders will charge you a penalty to pay your loan off early while others will let you make extra payments whenever you want. It’s always best to choose a lender that will let you prepay your loan for free wherever possible.
  • Eligibility criteria. Many lenders will have specific criteria such as a minimum income or credit score that you need to meet to qualify. Make sure you’re eligible for the loan you’re interested in before you take the time to apply.

Mistakes to avoid

  • Lying about what you need the funds for. Always be upfront with your lender about why you’re applying for the loan, whether it’s to pay for a vacation, cover business expenses or consolidate your debts.
  • Getting into too much debt. If you’re taking out an unsecured loan to consolidate existing debts, you should be wary of getting yourself into financial trouble by increasing your debt. Make sure you’ll be paying less in interest on your new loan than you’re currently paying on your cumulative debts.
  • Check that the lender providing your loan is licensed. Always make sure you’re getting a loan from a licensed lender. You can check the information at the very bottom of the website to see the lender’s details.
  • Fees and charges. Where possible, do your best to avoid excessive fees and charges. One way to do this is to make sure you do your research, ask questions and compare lenders to find the best deal.

How to apply for an unsecured loan

You can easily apply for an unsecured personal loan by following these steps:

Application process

  1. Fill out the application. Apply for the loan of your choice online or by visiting a lender in person. Most online applications take less than 10 minutes to fill out if you have all of the necessary information on hand.
  2. Input personal details. Provide personal and financial information such as your full name, date of birth, address, phone number, email and bank account details.
  3. Submit to a credit check. Authorize your lender to do a credit check so that they can determine your eligibility for an unsecured loan.
  4. Prove your income. Confirm proof of employment or income by providing pay stubs or bank account statements from the last 90 days.

Loan eligibility requirements

To qualify for an unsecured personal loan, you may need to meet the following eligibility requirements:

  • You must be at least 18 years old or the age of majority in your province or territory.
  • You’ll need to be a Canadian citizen or a permanent resident with a valid Canadian address and two valid pieces of identification.
  • You must be able to prove that you can pay off your loan by showing pay stubs, bank account statements and other relevant financial documents.
  • You’ll usually need to have a bank account to apply for a loan online.

What to consider before applying

Before applying for unsecured personal loans, it’s important to assess not only if you’re eligible but if it makes financial sense for you to apply for an unsecured loan.

  • Will you qualify for a loan? Avoid applying for loans that you know you can’t qualify for. Look at the eligibility criteria for the loan you’re interested in before you apply and make sure it’s a good fit.
  • Are you getting the best interest rates? It’s easy to apply and take the first loan you qualify for. Make sure you compare lenders to find the best deal so that you don’t get stuck paying more than you need to.
  • Can you afford to take on more debt? You might benefit from making a budget to see how much income you have to spare each month. This number should sit below the amount you’ll be required to put down for your monthly payments.
  • Do you have money put away for an emergency? You’ll usually want to make sure that you have an emergency fund set aside before you apply for a loan. This will help you avoid getting stuck in a cycle of debt that you can’t get out of.

Representative example: Taking out an unsecured loan

Vincent wants to take out an unsecured loan to renovate his new apartment. He needs around $5,000 to purchase supplies and pay an electrician to update some wiring. He starts by taking a look at his credit score – which sits at 720. This puts him in a good position to apply for a loan. He compares three different lenders to find the best deal.

Lender A

Lender B

Lender C

Amount borrowed

$5,000

$5,000

$5,000

Interest rate

3.1%

5.8%

4.8%

Loan term

5 years

3 years

2 years

Origination fee

5%

3.5%

No fee

Total upfront fees

$250

$175

$0

Total interest over 5 years

$403.95

$459.65

$253.83

Total repayment amount

$5,403.95

$5,459.65

$5,253.83

Monthly payment

$90.07

$151.66

$218.91

Customer rating

4 stars

3.5 stars

2.5 stars

After comparing a number of variables, Vincent decides to go with Lender A. With this option, he’ll have to pay his loan back over a longer period of time than he would with Lender B or C. That said, his payments will be more affordable in the long run and he’ll get a better customer experience than he might by choosing one of the other two lenders.

*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary.

How are unsecured loans different from secured loans?

The main difference between secured and unsecured loans comes down to how you apply for them and what happens if you default on your payments.

  • Unsecured personal loans. These loans rely heavily on your credit score to determine your eligibility for financing. If you default on your payments, your credit score will be negatively affected. They typically come with higher interest rates and it’s more difficult to apply with bad credit. These loans are for borrowers with good to excellent credit, or those who don’t own any assets.
  • Secured personal loans. Secured loans require you to use an item of value to secure the money you want to borrow. Your lender can repossess this item to cover its losses if you default on your payments. These loans tend to come with lower interest rates and they’re easier to qualify for if you have bad credit. They are best for people who own assets or have credit scores under 650.

Why is the interest rate higher on an unsecured loan?

Interest rates on unsecured loans are usually higher than for secured loans since your lender needs to take on more risk. Charging higher interest rates provides them with a financial cushion since they won’t be able to reclaim your assets to repay your loan if you default. You’ll typically pay the highest rates for unsecured personal loans for bad credit with instant decision in Canada.

Bottom line

Taking out unsecured loans can help you get access to the money you want to borrow without having to put up an asset as collateral. That said, you’ll usually need to have a decent credit score to apply and your credit could take a big hit if you default on your payments.

Frequently asked questions

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