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Unsecured personal loans

Get access to the funds you need without having to use an asset as collateral.

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unsecured loans

Unsecured personal loans let you borrow a lump sum of cash without having to put up collateral to secure your loan. Find out more about whether an unsecured loan is the right fit for you and compare providers to find the best deal.

Compare unsecured personal loans

Name Product Interest Rate Max. Loan Amount Loan Term Fees Min. Credit Score Link
Magical Credit Personal Loan
19.99% - 46.80%
6 months - 5 years
A single administration fee of $194 for $1,500 loans and up
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Magical Credit offers unsecured personal loans in amounts up to $20,000.
Mogo Personal Loan
9.90% - 47.42%
9 months - 5 years
NSF fee - $20 - $50
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Mogo offers loans up to $35,000 on flexible terms.
Loans Canada Personal Loan
Secured from 2.00%, Unsecured from 8.00% to 46.96%
3-60 months
No application or origination fees
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Loans Canada connects borrowers to lenders offering both secured and unsecured personal loans in amounts from $300 to $50,000. Submit one application to get rates from multiple lenders across Canada.
Fairstone Personal Loan (Unsecured)
26.99% - 39.99%
6 months - 5 years
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Fairstone offers unsecured personal loans up to $20,000
Cash Money Line of Credit
6 months - 5 years
Vary across provinces/territories
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Cash Money offers line of credit loans up to $10,000 fo AB and ON residents.
Cash Money Installment Loan
6 months - 5 years
Vary across provinces/territories
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Cash Money offers installment loans up to $10,000 for AB, MB and NB residents.
LendDirect Personal Loan
19.99% - 46.93%
No end dates
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Borrow up to $15,000, based on your income and credit history, with a personal line of credit from LendDirect.
LendingMate Personal Loan
43% (British Columbia and Ontario) and 34.90% (Quebec)
1-5 years
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LendingMate offers loans to Canadians with poor credit with no credit checks. Co-signer required for application.

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What is an unsecured loan?

An unsecured personal loan is a loan that lets you borrow money based on your credit score. Unlike a secured loan, it doesn’t require you to put up any kind of collateral to secure your loan. This means you won’t lose any of your assets if you can’t make your repayments. However, your credit score will be negatively affected if you default on your loan.

Unsecured loans are typically paid back in monthly installments over a specified period of time. You’ll usually need a good to excellent credit score to qualify if you want to get competitive interest rates. You’ll also typically need to settle for higher rates than you might get with a secured loan since your lender will need to take on more risk to finance you.

Features of unsecured personal loans

  • Interest rates. These can be fixed or variable, depending on what type of payments you want. Fixed rates give you consistent monthly payments that won’t change over time. Variable rates give you payments that go up and down in line with market conditions.
  • Loan term. Loan terms usually range between six months and seven years, 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 your credit score and which lender you decide to go with.
  • Minimum credit score. You’ll typically be required to have a minimum credit score of 600 or more to qualify for most personal loans. That said, you may be able to get a loan with a lower score if you’re willing to accept higher interest rates.

How unsecured personal loans work

Unsecured personal loans work just like any other installment loan. Once you get approved to borrow money, you’ll get a lump sum of cash deposited into your bank account. You can spend that money however you want as soon as it’s deposited. Just be aware that you’ll have to start making repayments on it straight away. You’ll also have to pay interest on the full amount that you borrow even if you don’t spend it all at once.

How is an unsecured loan different from a secured loan?

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.
  • 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.

Pros and cons of unsecured loans


  • 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 be decided by 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.


  • 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.

Compare secured vs. unsecured loans

How to compare unsecured loans

  • 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.
  • 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.

How to apply for an unsecured loan

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

Application process

  1. Fill out an application 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 and financial information as required. This can include your full name, date of birth, address, phone number, email and bank account details.
  3. Authorize your lender to do a credit check so that they can determine your eligibility for an unsecured loan.
  4. 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 you apply for an unsecured personal loan, you should carefully think about whether you can truly afford to take on more debt. To start, 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.

It’s important to be aware that if you default on your loan payments, you’ll take a significant hit to your credit score. This could make it harder for you to qualify for credit in the future. It could also lead you into a cycle of debt that’s difficult to get out of. That’s why 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.

Bottom line

Taking out an unsecured personal loan 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. Find out more about how unsecured loans work and apply today to get started.

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