If you need a personal loan, your first port of call will probably be your bank. It’s quick and easy to apply for a loan if you’re already a customer, and bank personal loans offer low rates and large loan amounts for people with good to excellent credit. Just be aware that banks have strict loan eligibility criteria, so you won’t be able to qualify if you have bad credit.
The following are some of the main advantages of taking out a personal loan from your bank:
| Lender | Loan amount | Loan term | Interest rate | |
|---|---|---|---|---|
 | Not disclosed | 1 - 5 years | 7.20% - 14.20% | |
 | $5,000–$50,000 | 1 - 7 years | Not disclosed | Read review |
 | Not disclosed | 1 - 5 years | Not disclosed | Read review |
 | $3,000 to $200,000 | 1 - 5 years | Not disclosed | Read review |
 | $2,000+ | 1 - 5 years | Not disclosed | |
 | Not disclosed | Up to 5 years | Not disclosed | Read review |
| Response | Gen Z | Gen Y | Gen X | Baby Boomers |
|---|---|---|---|---|
| Reputable lender | 23.43% | 19.43% | 21.55% | 31.78% |
Here’s what you need to do to apply for a personal loan from a bank:
You can apply online, over the phone or at a branch. You’ll need to provide your personal details, contact information, income and employment details, and your desired loan amount. If you’re already a bank customer, they’ll already have your personal details on file to speed up the application process.
The bank will contact you within 48 hours to organize the next steps.
You’ll need to have an interview with a loan specialist either in person or over the phone. Though you may not be asked for all of these, have the following documents ready to ensure the process runs smoothly:
Getting an offer can take a few days to a few weeks because the loan underwriter will need time to assess your application. Getting a personal loan that involves collateral, such as your house, will take longer than getting a loan with no collateral.
Review the loan contract carefully. Take into account your payment schedule and the loan’s overall cost, then sign on the dotted line.
Once the paperwork is complete, the loan funds will be deposited directly into your bank account within a business day or two.
If you want to get a personal loan from a bank, you’ll need to meet the following requirements:
If you don’t qualify, you may want to consider applying for a personal loan from a credit union, online lender or P2P lender.
There are a few options to choose from when you apply for a bank personal loan in Canada:
Banks have stricter personal loan eligibility requirements than other lenders. Here are some of the key requirements that can help boost your chances of approval.
Your DTI reflects the percentage of your monthly income that goes towards paying off your existing debts. If your DTI ratio is less than 40%, your chances of getting approved increase.
Your net worth is a figure that expresses your assets vs your debts. If you have a positive net worth – i.e. you own more than you owe – and if your net worth is higher than the loan amount you’re applying for, you’re more likely to get approved.
If you’ve been employed long term in a salaried position, you’re more likely to get approved than someone who can only show a record of short-term contract employment. You’ll also be a more attractive prospect to the lender if you work for an established, well-known employer rather than a new startup.
If you’ve got multiple inquiries on your credit file in a short amount of time, this will not only hurt your credit score but also make you look like a risky prospect in the eyes of a lender. That’s why it’s a good idea to keep credit applications to a minimum.
If you’ve had a previous debt sold to a collection agency or you’ve been late in making payments in the past, this makes you look like a high-risk borrower. If you need to be late with a debt payment, be proactive – let the creditor know in advance and discuss options with them. This may prevent a negative effect on your credit and also shows potential lenders that you handle your finances responsibly.
If you provide collateral for a loan, for example if you use your investments or home, this reduces the level of risk for the bank. This increases your chances of approval and will also allow you to access higher loan amounts, but your collateral could be repossessed if you default on the loan.
A guarantor loan is co-signed by a third party who agrees to pay off the loan if you can no longer keep up with repayments. This type of loan may be an option if you need a bit of a boost to maximize your chances of approval, but if you have poor credit, even getting a guarantor won’t be enough to get approved by a bank.
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