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RRSP loans

Find out how you can maximize your retirement savings and save money on income tax with an RRSP loan.

If you’re still young (or young at heart), then you might be pushing off thoughts of retirement to focus on other priorities. But the truth is, it’s never too early to start saving. If you’re looking to get the ball rolling or you simply want to max out your RRSP contribution room to save money on taxes, then it could make sense to take out a loan.

Find out more about what types of RRSP loans are available in Canada and learn more about how you stand to benefit from taking one out.

What is an RRSP loan?

An RRSP loan works just like any other loan: you borrow a lump sum of money that you’re required to pay back over a certain period of time. The main difference is that the money you borrow will go directly into your RRSP account rather than being used to pay off a large purchase (such as a house or vehicle). These loans are also typically shorter than regular loans and may come with lower interest rates.

Many Canadians take out RRSP loans strategically to save money on taxes. This is because any money you put into your retirement account before the RRSP deadline is deducted from your annual taxable income. With a lower income, you could qualify for a lower tax bracket and are more likely to get a much better return on your taxes.

For example, let’s say you make $50,000 for the year, with a 15% tax bracket for your first $45,000 and a 20% tax bracket on the last $5,000. If you put that $5,000 into an RRSP, you would be exempt from paying tax on it. This means you would earn back the 20% you paid on it, which would amount to a tax return of $1,000.

What types of RRSP loans can you get in Canada?

There are a couple of different types of RRSP loans on offer. The golden rule is to aim for the loan that will give you the lowest interest rates over time.

  • Secured loans. It may be possible to get approved for a larger loan with lower interest rates if you put up an asset (like your home or vehicle) to secure your loan payments.
  • Unsecured loans. Unsecured loans allow you to borrow money against your credit score instead of collateral, but your score will go down if you fail to make repayments.
  • Peer-to-peer loans. These loans offer an innovative and mostly online approach to lending. With peer-to-peer lending, you borrow money from private investors rather than institutions.

Compare personal loans

Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
LoanConnect Personal Loan
Secured from 1.90%, Unsecured from 9.90%-46.96%
$500 - $50,000
3 - 120 months
Currents debts must total less than 60% of income
Min. credit score: 300
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More Info
An online broker who helps inform clients towards better finances. Get pre-approved by different lenders for unsecured or secured loans in 5 minutes with any credit score.
ConsumerCapital Personal Loan
19.99% - 32.99%
$1,500 - $12,500
24 - 60 months
Min. income of $1,900 /month, 6+ months employed
Min. credit score: 540
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More Info
An online lender that provides fast unsecured personal loans. Complete an application in less than 10 minutes and get a decision within 24 hours.
Spring Financial Personal Loan
17.99% - 46.96%
$500 - $15,000
9 - 48 months
Min. income of $1,800 /month, 3+ months employed
Min. credit score: 400
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More Info
An online lender offering unsecured personal loans and credit builder loans. Those filing for bankruptcy or a consumer proposal can also apply. If you're not eligible for an unsecured loan, you may be offered a loan to help rebuild your credit.
goPeer Personal Loan
8.00% - 31.00%
$1,000 - $25,000
36 - 60 months
Min. income of $15,000 /year
Min. credit score: 600
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More Info
Canada's first regulated consumer peer-to-peer lending platform offering unsecured loans. Connects creditworthy Canadians looking for a loan with Canadians looking to invest. goPeer strives to offer the most competitive interest rates. Apply in minutes and get a response within 24 hours.
Loans Canada Personal Loan
Secured from 2.00%, Unsecured from 8.00% to 46.96%
$300 - $50,000
3 - 60 months
No min. income or employment requirements
Min. credit score: 300
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More Info
An online broker with the largest lender network in Canada. Get matched for free with lenders offering both unsecured and secured loans through one quick application regardless of your financial situation.
SkyCap Financial Personal Loan
12.99% - 39.99%
$500 - $10,000
9 - 36 months
Min. income of $1,200 /month, stable employment
Min. credit score: 550
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More Info
An online lender offering unsecured personal loans to borrowers with a wide range of credit scores. Apply in less than 5 minutes and if approved, receive financing in as little as 24 hours.
FlexMoney Personal Loan
18.90% - 46.93%
$500 - $15,000
6 - 60 months
Min. income of $2,000 /month, 3+ months employed
Min. credit score: 500
More Info
An online lender offering flexible unsecured loans. Apply in less than 10 minutes and if approved, receive financing in as little as 24 hours. Pay off your loan at any time.
Mogo Personal Loan
9.90% - 46.96%
$200 - $35,000
6 - 60 months
Min. income of $13,000 /year
Min. credit score: 500


Mogo offers a 100-day money-back guarantee. If you're not happy with your loan, pay back the principal and get your 100 days of paid interest and fees back.
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An online lender who aims for a hassle-free process through same-day unsecured loan approval and funding. Get a loan fast and track your credit score for free.
Fairstone Personal Loan (Unsecured)
26.99% - 39.99%
$500 - $25,000
6 - 60 months
Able to make monthly repayments on your loan
Min. credit score: 560
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More Info
An online lender with a team dedicated to professional service. Get a quote for an unsecured loan without impacting your credit score. Receive funds within as little as 24 hours. No prepayment fees.
Loan Away Personal Loan
19.90% - 45.90%
$1,000 - $5,000
6 - 36 months
No min. income or employment requirements
Min. credit score: 300
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More Info
A lender that approves unsecured loans in as little as 20 minutes. Get affordable monthly repayments with any credit score.
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Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
LoanConnect Personal Loan
Secured from 1.90%, Unsecured from 9.90%-46.96%
$500 - $50,000
3 - 120 months
Currents debts must total less than 60% of income
Min. credit score: 300
Go to site
More Info
An online broker who helps inform clients towards better finances. Get pre-approved by different lenders for unsecured or secured loans in 5 minutes with any credit score.
Loans Canada Personal Loan
Secured from 2.00%, Unsecured from 8.00% to 46.96%
$300 - $50,000
3 - 60 months
No min. income or employment requirements
Min. credit score: 300
Go to site
More Info
An online broker with the largest lender network in Canada. Get matched for free with lenders offering both unsecured and secured loans through one quick application regardless of your financial situation.
Fairstone Personal Loan (Secured)
19.99% - 23.99%
$5,000 - $50,000
36 - 120 months
Must be a homeowner
Min. credit score: 560
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More Info
Use your home equity to get a secured loan up to $50,000 with flexible repayment options and a long loan term. Get a quote without impacting your credit score.
Alpine Credits Home Equity Loan
10.00% - 22.99%
$10,000 - $500,000
Up to 60 months
Must be a homeowner
Min. credit score: 300
Check eligibility
More Info
Alpine Credits offer home equity loans in amounts from $10,000 to $500,000. Must be a homeowner to qualify. Check eligibility for this loan through LoanConnect.
Loans Canada Vehicle Title Loan
Loans Canada Vehicle Title Loan
0% to 29.99%
$500 - $35,000
3 - 96 months
Min. income of $1,800 /month, 3+ months employed
Min. credit score: 300
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Get access to financing from multiple lenders across Canada through a single application with Loans Canada. Bad credit, CERB and EI borrowers are considered.
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What is the limit for your RRSP contribution each year?

The maximum amount you can put into your RRSP varies year by year and is based on your income. The current RRSP contribution limit is 18% of the income you reported on your tax return last year, up to a maximum of $26,500. If you haven’t maxed out your contribution limit in previous years, you’ll also have what’s called “carry-forward” contribution room.

You can find out how much contribution room you have by looking at your Notice of Assessment from last year. You can also register for My Account with CRA to view your RRSP limit, track your refund, make updates to your return and monitor payments.

Strategize your RRSP loan to make the maximum contribution

If you want your RRSP loan to help you generate a tax savings without costing you more money in the long run, you should follow these basic steps.

  1. Look for the lowest interest rates. Find an interest rate that sits below 5% if you want to generate a profit with your tax return.
  2. Search for a short-term loan. Aim to pay off your loan in less than six months so that you don’t lose money on interest.
  3. Avoid lenders that charge fees. Look for a lender that doesn’t bake hidden fees and charges into your contract.
  4. Only borrow what you need. Borrow just enough money to maximize your RRSP contribution, and make sure you have the ability to repay what you borrow.
  5. Pay off your loan with your tax return. Plan to use the tax return you get back to put a big dent in your loan payments.

What can I do if I over-contribute to my RRSP?

If you exceed your maximum RRSP contribution, you may be charged a penalty by the Canada Revenue Agency (usually for any contribution over $2,000). The money you put in also can’t be used to lower your taxable income and therefore won’t save you money on your tax return.

To figure out if you’ve over-contributed to your RRSP, you should check your CRA account or your Notice of Assessment. If you put too much money into your RRSP – don’t worry. There are a few measures you can take to correct the situation.

  • Get in touch with the CRA. Phone the CRA and ask how you can avoid a penalty. You may want to explain to them that you over-contributed by accident and would like some advice on next steps.
  • Remove excess funds. Withdraw the money you over-contributed and send a letter to the CRA along with a form showing the date you removed the excess funds.
  • Pay the penalty quickly. If you decide to pay the 1% tax on your over-contribution, you’ll need to fill out an Excess Contributions Form and send it in to the CRA. And be sure to act fast because if you don’t pay the tax in 90 days, it will go up to 6%.

What are the benefits of RRSP loans?

  • Maximize your income tax return. If you bring down your taxable income with your RRSP contribution, you could be eligible to get thousands back on your tax return.
  • Get into a lower tax bracket. You may be able to offset income charged at a higher tax rate by contributing to your RRSP.
  • Save more money for retirement. You’ll end up with a larger contribution to your RRSP in the end, which means you’ll have more to live on when you retire.

Bottom line

If you want to get a bigger tax return while contributing to your retirement savings, then you might like to consider an RRSP loan. Find out whether you’re eligible and compare lenders to get a loan that meets your needs.

Frequently asked questions

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