What is a personal loan?

Learn about your financing options and how you can apply for a personal loan.

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If you’re looking to make a big purchase, a number of small purchases or consolidate existing debt, you might wonder if a personal loan is the right choice for you. Not all loans are made equal – so familiarize yourself with your financing options before jumping into the application process.

Mogo Personal Loan

Mogo Personal Loan

From

5.9 % p.a.

rate

  • Borrow from $2,000
  • Simple online application
  • Free credit score upon account creation

Mogo Personal Loan

Apply today to get approved for a personal loan up to $35,000 on flexible terms.

  • Max. loan amount: $35,000
  • Loan term: 1-5 years
  • Turnaround time: Same day
  • APR: 5.90% - 46.96%
  • Fees: NSF fee - $20 to $50
  • Quick pre-approval
  • Automatic payments
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What is a personal loan?

A personal loan is money you borrow from a financial institution. Both the principal and interest must be repaid by the end of the loan term, which is usually between one to seven years. You may be able to borrow from $1,000 to over $100,000 depending on your finances and creditworthiness.

You can usually find personal loans offered by online lenders, brokers, banks, credit unions and peer-to-peer lenders.

Compare personal loans

Name Product Interest Rate Max. Loan Amount Loan Term Fees Min. Credit Score
26.99% - 39.99%. Varies by loan type and province
$20,000
6 months - 5 years
None
N/A
Fairstone offers unsecured personal loans up to $20,000
19.99% - 35.00%
$12,500
12 months - 5 years
None
N/A
Online lender offering personal loans from $500 up to $12,500.
5.90% - 46.96%
$35,000
1-5 years
NSF fee - $20 to $50
540
Mogo offers loans up to $35,000 on flexible terms.
18.90% - 54.90%
$10,000
1-5 years
None
550
An established online lender with loans up to $10,000. Now accepting applicants on El and Social Assistance.
46.93%
$10,000
6 months - 5 years
Vary across provinces/territories
N/A
Cash Money offers installment loans up to $10,000 for AB, MB and NB residents.
19.99% - 46.93%
$15,000
No end dates
None
N/A
Borrow up to $15,000, based on your income and credit history, with a personal line of credit from LendDirect.
43% (British Columbia and Ontario) and 34.90% (Quebec)
$10,000
1-5 years
None
N/A
LendingMate offers loans to Canadians with poor credit with no credit checks. Guarantor required for application.

Compare up to 4 providers

What can I use a personal loan for?

Personal loans can help you in a variety of different situations, including:

How can I compare personal loans?

There are two main factors to consider when comparing personal loans:

  • Fixed vs. variable rate. Ask your lender how it intends on calculating interest. Fixed-rates guarantee a certain interest rate over the life of the loan, while variable-rates can fluctuate based on the market. Some loans may use both, so it’s important to note which yours uses so you can plan your repayments.
  • Secured vs. unsecured. When comparing loans, ask if you need to put up an asset as collateral. A secured loan requires collateral but will generally have better terms. On the other hand, an unsecured loan doesn’t require collateral and will usually have less competitive terms, but you don’t risk losing an asset if you default.

How can I get a personal loan?

Once you’ve found the right personal loan for your spending needs and financial situation, it’s time to apply. Here’s what you need to know before you submit your application.

  1. Check if you’re eligible. The eligibility criteria provided by lenders is usually the minimum they will accept, so you must meet the minimum age, income, residency, credit score and employment requirements. The lender may also have restrictions on what you can use your loan for. If you don’t meet the criteria, you probably aren’t eligible for the loan.
  2. Confirm the loan is right for you. Can you apply for the amount of money you need? Will you receive your loan in time? Will you be offered terms, fees and rates that meet your budget? If you can’t get the terms you want and can afford, it’s better to consider your other financing options.
  3. Find out what documents you need. The majority of lenders let you submit your documents and complete the entire loan application online. You may need digital copies of your ID, employment and financial documents to send to the lender to verify the information you provide in your application.
  4. Submit your application and wait for approval. If you submit your application online, you’ll usually receive a response quickly. Some lenders will tell you within a few minutes if you’ve been approved, while others may take a few days or even weeks to process your application.

Frequently asked questions

Pictures: Shutterstock

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