{"id":1038255,"date":"2024-05-15T12:12:55","date_gmt":"2024-05-15T16:12:55","guid":{"rendered":"https:\/\/www.finder.com\/ca\/?p=1038255"},"modified":"2025-05-22T16:11:42","modified_gmt":"2025-05-22T20:11:42","slug":"installment-loans","status":"publish","type":"page","link":"https:\/\/www.finder.com\/ca\/personal-loans\/installment-loans","title":{"rendered":"Installment loans: What are they and how do they work?"},"content":{"rendered":"

If you\u2019re looking for an installment loan, there are plenty of options available in Canada for good and bad credit. Plus, you can get one as soon as today. Interest rates, loan amounts, loan terms, eligibility criteria and other factors vary with installment loans, so carefully compare providers to find the best loan option for you.<\/p>

In this guide, we\u2019ll explore how installment loans work, including pros and cons and how you can use funds.<\/p>

What are installment loans?<\/h3>

Installment loans are unsecured personal loans offered by alternative lenders. Unlike personal loans from traditional lenders like banks and credit unions, installment loans have more lenient eligibility criteria. This means you may still be able to qualify for a loan even if you have bad credit.<\/p>

Loan amounts and terms vary depending on the lender. You can typically borrow amounts ranging from $500 to $10,000, but some lenders let you borrow up to $25,000 or even $50,000. You can repay your loan over a term ranging from 3 - 60 months.<\/p>

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\nMust read: <\/span>Best installment loans<\/a>\n<\/div>\n<\/article>

How do installment loans work?<\/h3>

When you take out an installment loan, you borrow a lump sum of money that is deposited into your bank account. Because the loan is unsecured, you don\u2019t need to provide any assets as collateral.<\/p>

You then pay back the loan amount plus interest in installments, making regular payments on a monthly, bi-weekly or weekly basis. Interest rates are usually fixed, which means your payment amount will be the same each time. However, installment loans typically have lenient eligibility requirements and subsequently come with higher rates than traditional personal loans.<\/p>

Some lenders will also charge administration and brokerage fees to set up your loan. If you miss a payment, NSF and late payment fees might apply.<\/p>

Finally, you can repay your loan early if your budget allows. Many alternative lenders let you pay off your loan early without penalty, but be sure to check your contract first.<\/p>

Where do I get an installment loan?<\/h3>

Installment loans are offered by alternative lenders across Canada. You can apply for a loan online, while many lenders will also allow you to verify your identity and income online as well. If you\u2019re approved, funds will be sent to your bank account by direct deposit or e-Transfer.<\/p>

However, some installment loan lenders also offer storefront locations where you can apply in person if you prefer.<\/p>

Compare installment loans<\/h3>
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