The Most Affordable Personal Loans in Canada

Compare Personal Loans in Canada in 2018

Last updated on June 24, 2018 Views: 4521 Comments: 15

In an ideal world, you’d never need to borrow money. But we all fall a bit short once in a while. A personal loan can be the safest and least costly way of closing your financial gaps.

Personal loans in Canada are made only to individuals, and most banks and lending companies have conditions about what you can use a personal loan for. There are different types of personal loans, including secured, unsecured, and reverse loans (explained below). Personal loans can have terms and interest rates that vary widely, so read our personal loans comparison for the best personal loan rates in Canada.

Best Personal Loans in Canada in 2018

 Refresh FinancialBorrowellFairStoneLoanMeNowConsolidated
Loan Size$1,200-$5,500$1,000-$35,000$500-$30,000$500-$1,000Unspecified
Loan TypeCash secured savings loan UnsecuredUnsecured and securedUnsecured loan referralsUnsecured debt consolidation loans
Loan Term36 or 60 months3 & 5-year terms6-60 months for unsecured, 36-120 months for securedUp to 3 months36-60 months
APR Range7.26% to 29.95%5.6%-25%19.99%-39.99%28%-32%Unspecified
Minimum Credit ScoreNone 660None None None
Minimum IncomeNoneNoneNone givenNoneNone
FundingFrom 24 hours24-36 hoursUp to 24 hoursWithin 24 hoursA few days
Closing/Origination Fees$200-$4001-5%Unsecured loans: none. Secured loans: variableVariable brokerage feeUnspecified
Early Payment FeesN/ANoneUnsecured loans: none. Secured loans: variableNone None
Learn moreLearn moreLearn moreLearn moreLearn more

Why Get a Personal Loan?

There are many reasons why you might opt to take out a personal loan:

  • To make a down payment on a new home
  • To consolidate credit card debt
  • To pay for a vacation or a wedding
  • To cover medical expenses
  • To replace expensive household appliances
  • To buy a car
  • To fund home repairs or improvements

Who Is Eligible for a Personal Loan?

To be eligible for a personal loan in Canada, you must:

  • Be over age 18
  • Be a resident of Canada
  • Be the owner of a bank account
  • Have proof of identity, like your driver’s license, photo ID or passport
  • Have proof of residence, i.e., a recent utility bill
  • Have proof of income, like recent pay stubs
  • Have proof of your regular monthly expenditure, such as mortgage or rent payments, utility costs, etc.
  • Have some kind of Canadian credit history

Meeting the above requirements makes you eligible for Canadian personal loans in general. But to get the best interest rates and conditions, you’ll need:

  • A credit score that is average to excellent – ideally over 650
  • A low debt to income ratio, namely the percentage of your income that goes toward paying debt – your debt to income ratio should be below 36%
  • No history of bankruptcy

Personal Loan Interest Rates in Canada

When you compare personal loan rates to credit card rates, personal loan rates are almost always lower. Our recommended lenders have personal loan rates that begin at 5.6%. In contrast, average credit card rates begin around 20%. Of course, interest rates for personal loans can vary widely, so it’s important to compare personal loans in Canada.

Types of Personal Loans

Unsecured Loans

These are ‘unsecured’ because you don’t put up anything as collateral to guarantee the loan. If you default on payments, you don’t risk losing your collateral, but you generally need a better credit score and will pay slightly higher interest rates for an unsecured loan.

Secured Loans

For a secured loan, you’ll have to put something up as collateral such as your house, your car, or valuable jewelry. Secured loans often have lower interest rates, but you risk losing your collateral if you can’t make the loan payments.

Reverse Loan/Cash Secured Savings Loan

A cash secured savings loan is often called a ‘backwards loan,’ because you deposit the amount that you eventually want to borrow and then can withdraw that amount as a loan later . A reverse loan helps you build your credit score fast while saving a lump sum at the same time.

Compare Personal Loans in Canada

Borrowell

borrowellBorrowell provides fast unsecured personal loans of up to $35,000 with interest rates starting at just 5.6%. There are no prepayment fees and no loan fees apart from an origination fee, which is between 1-5% of your loan amount.

To take out a loan through Borrowell, you’ll just need to apply for your credit score through the Borrowell platform and share some personal information. If you’re eligible, you’ll receive a quote from Borrowell. All you’ll have to do is accept the quote, send proof of income, and verify your bank account – all online. If you’re not eligible, Borrowell sends suggestions of trusted partners who might be able to help you out.

Approved applicants will see the loan amount in their bank accounts as soon as the next business day.

Learn more about Borrowell personal loand here.

Refresh Financial

Refresh FinanicalRefresh Financial is a direct lender that offers only cash secured personal loans, also known as reverse loans, with APR rates of 7.26% to 29.95%. Its aim is to help you rebuild your credit and save money along the way so that you can qualify for the very best interest rates on unsecured personal loans, mortgages, or car loans after your Refresh Financial loan ends. You don’t have to have a good credit score or particular income level to qualify and you can set your loan amount of $1,200, $2,300, $3,200, or $5,500 and agree on terms of 36 or 60 months with your loan advisor.

A Refresh Financial reverse loan is not the same as regular unsecured or secured loans. You don’t borrow  a lump sum and then pay it back in installments. Instead, you begin by making regular monthly payments. These payments go partly towards a lump sum of savings, and partly to paying off a low level of interest. At the end of the loan period, you have a lump sum of your own money that you saved up, which you can then withdraw without the worry of having to repay it, and you also have an improved credit rating which shows that you made regular, on-time payments for a loan.

Learn more about Refresh Financial reverse loan here.

Fairstone

fairstoneFairstone is an online direct lender offering three types of loans—small unsecured loans up to $5,000, medium unsecured loans up to $20,000, or large secured loans up to $30,000. Fairstone’s unsecured loans have a term of 6 to 60 months, while the secured loan has a term of 36 to 120 months.

Fairstone’s interest rates can be fairly high—up to 36.99%—beginning at 19.99% for secured loans and 27.99% for unsecured loans. There are no fees on unsecured loans, although you might have to pay fees on a secured loan. To apply for a loan through Fairstone you’ll begin online, but you’ll need to complete the process over the phone.

LoanMeNow

LoanmenowLoanMeNow is a loan brokerage service that matches you with a direct lender who is best for your situation. You will have to pay a fee for the loan arrangement, and further fees are decided by the direct lender. LoanMeNow is also distinct in that it provides referrals for small loans of up to $1,000 with terms of up to 3 months.

LoanMeNow is ideal for anyone with poor credit, since qualification is based on income and not a credit score/history. It’s also fast, with funds deposited as quickly as within 24 hours. However, interest rates are between 28% and 32%, and there could be a lot of fees to pay depending on the direct lender you end up choosing.

Consolidated

ConsolidatedConsolidated offers unsecured debt consolidation loans as part of its debt consolidation program. Consolidated isn’t a direct lender, and you don’t really get a new loan—instead, it’s a renegotiation of your existing loans into one single loan. You pay one monthly payment to Consolidated, and it will use that to pay all of your various debt obligations.

Consolidated negotiates with your existing lenders to lower your rates—generally by 6% – 10%—and reclaim some fees. Loan terms and amounts depend on your debt situation, but terms are usually from 36 to 60 months, and the expert debt counsellors help you to find the lowest possible rates.

Article comments

15 comments
Karen Carlson says:

I need a $5000 loan

The GreedyRates Team says:

Hi Karen,

If you need a loan, then any of the banks listed in the above article will help you out. Just give them a call and inquire about a $5,000 loan, and they’ll find someone to serve you personally. We do not issue loans ourselves, but instead provide you with a comparison so that you can find the one that’s best for you. We recommend Grow, but also Borrowell if you’re looking for a low-cost alternative.

GreedyRates Staff

Armand G Laforest says:

Looking to bowrow 5000 for. Late payment

Trudy Wilson says:

I require a $20,000.00 loan until I sell my house.
I need to buy a house & my downpayment is close to $40,000.00. I have $20,000.00 at the moment.
Might you be able to help me with this personal loan?

GreedyRates says:

Hi Trudy,

GreedyRates does not issue loans itself. However, you can apply for a loan from one of the lenders featured on our site. Why not try to borrow from Borrowell or Grow? Better yet, do you have any available line of credit on your primary mortgage?

GreedyRates Staff

Andrew says:

Hey can i use a loan on a down payment for a house? are there any restrictions?

GreedyRates says:

Hi Andrew,

The cash is yours to do what you want with. That said, without knowing your financial situation, just make sure you have the monthly cash flow / income, to meet the monthly payments of your personal loan and your mortgage at the same time. There will be many housing expenses that may catch you by surprise if you’ve been a renter – such as municipal taxes, school taxes, possibly utilities and of course unexpected fixes. Leave yourself a little room.

GreedyRates Staff

Richard Monteith says:

I would like a 10000 dollar loan unsecured. I need the money to pay off debts.

GreedyRates says:

Hi Richard,

You will have to apply directly with one of the lenders above. Click through one of the links and get a free quote. If you get a quote at an interest rate and monthly payment you can afford, complete the application and you’re good to go!

Hope that helps,

GreedyRates Staff

Dee says:

I have had a very disappointing experience with Grouplend, now called Grow. They are not very transparent in their marketing. I got pre-approved with a personalized quote. Then I submitted all the documents they requested. Then no news from them. I emailed them and asked about the status of my application and they replied that “sorry, we cannot offer you a loan at this time”! I was dumbstruck as no where on their website do they mention that once, you have a personalized quote, you are still not certain to receive the loan. And I emailed back to ask on the basis of what was I not approved, they did not bother to reply. Very misleading! You don’t need a “hard hit” on your credit by going to Grow/Grouplend. Be careful is what I would recommend!

GreedyRates says:

Thanks for sharing your experience Dee. That does seem troubling. The whole point of the soft hit quote, is to avoid a decline that could negatively impact your credit score. Not sure what information their pre-approval/soft-quote system doesn’t capture that their final adjudication process does. Seems to be a gap their that is going to legitimately frustrate a lot of applicants.

Best,

GreedyRates Staff

Rosalie Skead says:

We would like to see if we could borrow up to 20,000 to pay off our credit cards

Rosalie Skead says:

I would like to pay off me and my husbands credit cards We need to borrow around 20,000. I am working and my husband is applying for disability

GreedyRates says:

Hi Rosalie,

We would first recommend trying to get a balance transfer credit card. A balance transfer promotional rate of 0% for 12 months with the MBNA platinum plus mastercard will be better than any personal loan or line of credit – nothing beats 0%. Of course make sure to make all your payments on time. You can only transfer up to 98% of your available credit line, so if you’re not given a high enough credit limit to transfer the entire $20,000, get a lower interest personal loan to paydown the rest.

Does that help?

GreedyRates Staff

Hyacinthe says:

You forgot to compare with Mogo, too.