Loans without a credit check
Image source: Shutterstock

Loans in Canada with No Credit Check

Advertiser Disclosure This article/post contains references to products or services from one or more of our advertisers or partners. We may receive compensation when you click on links to those products or services.
Last updated on May 27, 2022

Credit checks have become an expected prerequisite when applying for most financial products like loans, mortgages, or credit cards. But does that mean credit checks are absolutely necessary in order to borrow money? Not necessarily. In Canada there are many nontraditional borrowing options for people who want loans without an outside inquiry into their credit report.

Instead of reviewing a credit score to determine the creditworthiness of their potential borrowers, alternative lenders might use other methods which are just as effective, and less black and white. This helps to manage the risk that low-credit applicants tolerate when applying for a loan, as a weak score may not always represent them accurately and might result in a denial.

You may encounter online sites which allow you to input your loan preferences and then get matched with lenders that have already “pre-approved” you for the terms you see. Don’t be fooled, because after clicking on a lender’s offer, you’ll still be subjected to a hard or soft credit pull. Lenders offering real loans in Canada without a credit check will release funds without ever reviewing your report or even your score.

Pros and Cons of No Credit Check Loans

Pros:

  • You don’t need good credit to get a loan
  • Many methods for demonstrating creditworthiness

Cons:

  • Can be more expensive relative to traditional loans
  • Neglecting payments will push the debt to your guarantor or result in asset risk

How Do No Credit Check Loans Work?

Find a Guarantor

Many years ago, requiring borrowers to find a guarantor was one of the most common ways that any bank managed its risk of borrower defaults. If the person a lender lent money to couldn’t pay, then the guarantor was legally bound to pay instead, offering a second line of defence if the borrower wasn’t as creditworthy as initially claimed or estimated.

The same thing happens today, and if you have a reliable friend or family member to act as your guarantor, many financial organizations will ignore your credit score. The guarantor’s credit is relevant, however, and you should be sure to pay diligently if you don’t want them to be saddled with your debt.

Provide Supporting Documentation

Bank statements, payslips, and other hard proof of your financial status go a long way to confirming your creditworthiness with a lender. In many cases this information is enough to sway the lender against a credit check, as they’re able to see concrete evidence of your assets, regular salary, savings, and other crucial variables that ultimately form your ability to repay a loan.

A look at these financial docs will indicate to lenders if your monthly cash flows have enough extra room for an additional obligation. And these lenders will often ask you to upload documents or quickly link your bank account data during the application process for the loan. In place of a credit check, they’ll do an internal diagnosis and use only what you’ve uploaded, emailed, or faxed them to make a determination.

Decide on a Secured or Unsecured Loan

Another way to obtain a no credit check loan in Canada is by securing it with the assets you already own, like a house, a vehicle, or other investments. Lenders have a lot less to worry about if you agree to let them take something with tangible value should you fail to repay a loan, so there’s no need for them to do a credit check. All they require is your agreement to put up the asset as collateral, and proof that it exists and belongs to you.

An unsecured loan, on the other hand, often requires a credit check because the bank can’t immediately recoup their loss if the loan goes unpaid. Credit checks allow them to be more confident that this won’t happen. Getting loans secured by your assets should be considered carefully, because if you lose them in the event of a default, you would likely be worse off than if you hadn’t obtained the loan in the first place.

Where Can I Get a Loan in Canada with No Credit Check?

 Loan AmountAPR RangeReview
LoanMeNow.ca$300–$100028%–32%Learn More
FlexiLoans.ca$200 - $1,20025.0%–32%Learn More
TitleLoansOnline.ca$2,000 - $25,00014%–32%Learn More

LoanMeNow.ca

Apply Now

Eligibility Requirements:

– Canadian resident age 18 or older
– Net salary of at least $1200.00 per month after taxes
– Must have a Canadian bank account and receive salary via direct deposit
– Employed with the same employer for at least two months prior to application
– Not currently in or planning to declare a bankruptcy or a consumer proposal
– Self-employed typically ineligible

Montreal-based LoanMeNow.ca is a loan aggregator/broker that matches borrowers looking for small, short-term loans to potential lenders. It’s a good place to turn to for those with poor credit scores, because many of the lenders in its database evaluate loan applications based on an applicant’s overall financial status, without doing a credit check. To qualify for a loan, would-be borrowers will need to provide a lender in the LoanMeNow.ca network with financial documentation including recent bank statements, pay stubs, a voided check or signed direct deposit authorization form from a bank, etc. Applications are reviewed by a human being, not by an algorithm; approvals are usually available within one hour of application, and funds typically dispersed within 24 hours of approval.

LoanMeNow.ca’s partner lenders provide unsecured loans between $300–$1000, with a standard repayment term of about 3 months and payments automatically debited from the borrower’s bank account. Partner lenders may charge varying fees for administering the loan or penalties for delayed or returned payments. That said, interest rates are between 28%–32% APR, which is relatively low for no credit check lenders.

  • Unsecured loans between $300–$1000
  • Fast approval and release of funds
  • Fees vary by individual lender

Apply to LoanMeNow.ca

FlexiLoans.ca

FlexiLoansEligibility Requirements:
– Age of provincial majority
– Proof of at least $300 weekly income
– Proof of holding the same job for at least 3 months
– Valid phone number and email address

For smaller loans between $200 and $1,200, FlexiLoans is an online lender that uses a process called IBV to approve applicants for loans without checking their credit score. IBV means Instant Banking Verification, and with a safe and secured link to your bank account, FlexiLoans is able to get the data it needs to make an informed decision fast. This suits those with poor credit well, as credit bureaus are left completely out of the equation.

Borrowers will simply fill out a quick form, go through the IBV process, and then a representative from FlexiLoans will get in touch before sending funds in as little as an hour after approval. Applicants must be the age of majority, a Canadian resident, have a bank account and steady income, and a valid phone number. Borrowers are free to repay the loan early without penalty.

  • No credit check loans up to $1,200
  • Same-day approval and funding via IBV system
  • Flexible repayment terms

TitleLoansOnline.ca

TitleLoansOnlineEligibility Requirements:
– Vehicle model year 2010 or newer, with less than 210,000 km

– Vehicle must be fully paid for and registered to you
– Title must be Active, not Rebuilt or Repaired
– Must have full insurance coverage policy

Providing title loans secured by your vehicle, TitleLoansOnline is a lender that regularly approves loan applicants with bad or no credit. By using your car as collateral, you can get up to $25,000 from TitleLoansOnline in as little as a day without a credit check, featuring interest rates that are as low as those you’d find on a credit card and flexible terms between 2 and 5 years.

This type of no credit check loan can be obtained by filling out the confidential application, uploading some photos of your vehicle (models as old as 2010), and providing supporting bank and identification documents. Equity in your vehicle is easy to capitalize on, requires no credit pull, and results in open loans, which are payable prematurely for no extra fees.

  • Fast and affordable loans up to $25,000 secured by your car
  • Pay back the loan before maturity with no penalty
  • Terms between 2 and 5 years with APR similar to credit cards

Alternatives to No Credit Check Loans

For the privilege of avoiding a credit check, applicants for no credit check loans provide different forms of assurance to their lenders: someone to make their loan payments in the event that they cannot; collateral in the form of their home or vehicle; and/or heaps of extra documentation. Prospective borrowers who can’t meet these requirements might consider one of the below options instead of a no credit check loan.

Lenders Specializing in Low-Credit Borrowers

There are online lenders who specialize in poor credit loans, largely making your score (even if it’s checked) a non-issue. Online lenders, and many physical banks as well, offer debt consolidation loans in addition to regular low-credit personal loans which don’t require a perfect financial history. These lenders might offer better interest rates than the no-credit-check lenders on the list above.

Your Local Credit Union

Because credit unions are meant to be nonprofit businesses with a primary purpose of lending to their community, they have an existential purpose to help low-credit locals. Banks, being for-profit companies, must check your credit and scrutinize it heavily to see if they’re likely to make or lose money from your loan. For Canadians with weaker credit, a credit union in their area could help significantly because there is no profit incentive—just the incentive to help.

Friends and Family

Getting a guarantor is already a matter of finding someone you trust, and someone who trusts you. It’s likely this person would be a close friend or family member, so why not ask them for a loan instead? Some may be more comfortable with being your lender rather than a guarantor, as banks are then removed from the equation entirely. They can therefore choose whether to charge interest and impose other terms or simply rely on your goodwill.

A Check Isn’t Mandatory

Credit checks are part of a system intended to help both lenders and borrowers, but they aren’t always required to establish a connection between them. There are a multitude of ways to obtain a no credit check loan in Canada, but it’s crucial to weigh the pros and cons of taking one out before you apply.

Author Bio

Nate Siegel
Nathan Siegel has a professional and educational passion for finance, and is a long-time writer for GreedyRates. He follows trends in the Canadian banking sector, compares competing products, and pores over fine print to make personal finance choices easier for Canadian consumers. In his spare time he loves running, swimming, and dogs of all kinds.

Article comments