How to Get a Personal Loan in Canada
A personal loan in Canada is usually unsecured. It has a fixed rate and a fixed payment. The term is 1–5 years, up to 7. Banks and credit unions serve people with strong credit. Online lenders approve a wider range of people, at higher rates. Newcomers can qualify by building Canadian credit history first. Or they can use newcomer banking programs, which lend based on foreign credit references.
At a glance
- Cost:
- Rates commonly range from ~7% to 35% APR depending on credit (35% is the federal criminal cap since Jan 1, 2025)
- Total time:
- Same-day to one week from application to deposit
- Steps:
- 6 steps
- Where to apply:
- antifraudcentre-centreantifraude.ca
Last reviewed October 2026 against official sources. Re-checked annually · next review due October 2027.
The Steps
Follow these in order
Each card shows the phase, expected time, and any cost. Data checked against official CAN sources(October 2026).
0 of 6 steps
- Before You Go 15 min
Check your credit score and history
It is free through Equifax (score + report via myEquifax) and TransUnion. TransUnion gives a free report, and a free score for Ontario and Quebec residents. Or use your bank's app. Big banks generally want 660+ for their best unsecured rates. A score of 620–660 moves you toward credit unions and mid-tier online lenders. Below 600, your options narrow to alternative lenders, and secured or co-signed loans. Is your score borderline? Pay your card balances below 30% of their limits. Do this for a month or two before you apply. It helps.
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- Go 1 hour
Pre-qualify with several lenders
Many Canadian lenders and brokers offer soft-pull pre-qualification. Examples are Loans Canada, LoanConnect, and several banks. It shows your rate without affecting your score. Compare banks (RBC, TD, Scotiabank, BMO, CIBC, National Bank). Compare your local credit union. Compare one or two online lenders too. Credit unions are often the most flexible, for newcomers and for average credit.
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- Fill / Prepare 20 min
Compare APR, term, and — in Quebec — the cap
Judge offers by APR and by the total cost of borrowing. Lenders must disclose both. Rates commonly run from around 7% for strong credit to about 35% from alternative lenders. Anything above 35% APR on a consumer personal loan is illegal. This is the federal criminal rate of interest, in force since 1 January 2025. In Quebec, the consumer-protection office also refuses to license lenders that charge above 35%. It treats such rates as abusive. Choose the shortest term whose payment fits your budget. Check that there are no prepayment penalties. Then you can pay extra freely.
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- Fill / Prepare 10 min
Decline loan insurance unless you have shopped it
Canadian lenders often offer creditor life and disability insurance on personal loans. The cost is often built into the payment. It costs well above term life insurance that you could buy on your own. The insurance is optional. You can refuse it when you sign. Do you want coverage? Compare a personal term policy first. It is usually much cheaper for the same protection.
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- Submit & Pay 1–7 days
Sign and receive funds
Approval can be same-day at online lenders. At banks, it takes a few days. Funds arrive by direct deposit, often within 24–48 hours of signing. Set your payment date for the day after payday. Set up automatic payments. One missed payment hits your credit file. It also hurts your renewal rates for years.
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- Follow Up 10 min
Watch for the fee-advance scam pattern
This is the classic Canadian loan scam. An "approved" lender demands an insurance fee, a deposit, or a "first payment". You must pay by e-Transfer or crypto, before the lender releases funds. Legitimate Canadian lenders never ask for money upfront to issue a loan. Check any lender with your provincial consumer affairs office, or with the FCAC. Report fraud to the Canadian Anti-Fraud Centre.
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Calculator
Personal Loan Payment Calculator (Canada)
Estimate your monthly personal loan payment, total interest, and payoff time — including any origination/admin fee and extra monthly payments.
Monthly payment
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Payoff time (months)
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Total interest
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Total cost (payments + fee)
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Estimate only. Estimate only. Assumes fixed APR, monthly payments, and no prepayment penalty. Your lender quote governs. Source: Standard loan amortization formula
FAQ
Frequently Asked Questions
Can newcomers to Canada get a personal loan?
Yes. But a thin Canadian credit history is the hurdle. Here are practical routes. Newcomer mortgage and banking programs at the big banks. Some lend based on foreign credit references and employment letters. Credit unions. They do more manual underwriting. A secured credit card or a credit-builder loan first. 6–12 months of history makes a real difference. Or a co-signer who is already established in Canada.
Secured or unsecured loan — which should I pick?
An unsecured loan needs no collateral. It is the standard choice. Rates are higher, because the lender carries all the risk. A secured loan is backed by a car, savings, or home equity. It is easier to get, and it costs less. But the asset is at stake if you default. If you qualify for an unsecured loan at a rate you can manage, keep your assets free of claims.
What rate should I expect?
Here is a rough guide. Excellent credit (720+) can find roughly 7–13% at banks and credit unions. Good credit (660–719) is around 13–20%. Fair credit (600–659) is 20–30%+ at online lenders. Below that, alternative lenders charge 30–35%. Anything above 35% APR on a consumer personal loan is illegal. This is the criminal rate of interest, in force since 1 January 2025.
Is a line of credit better than a personal loan?
A personal line of credit gives you flexibility. You draw as needed. You pay interest only on what you use. The rate is variable. A personal loan is a fixed lump sum, with a fixed end date. For a one-time known expense, and for payment discipline, the loan's fixed payoff date wins. For ongoing or unpredictable needs, with disciplined repayment, a LOC costs less in total interest.
How is a personal loan monthly payment calculated in Canada?
Payments use the standard loan amortization formula. It is based on the loan amount, the APR, and the term in months. The calculator shows your monthly payment, your total interest, and your payoff time. It also shows your total cost, including any origination or admin fee.
Do extra payments save interest on a Canadian personal loan?
Yes. Extra monthly payments reduce the principal faster, which cuts total interest and shortens the payoff time. Enter an extra payment in the calculator to see the effect. Confirm with your lender that no prepayment penalty applies.
What is an origination or admin fee on a personal loan?
It is a one-time fee. It is usually a percentage of the loan amount. The lender charges it for setting up the loan. The calculator adds it to your total cost. Then you can compare offers fairly.
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