Bad credit can feel like a wall standing between you and the money you need. Maybe life threw something at you — a job loss, a medical bill, a divorce — and your credit score took the hit. It happens to more Canadians than you'd think. According to Equifax Canada, millions of Canadians carry a credit score below 660, which most traditional banks classify as "subprime."
But here's what the banks won't tell you: a low credit score does not automatically mean you can't get a loan. It just means you have to go to the right place. And that place is Smarter Loans.
Unlike a bank, which checks one set of rigid criteria and sends you on your way if you don't qualify, Smarter Loans uses proprietary technology to match your application to over 50 verified Canadian lenders — each with their own approval criteria. Some lenders specialize in exactly the situation you're in. Our platform finds them for you, automatically, in minutes.
What Counts as "Bad Credit" in Canada?
Credit scores in Canada run from 300 to 900, calculated by the two major credit bureaus: Equifax and TransUnion. Most lenders use these scores as a starting point, but not all treat them the same way.
| Score Range | Rating | Typical Bank View | Smarter Loans Network |
|---|---|---|---|
| 760 – 900 | Excellent | ✔ Best rates | ✔ Many options |
| 725 – 759 | Very Good | ✔ Good rates | ✔ Many options |
| 660 – 724 | Good | ✔ Usually approved | ✔ Many options |
| 560 – 659 | Fair / Subprime | ✘ Often declined | ✔ Specialist lenders |
| Under 560 | Poor | ✘ Usually declined | ~ Secured / guarantor options |
🎚️ Check Your Credit Range
Move the slider to your estimated score and see what it means for your loan options.
Why Traditional Banks Often Say No (And What to Do Instead)
The big five Canadian banks — RBC, TD, BMO, Scotiabank, CIBC — are built for borrowers with established, clean credit histories. Their approval systems are largely automated, and if your score falls below their threshold, the application is declined before a human ever looks at it.
That's not a flaw in your character. It's a flaw in how rigid, one-size-fits-all systems work.
Alternative and online lenders operate differently. They assess risk more holistically, considering factors like:
- Your income and employment stability (even recent employment counts)
- Your debt-to-income ratio
- Your banking history — consistent deposits signal reliability
- The reason for the loan — debt consolidation, for example, is often viewed favourably
- Whether you have a co-signer or collateral
Ready to find out what you qualify for?
Apply once through Smarter Loans. Our technology does the searching across 50+ lenders — so you don't have to.
Check My Options — It's Free →Types of Personal Loans Available with Bad Credit in Canada
Not all bad-credit loans are the same. Here's what's typically available through the Smarter Loans network:
1. Unsecured Personal Loans
No collateral required. Lenders take on more risk, so rates are higher than prime loans — but for borrowers with fair credit (560+), these are often accessible through our specialist lending partners. Amounts typically range from $500 to $35,000.
2. Secured Personal Loans
You pledge an asset (car, savings account) as collateral. Because the lender's risk is reduced, these often come with lower rates and higher approval odds — even for very poor credit.
3. Guarantor Loans
A creditworthy friend or family member co-signs. If you don't repay, they're on the hook — so choose your guarantor wisely, and only use this option if you're confident in your ability to repay.
4. Debt Consolidation Loans
If you're juggling multiple high-interest debts, a debt consolidation personal loan bundles them into one lower monthly payment. Lenders often look favourably on consolidation because it demonstrates financial awareness. Read more in our guide: Personal Loans vs. Credit Cards: Which Is Right for You in 2026?
5. Credit-Builder Loans
Less about the cash, more about rebuilding your score. Repayments are reported to the credit bureaus, gradually improving your standing. Several lenders on our platform offer these.
Pros & Cons of Getting a Bad-Credit Personal Loan
✅ Pros
- Access to funds even with poor credit history
- Fixed repayment schedule — predictable budgeting
- On-time payments rebuild your credit score
- Can consolidate high-interest debt at a lower rate
- Smarter Loans finds the best match across 50+ lenders instantly
- Faster than applying to multiple banks individually
❌ Cons
- Higher interest rates than prime loans (reflects lender risk)
- Smaller loan amounts may be offered initially
- Some lenders charge origination or NSF fees — always read the terms
- Missing payments further damages your credit
- Co-signed loans put the guarantor at risk
How to Apply for a Bad-Credit Personal Loan Through Smarter Loans
The Smarter Loans application process is designed to be fast, simple, and transparent — and it's 100% free to use. Here's exactly how it works:
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1Submit One Application Visit smarter.loans/pre-apply and fill in your details — takes about 3 minutes. You'll share basic information: income, employment status, loan amount needed, and credit range.
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2Our Technology Gets to Work Smarter Loans' proprietary platform evaluates your profile against the underwriting criteria of 50+ lenders in real time. We don't just spray your application everywhere — we route it intelligently to lenders most likely to approve you.
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3Review Your Matched Offers You'll see loan options with transparent rates and terms — no hidden fees, no guesswork. Compare them at your own pace.
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4Choose the Right Offer & Get Funded Select the loan that works for your situation. Many of our lenders fund within 24–48 hours. Some offer same-day funding for urgent needs.
🧭 Quick Quiz: Which Loan Type Fits Your Situation?
What Interest Rate Should You Expect with Bad Credit?
Let's be direct: bad-credit loans cost more. That's the lender's compensation for taking on higher risk. But "higher" doesn't mean you should accept any rate without shopping around — which is exactly why the Smarter Loans network matters.
| Credit Score | Typical Rate Range (2026) | Typical Loan Amount | Best Strategy |
|---|---|---|---|
| 660+ | 9.99% – 19.99% | Up to $35,000 | Compare multiple offers; strong negotiating position |
| 560 – 659 | 19.99% – 29.99% | $500 – $15,000 | Use Smarter Loans to find specialist lenders; consider consolidation |
| Under 560 | 29.99% – 46.96% | $300 – $5,000 | Secured or guarantor loan; prioritise rebuilding credit |
How to Improve Your Chances of Approval
Even before you apply, a few moves can meaningfully improve your odds and the rate you're offered:
- Check your credit report first. Errors are surprisingly common. Dispute any inaccuracies with Equifax or TransUnion before applying — a corrected error can boost your score by 20–50 points.
- Show stable income. Even a modest, consistent income makes you more attractive to lenders than sporadic high earnings.
- Don't apply to multiple lenders individually. Each application can trigger a hard inquiry that lowers your score. Apply once through Smarter Loans and let our platform do the matching.
- Lower your existing balances. Reducing your credit utilization ratio (ideally below 30%) is one of the fastest ways to lift your score.
- Consider a co-signer. If a creditworthy person agrees to co-sign, you can access significantly better rates.
For more on credit improvement, see our guide: How to Find the Best Loan Rates in Canada (2026 Edition).
Don't let a number define what's possible for you.
Smarter Loans connects you to lenders who look beyond the score. Apply once, get matched to 50+ lenders, and see real offers — free, fast, and with no impact on your credit to browse.
Find My Lender Match →Watch Out: Bad-Credit Loan Scams in Canada
When you have bad credit and need money urgently, you're unfortunately a target for predatory lenders and outright scams. Here are the red flags to avoid:
- 🚩 Guaranteed approval — no legitimate lender can guarantee approval before seeing your application.
- 🚩 Upfront fees required — any lender who asks for money before you receive the loan is almost certainly a scam.
- 🚩 No physical address or registration — check that the lender is registered in your province.
- 🚩 Pressure tactics — "This offer expires in 10 minutes" is not how reputable lenders operate.
- 🚩 Rates above 48% APR — illegal in Canada under the Criminal Code.
Every lender in the Smarter Loans network is vetted, verified, and monitored for compliance. You never have to wonder if you're dealing with a legitimate institution.
Frequently Asked Questions
The Bottom Line
Bad credit in Canada is not a permanent condition, and it doesn't have to be a dealbreaker when you need financing. The landscape of Canadian lending has changed dramatically — there are dozens of lenders who specifically serve borrowers with imperfect credit histories, and the right platform connects you to them fast.
Smarter Loans was built precisely for this. Our technology doesn't replace lenders — it intelligently connects you to the ones most likely to say yes, based on your actual profile, not a generic score threshold. You apply once. We do the rest.
Whether you need to consolidate debt, cover an emergency, or start rebuilding your financial life, there's a lender on our platform for your situation. Explore your options across personal loans and business loans, or go straight to applying.
Start Your Application Today — It Takes About 3 Minutes
Free to use. No obligation. No hard inquiry just to see your options. Over 2,000,000 Canadians have trusted Smarter Loans since 2016.
Apply Now at Smarter Loans →
