Frequently Asked Questions About Loans in Ontario
Where can I get a loan in Ontario?
As Canada’s most populous province, Ontario has no shortage of loan providers to choose from. This includes:
- Banks
- Credit unions
- Auto loan providers
- Payday lenders
- Mortgage companies
- Online lenders
- Credit card companies
- Vehicle specialists (e.g. certain brands of motor boat, ATVs, motor homes and so on have their own financing departments)
- No credit check lenders
- Bad credit loan providers
- Other financial service companies
- Government of Canada (for certain mortgages and commercial loans)
- Government of Ontario (for student loans and qualifying business loans)
How do I choose a loan company?
The type and size of loan you need may partially influence, or in some cases even dictate, what loan providers you can go to. For example, you won’t be able to get a mortgage from a payday lender. Your particular financial circumstances also have an impact on which providers will work with you. Every lender has their own eligibility requirements, range of loans, and borrowing minimums and maximums. This means it’s crucial to know what you need and understand your financial circumstances, before you start comparing your options. Luckily, Ontario has the most comprehensive range of lenders of all the provinces.
Once you have a shortlist of companies who offer what you need, and who will work with you, it’s a good idea to check out a company’s reputation via customer reviews to find the most trustworthy. And then it’s time to compare interest rates, fee structure and other terms, to find the most affordable option for you. Again, as Ontario has the most active loan market in Canada, the rates here are more competitive than elsewhere in the country.
What’s needed to qualify for a loan in Ontario?
All loan types (and lenders) have their own eligibility requirements, but generally speaking, all lenders in Ontario require the following, for loans of any kind:
- Proof of ID showing that you are at least 18 years old
- Proof of address showing your residency in Ontario
- An active bank account
After this, traditional loan companies will require a minimum credit score of 600, and proof of income. Alternative lenders may not have these restrictions, or will be more flexible about their qualification criteria. Generally, the larger and longer term a loan is, the harder it is to qualify for, and the more paperwork you’ll need to provide.
Can I get an Ontario loan if I have bad credit?
Yes, it is possible to get a bad credit loan in Ontario. The average credit score in the province is 650 (higher in the major cities – 679 in Toronto and 663 in Ottawa). Anyone with a credit score of less than 600 is considered a “risky” borrower, and anyone with a score below 500 has very bad credit. This latter group constitutes about half a million Ontarians. Although banks and credit unions usually will not work with bad credit borrowers, there are alternative lenders who have more flexible prerequisites, and even some dedicated lenders who only work with borrowers with low credit scores. Bear in mind though, you will have to pay more in interest for a bad credit loan.
What kind of loan can I get in Ontario?
Ontarians have access to loans of all sizes and types; if you live in Ontario and need financial help, you really have all the options you could ever need. Available throughout the province are:
- Mortgages
- Auto loans
- Truck/trailer loans
- Bad credit loans
- Personal loans
- Credit cards
- Commercial loans
- Invoice loans
- Equipment loans
- Boat loans
- Aviation loans
- Home equity lines of credit
- Payday loans
- Installment loans
- Same day loans
- Title loans
- Debt consolidation loans
You may get the best loan by going to a specialty lender, or by shopping around the big banks – it all depends on what you are borrowing for, and your financial circumstances.
Can I get a business loan in Ontario?
Borrowing money for a business is very common, and many Ontario businesses rely on outside financing to get going, and to get by. Regardless of what you need financing for (vehicles, equipment, cash flow, property, expansion, emergency expenses or something else entirely) there are a few factors that will determine your eligibility for a traditional business loan.
Generally, most lenders will want to see:
- A business history lasting at least two years (unless it is a dedicated start up loan)
- A business plan
- Proof of revenues, profitability, and projected future revenues (or other proof you will be able to repay the loan)
- Collateral (for property, equipment, invoice and vehicle loans)
- Credit history for the business and the business’s owners
If your business does not meet any of these requirements, a loan may still be possible, but an alternative lender with more flexibility is probably better placed to help you. Or, you may be eligible to receive financing aid from the provincial government.
Can I get a loan if I’m new to Ontario?
New Ontarians need not worry – it is still possible to get a loan, even if you have moved from another province or country. As long as you are at least 18 years old, have a bank account, and can prove your address, you’ll have some options. Those from other provinces will have their out-of-province credit history to rely on, while new Canadian immigrants will have to start building their credit from scratch. This simply requires some more due diligence on behalf of the lender; they may ask for collateral before offering you a loan, or charge higher interest rates to offset their risk.
What factors do I need to consider before getting a loan in Ontario?
The most important factor to consider when choosing a loan is the cost. You must be sure you’ll be able to make your repayments, otherwise you risk damaging your credit and facing penalties, fines or even bankruptcy proceedings. So when looking at loan options, consider the monthly payments, including all interest and fees. Also consider how long you’ll be making these payments for. If you’re at all unsure if you can afford them, reconsider whether this product is right for you. Even if you’re desperate for an injection of cash, if you agree to terms you know you can’t abide by, you’re simply delaying trouble. Talk to one of our advisors to find a product that will work for you, now and in the future.
