Personal Loans

A personal loan can be a great solution when you need a lump sum of money to catch up on overdue bills, cover an emergency expense, or pay for a major purchase. Smarter Loans does the heavy lifting for you by analyzing the loan market and finding the best personal loans in Canada. By connecting borrowers directly with Canada’s most trusted lenders, we help you get the funds you need, quickly and easily, no matter your financial situation.

Compare Personal Loans

Personal loans come in all shapes and sizes. Because Smarter Loans partners with a wide range of providers, many of whom have an online application, we can find the right lender to help you get approved — even if you have a low credit score.

Pre-apply online now, or check out our roster of reputable Canadian lenders below to find the best rate for you.

Pre-Apply For A Personal Loan

Top Personal Loans Providers in Canada

Interest Rate
$500 - $15,000
9.99% - 46.96%
6 - 60 Months
$1,000 - $5,000
19.9% - 45.9%
12 - 36 months
$500 - $1,000
3 - 6 months
$500 - $15,000
29.99% - 47.72%
12 - 60 Months
$1,000 – $10,000
19.9% - 46.9%
Line of Credit
$250 - $7,000
6 - 60 Months
$300 - $20,000
12 - 60 Months
$1,500 to $10,000
12 months to 60 months
$500 - $15,000
18.9% - 46.93%
6 months - 5 years
$100 - $15,000
12 - 60 Months
$500 - $10,000
12.99% - 39.99%
9 - 36 Months

Personal Loan Calculator

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What Is a Personal Loan?

A personal loan is any type of loan that is offered to Canadian consumers. Typically, a personal loan will allow you to borrow a fixed amount of money via a lump sum, which you must then repay over time, plus interest and any associated fees.

Personal loans are versatile and come in many forms, and are commonly used by Canadians for all manner of reasons.

Types of Personal Loan

There are two main classes of personal loan: secured personal loans and unsecured personal loans.

Secured Personal Loan

A secured personal loan (or title loan) is “secured” by putting up an asset (like your house or car) as collateral in the event you can’t repay the money you owe. Because secured loans are considered less risky by lenders, you can often borrow a larger sum of money at a lower interest rate, or get approved even when you have a poor credit score.

Examples of secured personal loans: Car title loan, home equity loan

Unsecured Personal Loan

Most personal loans take the form of an unsecured installment loan, with no collateral required. This means you do not need to have any assets to get one. But because this makes them a riskier proposition for lenders, unsecured personal loans tend to be for smaller amounts and have higher interest rates and stricter payment schedules than secured loans.

Unsecured loan examples: Debt consolidation loan, automotive repair loan, medical expense loan

Graph showing non-mortgage loan balances over time.

Personal Loan Examples

All of the following are types of personal loan:

  • Home equity loan
  • Home equity line of credit
  • Installment loan
  • Personal line of credit
  • Car loan
  • Student loan

Are you eyeing that dream boat but unsure about financing? Dive into our boat loan calculator and explore payment options tailored to your needs.

How Do Personal Loans Work?

Personal loans are usually simple in structure, although the exact way they work depends on the type of personal loan you get. But in general, they follow the same pattern:

1. Borrower considers loan options and chooses a lender to apply to

2. Loan provider considers loan application, including any supporting paperwork (e.g. details of assets if it is a secured loan)

3. Loan is either approved or declined

4. If approved, a loan contract is agreed and loan funds then released to the borrower

5. The borrower makes their agreed-upon loan payments at the payment frequency detailed in the loan contract, until the loan has been entirely repaid

How To Estimate Your Monthly Loan Payment

Graph showing average monthly loan payments in Canada by loan type.

While amounts vary with interest rates, you can expect the monthly payments on your personal loan to work a lot like other loan types.

Here’s a simple example:

Let’s say you want to borrow $5,000 at an annual interest rate (APR) of 15% over 2 years (the loan term/amortization). If the payment frequency is monthly, your personal loan payment amount would be $242.43 per month.

Use the personal loan calculator below to get an estimate of what your loan payments will look like when you apply to a lender through Smarter Loans.

Who Can Get a Personal Loan?

Different financial institutions have different eligibility criteria for their loan products, so you will always need to check with a specific lender if you qualify for a loan from them. However, there are several hard and fast rules about who can get a personal loan in Canada.

All loan applicants must:

  • Be age of majority in their province (18 or 19 years old depending on where you live)
  • Have a valid bank account
  • Be able to prove residence

Other factors, such as income, credit score and so on will certainly affect your chances of loan approval, but without the three factors above, you won’t have any options.

Graph showing consumer debt by age group.

How Much Can You Borrow with a Personal Loan?

One of the reasons personal loans are so popular is that loan amounts are so varied. You can borrow as little as $100, or as much as $100,000 – as long as you qualify for the loan you apply for. Larger loan amounts are subject to greater scrutiny and may require better credit, higher income or collateral.

Where Can You Get a Personal Loan?

Personal loans are ubiquitous across Canada, so no matter where you live, you have multiple lenders to choose from. Loan products of all types are typically available from:

  • Banks
  • Credit unions
  • Alternative lenders
  • Online lenders

In addition, specific loans are available from your chosen:

  • Mortgage brokerage
  • Vehicle dealership
  • Payday lender
  • Private wealth financial institution

How Can You Use a Personal Loan?

A secured personal loan or an unsecured personal loan can be your best choice when you need to borrow money for a specific purpose. At Smarter Loans, we make it easy to shop around and find the right payment plan for your needs.

Here are some of the most common reasons for choosing a personal loan:

Chart showing common uses for personal loans.

Debt Consolidation

When you’re juggling creditors, making a stack of regular payments every month can become overwhelming. Borrowing money to consolidate debt lets you pay off creditors and exchange multiple bills for a single monthly payment.

Restructure Your Debt To Improve Your Financial Outlook

A personal loan interest rate is typically lower than the interest rate on credit cards and other high interest instruments; so using a personal loan to consolidate debt means you are improving your long term financial health by reducing the payment amount due. This can also help your credit score, as you are more likely to make your debt repayments and avoid the negative consequences of a checkered payment history.

Home Improvement and Home Repairs

A secured personal loan can provide the funds you need to cover emergency house repairs (such as fixing a roof damaged by rain) or to fund home renovations needed either to boost your home’s value or to adapt it to changing needs.

Weddings and Vacations

With carefully structured payments, a personal loan alleviates the financial burden of funding major purchases or once-in-a-lifetime events — like that dream vacation or family wedding. You can afford these one-offs without derailing your other financial goals.

Student Loan Debt

Is your student loan rate higher than the fixed interest rate you can get via personal loan borrowing options? If so, using those funds to pay off your loan could reduce your overall interest costs – and maybe even let you pay off your loan faster.

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New Venture Funding

Are you a budding entrepreneur? With the help of a personal loan, you can get the lump sum startup capital you need to get your new business off the ground.

Vehicle Purchase or Repair

Whether you need to repair your old car or purchase a new one, a monthly payment plan can get you behind the wheel faster in many cases — even with a low credit score.

Medical Bill Coverage

Late or unpaid medical bills can quickly impact your credit score. A personal loan can help you manage emergency expenses by paying off the total cost you owe in smaller installments.

Factors That May Affect Your Personal Loan

Banks and other lenders will consider a number of factors before approving your personal loan. While each lender is different, the below are the most common considerations when assessing a borrower:


Graph showing debt by income quintile in Canada. Those who earn more hold the majority of consumer debt.

The higher your income, the easier it will be to qualify for a personal loan. If you can’t qualify on your own, you could consider adding a co-signer or guarantor to your application.

Employment Status

Do you have steady employment income? Salaried employees will usually have an easier time getting approved than someone who’s self-employed or a contract worker.

Financial Commitments

If you pay alimony, spousal, or child support, these amounts will be factored into your application. Alternatively, if you receive support, counting it as income could help you qualify for a higher loan amount.


In general, the better your credit score, the more reliable you’ll appear in terms of making regular payment to your lender, and the easier it will be to get a loan.

Your credit score reflects your entire credit history, so it’s not something you can quickly change or amend. Keeping a close eye on your credit report or using an app to access your free credit score is one way to ensure nothing erroneous appears on your credit profile.

A high credit score helps with loan approval and cost, but it’s not a necessity. You can still qualify for a loan with poor credit, but you might have to pay a higher interest rate.

Graph showing personal loan rates by credit score.


Graph showing Bank of Canada interest rate over time.

If you’re carrying other debt (like a mortgage, line of credit, student loan or car loan) these loan details and payment amounts will be compared against your monthly income. Too much debt could result in your loan amount being reduced (or application denied). This is because the lender wants to make sure you will be able to make each and every loan payment, and if you have other personal loan payments to make, you are less likely to be able to meet all of your obligations.


If you own a valuable asset – like property – you can use this as collateral to secure better loan terms (like a lower interest rate).

How To Apply for a Personal Loan

Applying for a personal loan has never been easier thanks to most lenders offering an online application option. The process to apply will depend on the lender you choose, but in general you’ll have to provide some basic information, including:

  • I.D.
  • Proof of address
  • Bank account information
  • Employment information

You’ll also likely have to provide details on your current financial situation, and this may mean including:

  • Online banking statements
  • Pay stubs
  • Tax returns (e.g. if self-employed)
  • Full details of any other loans
  • Statement of current financial obligations, such as current credit card statements
  • Breakdown of ongoing expenses
  • Information regarding your collateral, such as a recent real estate assessment and current mortgage statement

Since each loan application counts towards your credit score (even if it’s declined), it’s worth knowing what qualification criteria and required documents to expect before you apply anywhere.

How To Compare Your Loan Options

With so many loan options and providers in Canada, it’s worth using Smarter Loans to compare and choose the right loan and lender for you. There’s more help from us below, but here are the key factors to consider when comparing the total cost of different loan options:

Loan Amount

Personal loan offerings vary in size depending on their purpose. Unsecured loans are typically between $500 and $10,000, but can go up to $30,000 and more. Secured loans (like home equity loans) can be over $100,000. As mentioned above, your credit history and income will likely affect the loan amount you qualify for.

Term Length

Repayment periods for a short-term fixed rate loan or variable rate loan typically range from 3 months to 5 years. If a lender permits extra payments (without a prepayment penalty) you can often save money by repaying your loan sooner.

Some loans have much longer lifespans; auto loans can have up to 8 year terms, and mortgages up to 30 years. The type of loan in question has a significant impact on the likely term.

Graph showing the average term of auto loans has steadily increased over time.

Interest Rate

Personal loan interest rates currently range from 6.99% (with good credit) to 47.72%. A competitive interest rate can be either fixed or variable (a fixed rate stays the same for the term of the loan, while a variable rate fluctuates with Canada’s prime rate).

Fixed Interest Rate vs. Variable Interest Rate

There are pros and cons of both fixed and variable interest rates, so choosing between them depends on your financial needs and what rate your credit history qualifies you for.

The main thing to remember is that with a fixed rate, your monthly payments will remain the same for the life of the loan, and your loan term is fixed. You’ll know exactly when it will be entirely paid off.

With a variable rate, your interest charges can change, which means that either your monthly payments may change (increasing or decreasing), or the term of your loan may change (so that your monthly amount remains the same, but how long it’ll take you to pay off the loan will vary). This makes a variable rate more unpredictable.

Repayment Structure

Although monthly payments on personal loans are more common than bi-weekly, semi-monthly, or weekly payments, repayment structures vary with the loan terms. Most lenders will allow some flexibility in your repayment frequency.

Applicable Fees

This could include administration fees, origination fees, or a prepayment penalty for paying off your loan early.

Type of Loan

As mentioned above, a personal loan may be secured (by your personal asset) or unsecured. Unsecured loans tend to cost more, and your credit history will matter more with an unsecured personal loan.

Graph showing preferred personal loan alternatives by age group.

Other Considerations with a Personal Loan

There are some crucial facts to remember when considering and negotiating a new loan:

  1. Choose a repayment term based on what works for your cash flow (the period to pay off your loan will typically be 6 to 60 months)
  2. Unsecured installment loans tend to come with higher interest rates than secured lines of credit and secured loans
  3. Lump sum personal loans tend to include strict loan payment schedules, so if you need more payment flexibility, you might consider applying for a line of credit instead
  4. A personal loan can be great for consolidating debt (this is often referred to as a debt consolidation loan) — not only can you end up with a lower interest rate, you’ll only have one payment to worry about

Here are just some of the personal loans we can help you access when you connect with one of our partners or pre-apply online:

  • Unsecured personal loan installment loans
  • Mortgages

How Personal Loans Work with Smarter Loans

Smarter Loans connects you with your best loan interest and payment options when you need to borrow money.

Looking for funds to pay off utility bills, catch up on missed rent payments, buy a reliable vehicle, or cover emergency expenses like home repairs, medical bills, payday loans, or credit card debt?

Pre-apply for a personal loan in 3 easy steps

  • Take 30 seconds to complete our application online

    Simply fill in the form by choosing the options that apply to you.

  • We find you a lender

    We’ll find the most suitable online personal loan provider for your needs.

  • You get your loan

    Our partner lender will get in touch with you to process your application and get you the funds you need (often in just a few days).

Graph showing the lending breakdown of Canada's big 6 banks.

Frequently Asked Questions About Personal Loans

What do I need to get a personal loan in Canada?

While banks and other lenders will have different requirements relating to minimum credit score, credit history, and income level, the baseline loan requirement for all borrowers includes: Canadian residency, steady employment, a minimum age of 18, and a Canadian bank account.

How much can I borrow with a personal loan?

The precise loan amount you can borrow will depend on your level of income, credit history, and willingness to put up a personal asset as collateral. Loan amounts are typically between $500 and $10,000, but can be much higher.

How are personal loan interest rates calculated?

Personal loan rates are calculated using a combination of borrower-specific (income, credit score, assets, etc.) and macroeconomic (central bank rates, inflation) factors. Annual interest rates (APR) on personal loans can be as little as 4%, but may be as high as 40% or more.

Can I pay off a personal loan early?

While some personal loans have fees, they don’t typically come with prepayment penalties. An early payout could lower interest costs over the life of your loan, but it’s important to verify that your lender permits this before making a prepayment.

You may also want to consider renegotiating your loan agreement to change the payment frequency, if paying your loan off early is desirable. Bi-weekly or semi-monthly payments instead of monthly can help pay down your debt faster.

Can I get a personal loan with bad credit?

A high credit score will help you to secure a more competitive interest rate on a personal loan (and a higher credit limit on a line of credit), but it is not a necessity. If your credit report indicates a credit score that is less than optimal, you still have options, primarily from bad credit lenders and alternative lenders.

You can also mitigate the effect of a low credit score by applying for a secured loan instead of an unsecured loan. A secured personal loan is considered less risky by lenders as they can use the collateral on the loan in lieu of payment in the event of default.

How do I find out my credit score?

Finding out your credit score is easy, and there are several methods. You can access a free credit score report through various financial providers, usually online. The score shown on these is typically reflective of your ‘official’ score, but may not match exactly.

To find out your official credit score, you need to request it from a credit bureau. There are two in operation in Canada: Equifax, and TransUnion. Both will provide a full credit report, including items like your credit history, credit score, and even your Equifax risk score.

Can I access a personal loan online?

Absolutely; many lenders have online application forms, making it easy to apply and receive your loan entirely from home.

Are personal loans regulated?

Financial institutions in Canada are regulated at both the federal and provincial level. This duality affects borrowers in that their chosen lender (especially if it’s an online one) must adhere to the regulations wherever they are.

Here’s an example: let’s say a borrower, Joe, lives in Nova Scotia and applies for a loan from an online provider, like Fairstone Financial Inc. Although the company may operate across all provinces, and must abide by federal law, it also has to adhere to Nova Scotia’s specific regulations when it comes to the loan applied for by Joe. This can affect terms and conditions of the loan, as well as lender licensing requirements.

What happens if I don’t pay back a personal loan?

Paying back your debts is crucial if you want to protect your credit score and avoid the ramifications of default. In the instance of a secured loan, non-payment may result in seizure of your asset used as collateral. In the instance of an unsecured loan, the lender may pursue you through the courts for payment.

Pre-Apply for a Personal Loan Here

Sean Cooper
Personal Loans Expert
Published: 20/03/2019
Last Updated: 12/04/2024

Vlad Sherbatov
Expert Reviewer
On: 26/04/2023

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