Personal Loans

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 poor credit score.

Weddings and vacations

With its 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.

Student loan debt

Is your student loan rate higher than the fixed interest rate you can get borrowing personal funds? If so, using those funds to pay off your loan could reduce your overall interest costs.

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 instalments.

New venture funding

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

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?

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

• Unsecured personal loan instalment loans
• Home equity loans
• Auto loans

• Mortgages
• Car title loans

Pre-apply for a personal loan in 3 easy steps

How To Estimate Your Monthly Payment

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.

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.

Here are some important factors to consider when comparing the total cost of different loan options and payment terms:

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.

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.

Interest rate. Personal loan 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).

Repayment structure. Although monthly payments on personal loans are more common than bi-weekly, semi-monthly, or weekly payments, repayment amounts vary with the loan terms and interest.

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

Type of loan. A personal loan may be secured (by your personal asset) or unsecured.

How to Get a Personal Loan: What to Expect

Banks and other lenders will consider a number of factors before approving your personal loan. 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.

Income

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.

Documents you might need to show:

• Online banking statements

• Pay stubs

• Tax returns

Employment status

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

Documents you might need to show:

• Self-employment tax returns for the last two years

• Proof of additional or alternate income from current projects or contracts

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.

Documents you might need to show:

• Statement of current financial obligations

Credit

Does your credit report show at least a fair credit rating? In general, the better your credit score, the more reliable you’ll appear in terms of making a regular payment. You could still qualify for a loan with poor credit, but you might have to pay a personalized rate at higher interest.

• Current credit card statements

• Breakdown of ongoing expenses

• Full details of any loans

• Current mortgage statement

Assets

If you own a valuable asset—like property, for example—you can often use this as collateral to secure better loan terms (like a lower, personalized rate of interest).

Documents you might need to show:

• Recent real estate assessment

Key Features of a Personal Loan

• You can choose the repayment term based on what works best with your cash flow (the period to pay off your loan will typically be 6 to 60 months)

• A personal loan can be great for consolidating debt (this is often referred to as debt consolidation loans)—not only can you end up with a lower interest rate, you’ll only have one payment to worry about.

• Getting a personal loan through Smarter Loans can be ideal for covering large, one-time fixed expenses such as costly repairs or major life events

• By showing exactly when funds must be repaid, the loan payment date, repayment amounts, and other terms associated with your personal loan help you stay on track

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 for minimum credit scores, credit histories, and income levels, the baseline loan requirement for 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 amounts you can borrow will depend on your level of income, credit history, and willingness to put up a personal asset as collateral. Personal loans 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 Earlier Than the Loan Term Requires?

While some personal loans have origination 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.