Personal Loans

Personal Loans in Canada

Every once in a while everyone needs a little bit of help. Whether it is to catch up on overdue bills or cover an emergency expense, a fast personal loan can be a great solution to get you over the hump. At Smarter Loans, we use a panel of over 50 industry experts to review and qualify Canada’s best personal loan providers so that we can connect you with only the most trustworthy companies. Even if you don’t have perfect credit, we can find a loan provider for you. Simply pre-apply online here, or check out the list of reputable companies below.

We can help connect you with the top loan providers in Canada.

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Top Personal Loans Providers in Canada

Interest Rate
$500 - $35,000
5.9% - 39.9%
12 - 60 Months
$500 - $35,000
19.99% - 46.96%
9 - 120 Months
$500 - $20,000
23% - 59.7%
6 - 60 Months
$2,000 - $10,000
18.9% to 54.9%
12 - 60 Months
$500 - $10,000
12.99% - 39.99%
9 - 36 Months
$500 - $10,000
19.99% - 46.99%
12 - 36 Months
$1,500 - $12,500
19.99% - 34.99%
12 - 60 Months
$500 - $30,000
19.99% - 39.99%
6 - 120 Months
Up to $35,000
Starting at 5.15%
$2,000 - $10,000
34.9% - 43%
12 - 60 Months
$500 - $10,000
Open Line of Credit
$1,000 - $35,000
5.6% - 25.5%
36 - 60 Months

What is a Personal Loan and How Does it Work?


A personal loan is when you borrow a fixed amount for personal needs (as opposed to for business needs) from a lender and agree to paying it back by instalments over a specified timeline. Personal loans usually have specific reasons like paying for a home renovation or vehicle.

Personal loans tend to have evidence of the debt in the form of a promissory note. Once you’ve fulfilled your obligations as a borrow (you’ve paid back the loan in full), the promissory note is retired.

How a Personal Loan Works

Personal loans work a lot like other loan types. You’re borrowing money from a lender that you eventually have to repay with interest and fees, as applicable.


There are many lenders to choose from for personal loans. Here are some factors to consider when choosing the personal loan that’s right for you. 

  • Loan Amount

    The loan amount is how much the lender is willing to lend you. This depends on several factors including your income, credit, debts and whether the loan is secured or unsecured against your personal assets.

  • Terms

    A loan’s term is the length of time the loan can be outstanding before it’s needed to be repaid. This isn’t to be confused with repayment terms, which is length of time the loan must be paid back in full.

  • Interest Rates

    Depending on the lender and product, the interest rate may be fixed or variable. Variable personal loan interest rates tend to be lower, but your interest rate may go up during you loan term. You’ll need to decide whether it’s worth taking the added risk of variable.

  • Repayments

    This is the amount and length of time you’re required to pay back the money you borrow in full. Before taking out a personal loan, it’s important to make sure you can afford your monthly payments and avoid defaulting on the loan.

  • Fees

    Some loans may come with upfront fees and ongoing fees. You’ll want to find out about any fees and how often the lender requires you to pay them.

Different Personal Loan Types

Personal loans come in all different shapes and sizes. Let’s take a closer look at the different product types.

Unsecured Installment Loan

Most personal loans tend to be unsecured. This means that there isn’t an asset (known as collateral) used to back up the loan. As such, unsecured instalment loans are considered riskier by lenders and tend to have higher interest rates and lower credit limits than secured loans (i.e. mortgages, car loans). The “instalment” part of the name refers to the fact that you’re requirement to pay back the loan based on a fixed amount over a set time period.

Title Loans

A title loan is a personal loan secured by an asset like your car. It’s called a “title loan” since you’re agreeing to put the lender on title. A title loan can help someone with poor credit borrow money who otherwise may not qualify. As such, title loans tend to come with higher interest rates. By securing the loan, a title loan can also be a way to borrow a larger amount than you’d qualify for with an unsecured (instalment) loan. The loan  is considered less risky by lenders since it’s a secured by an asset.

Personal Loan Example with Numbers

To get a better understanding, let’s run through a personal loan example with some numbers.

Let’s say you want to borrow $1,000 at an 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 $48.49 per month.

How to Qualify for and Obtain a Personal Loan

Lenders consider several factors before they’ll approve you for a person loan. It’s helpful to know the qualification criteria before applying to ensure your loan application is a good fit for the lender since each loan application counts towards your credit score, even if it’s declined.


Here is a list of factors lenders consider in qualifying a borrower for a personal loan. 


If you have any debt (mortgage, line of credit, student loan, car loan, etc.), it must be factored into the loan application. That’s because the lender will want to know how much of your monthly income is already going towards servicing other debt. If you have too much debt, your loan amount could be reduced or worse, your loan application could be denied.

Financial Commitments

Are you paying alimony/spousal support or child support? This must be factored into your personal loan application. If you’re in receipt of these, it may help you qualify for a higher loan amount if it’s counted as income.


All things considered equal, the better your credit score, the easier it will be to qualify for a personal loan. Lenders look at your credit history and credit score to deem whether you’re a creditworthy borrower. If you have poor credit, you may be required to pay higher rates or your application could be turned down.


The higher your income, the easier it is to qualify for a loan. If you can’t qualify for a loan on your own, you might consider adding a cosigner or guarantor to the loan application.

Employment Status

Someone who’s a salaried employee will typically have an easier time being approved for a personal loan than someone who is on contract or self-employed.


If you own any valuable assets, there’s nothing stopping you from using them as security to help get an even lower interest rate on your personal loan.

Pros and Cons of Personal Loans

Let’s look at the pros and cons of personal loans to help you decide whether a personal loan is right for you. 

Key Benefits

The repayment amount and terms helps you stay on track. You’ll know exactly when your loan must be repaid.

Unsecured personal loans tend to be easier to qualify for than secured lines of credit and secured loans.

You can often choose the repayment term based on what works best with your cash flow. Loans usually can be paid off in between 6 and 60 months.

Personal loans are ideal for covering large one-time fixed expenses, such as a costly home renovation or car repairs, when you don’t plan to borrow anymore funds.

A personal loan can be great for consolidating debt. Not only could you have a lower interest rate, you’ll only have one payment to worry about.

Things to Keep in Mind

Unsecured personal loans tend to come with higher interest rates than secured lines of credit and secured loans.

If you’d like to borrow additional funds, you may be required to apply for a new loan.

Personal loans tend to come with a strict repayment schedule. If you’d like a more flexible repayment schedule, you might consider signing up for a line of credit instead.

About the Author:

Sean Cooper is the bestselling author of the book, “Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians”. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. Sean is a personal finance journalist, money coach and speaker, his articles and blogs have been featured in publications such as the Toronto Star, Globe and Mail, Financial Post and MoneySense.

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Types of Personal Loans offered:

  • Personal Loans
  • Short Term Loans
  • Debt Consolidation Loans
  • Long Term Loans
  • Credit Cards
  • Bad Credit Loans
  • Dentist Loans
  • Installment Loans
  • Vacation Loans
  • Online Loans

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