Compare the Best Loans in Canada

Having to compare personal loans based on your own unique financial circumstances and wants from a loan, it can feel like an endless sea of lists – especially if your credit isn’t the best. Below we’ve compiled the best loans in Canada to help you get started and informed. 

Differences between loan providers, lenders, and comparisons between them all to better help you find what will work best for your particular income, credit score, and desire for a loan, whether it’s a personal or business loan.

Read on for a comparison of the top loans available in Canada.

When you’re looking for the best loans within Canada, there are some key factors to keep in mind and to watch for when you’re comparing and deciding what to choose: 

Personal priorities: What matters most to you is the driving force behind what loans to compare and go for in the end. Rates? Monthly repayments? The overall loan cost? Credit rating eligibility? Keep in mind what you want most and from there it’s easier to whittle down the list and look for the key components that you’re after. 

Eligibility: It goes without saying that loans can sometimes be finicky. Even with the best credit and high incomes – some loans won’t always be approved, due to different eligibility factors. When you’ve found a loan you’d like to go with and try – be sure to check whether or not you’re eligible. If not, don’t fret! There are always other loans that may match (or be even better) what you were looking for. 

Terms and repayments: Repayments and initial terms are important to both you and the lender. Generally, it’s best to find a lender that is flexible and understanding to renegotiate your payments if something changes in your life and your finances take a turn so that you can still pay off your loans, without stressing too much about additional payments or concrete terms that seemed alright at the time.  

Fees and charges: Hidden fees are a main concern for most users looking to get a new loan. They definitely exist, and fees can add unnecessary charges and costs to your initial loan and payments back. Make sure to look for anything within the contracts before you sign up for your loan. 

Interest rates: Interest rates are the most important factor when you’re looking for a loan. A loan might seem great all around, but if it has high interest – you’ll end up paying far more when it comes time to repay the loan. Lowest rates and short terms are generally a good bet for saving you money in the long run.  

Repayment calculators and credit checks: Comparing different interest rates and other aspects are a great way to quickly compare and see what the differences are between a few lenders, especially if you’re on the fence deciding. You can get an idea of what is the least expensive. 

You can also check your credit scores for free, using several different companies. This will help whittle down your comparison even further – so that you know what you’re eligible for. 

Other reviews and customer views: Take this advice (and customer reviews) with a grain of salt. It is a good way to get a general view of different lenders and businesses. That said – be sure to check whether or not the reviews are legitimate or just someone venting on an off day. Generally speaking, if there are nothing but bad reviews about a place, across multiple reviewing sources – you can guess they might not be up to par for your business. 

There are many different types of loans, which can be relatively categorized into: 

• Personal loans – Personal loans are versatile and can cover basically anything that isn’t something illegal. Lenders may put restrictions on what personal loans can cover, such as that you can’t use a personal loan to cover a college tuition. 

• Auto loans – Auto loans are vehicle loans, as the name implies. They’re generally secured by a car being financed. They don’t just stop at cars or trucks either – they can be used for boats, aircrafts, etc. 

• Mortgage loans – Mortgage loans are what you think of when you get a loan from the bank when you can’t afford to buy a house upfront. With a mortgage loan, you can live in your new house before it’s fully paid off. 

• Home equity loans – Home equity loans are similar to personal loans in that they’re versatile, however  the money the borrower can take out is dependant on the equity of your home, which will be the worth of the house minus the balance left on the mortgage. 

• Student loans – Student loans, of course pay, for trade-learning and education costs. While they are supposed to be used for schooling and education, they aren’t strictly monitored on how a borrower uses the money. 

• Credit-building loans – Credit-builder loans are a bit of a misleading name, as they’re more of a reverse loan of sorts. They’re for people who want to establish or re-establish credit by making payments and improving their credit that way. The lender will pay and report in payments, over 6 to 24 months and at the end, will have access to the lump sum back – as it’s usually placed into a sort of savings account. 

• Payday loans – Payday loans are better left avoided, unless absolutely necessary. They’re short-term loans that must be paid back on your next payday or equivalent. Usually, they have smaller limits such as $500 or less, but the interest on them can be as much as 400%, and are not worth the hassle or extraordinary rate. In other words, you could potentially be on the hook for 4-times the amount you borrowed come payday!

• Loans from friends/family – While not always necessary to have a written document stating that a friend or family has loaned you money, it can be beneficial. Depending on how well you’re acquainted with said friend or family, there can be little, or no interest and they tend to not care much about your personal credit scores. 

• Business loans – Business loans are simply loans between a business and either a bank or credit broker. Businesses need capital and upfront costs that sometimes they can’t pay right away until they’re turning a profit. Business loans can be great for small businesses that are starting to see profits but need that boost to get them cemented in. 

 All have their pros and cons and may vary depending on what you need or are wanting a loan for, and what you are able to apply for. 

There are many types of loans out there, and what you’re aiming for will determine how much you’re paying back and when. 
 
Typically all loans work in the same way; your lender, whether the bank or otherwise, will approve you for a loan that works feasibly for your income and credit score, and over weeks, months, or years – you will pay back that loan, plus interest. 

Interest is the compensation to the lender for their services and for taking the risk of giving their money as a loan, and is calculated differently depending on a number of factors. Make yourself familiar with how much in interest you will be expected to pay before you borrow.

For this article on loans within Canada we did extensive research on several peer-reviewed websites, banks, credit brokers, and used reviews to determine and compile what the best loans are available in Canada and how to find what you may be looking for and provide insight on how loans work. 

What is a personal loan? 

Personal loans are a loan offered by online lenders, banks, or credit unions – that allows you to borrow a sum of money for many different purposes. Home renovations, a dream wedding, consolidating debt, etc.

Secured vs unsecured loan: What’s the difference?  

A secured loan is when the bank or wherever you’re lending from takes something as collateral in case you can’t or don’t pay back your loan. An unsecured loan allows you to borrow without that being needed. Secured loans generally have a lower interest rate and higher loan amount allowed, but unsecured loans can have faster approvals since collateral is not needed. 

What are the benefits of getting a loan? 

The benefits to a loan are that if you’re needing money for a dream wedding, home renovations, debt consolidation, or anything else that you’d like to get on top of and have the money for it upfront – then a personal loan is a great way to be able to do that, when you might otherwise not have been able to. 

What are the disadvantages of getting a loan?  

High interest rates, fees and penalties, and debt possibly increasing are the main disadvantages to receiving a loan.  

What do I need to apply for a loan?  

To apply for a loan, the requirements may be different depending on what kind of loan you’re going for and where you’re getting your loan from. Generally, you’ll need personal photo ID, proof of address, and proof of your income, as starters. 

Should I get a loan? 

If you have a good credit score and stable income, then a loan will more than likely be beneficial for whatever your reasons are for wanting one. Even with poor credit, as long as you have a stable income and have worked out reasonable rates and payback amounts/times with your lender – a loan is a good idea to help you realize your dream or goal faster. 

How do loan interest rates work?  

Interest on a loan is the calculated percentage of what you owe for the loan, it varies based on how long or short your loan term is as well. Many loans will allow you to make payments weekly, once a month, etc., and more repayments tend to mean less interest. When calculating your interest loan, be sure not to use the comparison rate and use the basic annual interest rate – or else you’ll end up with a higher number than what it actually is. 

Which loan company is best for bad credit in Canada?  

Loans Canada is best for bad credit, as their lending is based on factors such as your income. 

Does my credit score affect my interest rate?  

Yes, typically your credit score will affect your loan and interest rates, as to a bank or lender – your score determines how dependable or risky it would be to loan you money. There are lenders and banks that don’t base off of credit score and instead look at your income and etc. to better gauge an interest rate that works for you. 

What is a reverse loan? 

A reverse loan, most commonly for reverse mortgages – are where you’ll get a loan in which the lender pays you. Reverse mortgages for example, take part of the home equity and convert it into payments for you as a kind of advance payment on your home equity. 

Are no credit check loans safe? 

Yes – Just be sure to do your research before committing to a no credit check lender. Make sure that they are legitimate and not a scam or have something like extraordinarily high interest rates. Especially online, it’s important to look into the lender you’re interested in and thoroughly find out whether they’re worth it or not. 

List of B lenders in Canada? 

MCAP, First National, RFA, Merix Financial, Radius Financial, CMLS, and Home Trust are all B lenders available within Canada. 

Fixed rate vs variable loans: What’s the difference?  

Fixed rates are set interest rates that will stay the same throughout the entirety of repaying your loan. Variable rates will adjust over time depending on how the market changes. There are many different fixed rate loans that can be made variable as well, such as private student loans, mortgages, and personal loans. 

How does a debt consolidation loan work? 

Debt consolidation loans work by rolling any and all of your debts into one large sum. Typically, high-interest debt such as credit cards are the main consolidation for many people. Debt consolidations can be a great idea if you can get a low interest rate, as it makes it much easier to pay off everything without separate high interest rates. 

What are the main reasons why people are denied a loan? 

Bad credit scores are a large reason why people can be denied for loans, also a high debt to income ratio, unstable employment, too low of an income for what you’re applying for, or even just something like missing an important bit of paperwork. 

When should a business get a loan? 

If a business has a plan in place and are expecting revenue to increase and prosper, a business loan may be good to be sure that bills and payments can be paid while the business is starting to grow and need that little push of help to get started and stay afloat.