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.
How to choose the best loan for you
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.
What are the loan types?
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.
Best Personal Loan
Loans Canada/Prêts Québec
Loans Canada is perfect for anyone that has bad credit and still needs or wants a personal loan. They set you up with a lender that matches your particular needs, and the easy online application makes it quick and simple.
They have quick deposits within 1-3 days after you’ve applied and have been approved, and loans can get up to $50,000 – and no collateral is required to secure your loan once you’ve chosen what works for you. Interest rates can be high depending on what you’re aiming for – up to almost 47%. Online quotes are not provided, you will have to speak with someone over the phone.
The only other downside is that they are online only, and as such have no in-person stores, if you prefer to handle your loans that way.
- Great for bad credit.
- Decent interest rates.
- Easy to follow site.
- Interest rates can be high depending on personal circumstance.
- No in-person locations available.
Best Unsecured Line of Credit
For unsecured lines of credit – Mogo is your best bet. A free credit check once you’ve signed up and are verified, and you can check all available loan options for yourself before applying. Signing your application and contract can be all done online with any need to go in person.
High loans up to $35,000 can be available as unsecured loans, and automatic repayments make the entire process simple and easy – especially with so much banking being done online. APR’s can reach up to 47% or higher, depending on your loan amount and circumstance such as having bad credit.
- Free credit score check.
- Check loans available before applying.
- High loan amounts for unsecured loans.
- Fees may be applied depending on which loan you choose.
- APR’s can be high if your credit is bad.
Best Loan for Home Improvement
No collateral or application fees or charges necessary, Fairstone will help you get a loan from $500 to $20,000. Repayment installation options are monthly or fortnightly. While the interest rates can be high up to 39.99%, there are no other fees and there are not pre-payment fees in case you pay off your loan early.
There is an additional 14-day cancellation period included in case you need to cancel your loan for any reason, and that doesn’t give you any fee. In-branch approval is involved with your loan approval process and can’t be done all online like other loans.
- Flexible loans.
- 14-day cancellation period to cancel loan without fees.
- No application fees.
- Can have high interest rates.
- Not fully online only.
Best Instant Loan
If you’re needing an instant loan fast, Lend Direct is your best choice. Like most instant loans, the interest rates can be very steep, but on the flip side of it – you can be approved within a few hours and have your loan INTERAC transferred within 15 minutes afterwards.
Interest rates start at 19.9% and go upwards to 47%. Automatic repayments can be set-up, and everything is done online which can make it a lot easier for most people. There are no fees and the minimum income amount per month to be approved is $1,500.
- Once approved, loans can be sent within 15 minutes.
- Online application only.
- Fast turn around/approvals.
- Loans up to $15,000.
- Interest rates can be almost 47%.
- Credit score needs to be at least 560.
Best Loan to Build Credit
Refresh Financial is one of Canada’s top-rated sites to help you build credit back up (or to start gaining credit), with their easy online application and they do have three options to choose from.
The first is the credit builder loan which allows you to put money into a savings account and from there build credit as you do so, as the payments will be reported to credit bureaus, allowing your credit to improve and go up over time. The account can be accessed whenever you’d like and taking or spending money from it doesn’t impede the process.
Secondly they have a secured card that allows you to build credit by using it on your everyday purchases like a regular credit card and repaying it back. Thirdly they have an ultimate credit building experience package that allows you to view your credit report, run simulations, and get perks.
APR on the credit building loan is 19.99%, the secured card has an annual fee of $12.95, and a maintenance fee of $3.
- Easy online application.
- No extra work needed on your end to report to creditors.
- Build savings at the same time and access whenever necessary.
- 19.99% interest starting rate.
Best Debt Consolidation Loan
Options with Debt.ca include debt settlement, debt consolidation, consumer proposals, and credit counselling – all to help you get your debts and money management back on track. Online applications and quick referral help from a debt specialist makes starting the process simple and easy.
Bad credit or no credit is fine, as they help and cater to those needing the help. After consolidating your debts, you should have lower interest rates and lower monthly payments. Not all of their debt consolidation/relief options are shown online, so do be sure to inquire if there is anything more specific you want or need.
A caveat is that it is only for unsecured debts only, as Debts.ca cannot consolidate secured debts owing.
- Includes debt settlement, consolidations, and counseling.
- Bad credit or no credit is okay.
- Unsecured debts only.
- Additional fees may occur.
Best Loan for Small Businesses
Sharpshooter Funding is perfect for small businesses, and they work with many different industries such as dental, healthcare, retail, logistics, construction, etc. Small business loans can take a bit more steps than a personal loan, but with Sharpshooter Funding, it’s all online and easy to navigate through. If you already own a business or have a viable business plan – there is a pre-approval form that takes minutes to fill out and will save time.
They offer numerous types of financial help such as working capital, merchant card processing, unsecured business funding, commercial mortgages, and start-up funding for those looking to get some help with starting a new business.
Funding is generally sent to you (after approval) same day or up to 3 days afterwards. Many reviews state that they received their help quickly and working with them has been fantastic. Interest starts at 9%, based on your case.
- Easy online application.
- Works with bad or no credit users.
- Quick funding.
- Overall health of your business will determine your loan – if your business isn’t doing well, you may have issues.
How do loans work?
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.
Frequently asked questions about loans
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.
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