Compare Online Personal Loans in Canada
What You Should Know
- Online personal loans are usually unsecured loans that you can get within a day or two.
- Online lenders often have lower credit requirements.
- The borrowing limit for online personal loans is lower than for secured personal loans.
- The rate of interest for online personal loans is typically over 19.99%.
Personal loans are the go-to when you’re in need of some cash. You may need money to fund home renovations, finance your wedding, consolidate debt, or deal with an emergency, but might not have enough savings for these situations. A personal loan lets you borrow the money you need and pay it back over a defined period of time. Like any other loan, you must pay interest on the money you borrow.
Personal loans can be secured, meaning backed by collateral, or unsecured, meaning loans that don’t require collateral. You can get a personal loan from a bank, a credit union, or an online lender. Online lenders are the fastest in approving personal loans as they don’t require in-person meetings and often have lower eligibility requirements than banks and credit unions. We will discuss the different online lenders offering personal loans to Canadians on this page.
Most Popular Online Lenders in Canada
Warning: Be cautious with very high interest loans (e.g. payday loans)
High-interest loans are unsustainable for extended periods and can be expensive for long-term borrowing. If you are currently facing financial challenges, reach out to Credit Counselling Canada for complimentary financial counseling at +1 866-398-5999.
| Lender | Funding Amount | Term length | Updated June 2022 | Updated June 2022 | |
Spring Financial | 9.99% to 46.96% | $500 to $35,000 | 9 - 78 months | 1721 Reviews 4.8 | |
SkyCap Financial | 12.99% to 39.99% | $500 to $10,000 | 9 - 36 months | 1559 Reviews 4.6 | N/A |
Magical Credit | 19.99% - 46.80% | $1,500 - $20,000 | 12 - 60 months | 236 Reviews 4.2 | 34 Reviews 3.4 |
Fora | 19.9% to 46.9% | $1,000 - $10,000 | Open-ended line of credit | 3 Reviews 3.3 | 212 Reviews 4.7 |
Eastern Loans | 23% | $500 - $750 | 90 to 120 days | 70 Reviews 3 | 2214 Reviews 4.7 |
Fairstone | 19.99% to 39.99% | $500 to $25,000* | 6 - 60 months** | N/A | 159 Reviews 1.5 |
LendDirect | 19.99 to 46.93% | Up to $15,000 | Open-ended line of credit | N/A | 2045 Reviews 4.5 |
Loanz | 29.9% or 46.9% | $1,000 - $15,000 | 12 - 60 months | N/A | 155 Reviews 4.1 |
Easy Financial | 29.99% to 46.96% | $500 - $20,000 | 9 - 84 months | N/A | 184 Reviews 1.6 |
GoLoans | Up to 32% | $500 to $5,000 | 91 - 120 days | N/A | 358 Reviews 4.5 |
Money Mart | 29.9% or 46.9% | $500 to $15,000 | 6 - 60 months | N/A | 3866 Reviews 4.5 |
*Annual Percentage Rate
** The term length is for unsecured loans. Fairstone also offers secured loans with term lengths of up to 120 months, but such loans take a few days to process.
Spring Financial is a popular online lender that facilitates getting a loan from your home. The application takes approximately three minutes to complete, and you may receive the funds in your account the same day. The interest rate and the amount you qualify for depend on several factors, such as your credit history, current income, and current debt load.
SkyCap is an online lender in Canada. The application process takes less than five minutes, and your application is assessed on three factors; credibility, stability, and current income. You can receive the funds in your account almost instantly after approval.
Magical Credit is a Canadian lender offering short-term loans and short-term government subsidy loans. Applicants can expect a decision from them within 24 hours, and the funds deposited in their account shortly after.
Fora offers personal lines of credit. This means once you are approved for a certain amount, you can draw up to that amount, repay it, and redraw it again without having to apply for another loan. Fora is currently available in Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Saskatchewan.
Based out of Toronto, Eastern Loans offers loans of up to $750 in Alberta, Ontario, British Columbia, New Brunswick, Nova Scotia, Newfoundland, Manitoba and Prince Edward Island. The lender does not check your credit history to approve you for the loan but instead checks your financial data. To qualify for a loan, you must have reliable employment with a monthly income of at least $1,200. You can get the funds in your account the same day or within 24 hours if approved.
Fairstone is a popular lender that allows you to apply online or through one of 240+ branches across Canada. Generally, they provide loans to those with fair to good credit scores. Fairstone offers online loans of up to $25,000; however, you can also get a secured loan of up to $50,000 from them. You can get a loan quote within minutes and get the funds in your account within 24 hours.
If you are looking to get a line of credit, Lend Direct can be your go-to lender. The loan remains open as long as you need, and you can keep borrowing money up to your credit limit and keep repaying it. The lender gives a decision within 60 minutes, and you can receive the fund in your account via Interac e-Transfer in as little as 15 minutes after the approval.
Loanz is an online lender that offers instant personal loans to Canadians. The online application takes only three minutes to complete, and you can get approved instantly if you provide your banking details. If you accept the offer immediately, you can get the funds in your account in as little as 15 minutes.
Easy Financial lets you apply for a loan online, over the phone and at any of its 400 physical locations. If you have a co-applicant, you can seek a 2% reduction in the interest rate. If you complete all the formalities quickly, you can receive the funds in your account the same day.
The Edmonton-based loan company GoLoans offers cash advance loans to borrowers through third-party lenders. Borrowers with a low credit score may also apply for a loan with GoLoans; however, such borrowers may have to pay a guarantor fee on top of the interest. GoLoans suggests that the company does not run a hard credit check on the borrowers; thus, their credit remains unaffected. GoLoans is currently available in Ontario, British Columbia, Alberta, New Brunswick, Newfoundland and Labrador and Prince Edward Island.
Money Mart lets you apply for a loan online or at one of its 500 stores spread across Canada. The application takes less than 10 minutes, and you can receive approval almost instantly. You can get the funds in your account within 24 hours. If you want to pick up cash from their store, you may be able to do so within 15 minutes of the approval. To be able to apply, you need to be at least 19 years of age, have a valid government-issued ID, have a chequing account, and have a stable income.
Getting the Money From an Online Lender
There are several ways you may be able to get the borrowed money from the lender. The lender may give you some options to pick from. The most common ways of getting the money are:
- Getting the money e-transferred to you
- Getting the money directly deposited in your bank account
- Getting the money directly sent to other lenders, in case you are consolidating debt
- Cash pickup from their store (if they have physical locations near you)
Requirements for Getting Online Personal Loans
To get approved for a personal loan, individuals need to provide some personal as well as financial information. The required information may vary based on the lender; however, some of the common requirements include:
- Proof of identity: A valid government-issued photo ID that can verify that you are a Canadian resident of a mature age in your province of residence.
- Proof of address: You may have to submit an additional document as proof of residence, such as a utility bill, if your identity document does not have an address on it.
- Proof of employment: You may be asked for proof of income to ensure you can pay the loan back. You can submit documents such as recent paystubs, a letter from your employer, T4/T4A slips, etc.
- A bank account: You will have to provide your banking information so that the funds can be deposited into the account and automatic payments can be set up.
Advantages and Disadvantages of Online Personal Loans
| Advantages | Disadvantages |
|---|---|
| Typically have lower credit requirements | Often have high-interest rates |
| No need to visit in person | The borrowing limit may be lower |
| You can get the money within a day or two | Online loans are usually unsecured loans, and secured loans take a few days to process |
| Can help you improve your credit score | Difficult to qualify without proof of stable income |
Application Process for Online Personal Loans
The application process for online personal loans is fairly straightforward. The process can be explained in three simple steps.
Apply Online: The first and foremost step is to submit an online application. Some lenders let you request an online quote before you can submit an application without impacting your credit score. The applications typically take 3 - 10 minutes. The application will usually include your personal details, income information, and contact information. You should typically receive a communication from the lender in the next few minutes or days.
Complete the Formalities: After you receive a decision, you may have to submit some additional information, such as proof of income. You may also have to select your payment schedule, select the mode for receiving funds, and review the offer before finalizing the loan.
Receive the Funds: After accepting the offer, you can get the money in your account in as little as 15 minutes, depending on how you choose to receive the funds.
Finer Details
Before applying for an online personal loan, you must understand the loan characteristics. The main aspects of the loan you should be aware of are listed below.
Interest Rate: Online personal loans are generally unsecured loans and have a higher interest rate than secured personal loans. The average interest rates start at around 19.99%. APR (Annual Percentage Rate) accounts for the interest as well as additional fees and can provide a better idea about the total borrowing cost.
Fees: Apart from the interest, you also pay different kinds of fees to the lender for processing and administering the loan. You may have to pay application fees and origination fees. You might also have to pay closing costs that may include fees for credit checks, fees for title searches, and other miscellaneous costs. You may also have to pay late fees when you are late for a payment and prepayment fees when you repay your loan early.
The fees can add a significant amount to your final cost of borrowing and must be accounted for before you get the loan. It is always better to compare loans based on the APR instead of the interest rate, as it accounts for all the additional fees as well. You must read the fine print of the loan offer to understand all the fees you may have to pay.
Term Length: Online personal loans typically have a term length ranging from 6 months to 5 years. Some lenders offer term lengths of up to 7 years. The term length that you select affects your monthly payments and the total interest that you pay. A shorter term means that your monthly payment would be higher, but the interest you pay over time would be lower. A longer term loan has lower monthly payments, but you will end up paying more interest over the term of the loan.
Processing Speed: Processing speed is the time it takes to process the application and receive the funds. Online loans are typically processed very fast, and you can usually receive the funds in your account within a day or two of applying.
Repayment Schedule: You have the option to select from monthly, bi-monthly, weekly, and bi-weekly payments to repay your loan. You should always make the payments according to the schedule. Some loans may allow you to skip a payment or give you a grace period to make payments without any penalty. Some loans require you to set up automatic payments from your account.
Alternatives to Online Personal Loans
- HELOC: If you own a home, you may be able to borrow money using your home’s equity. A Home Equity Line of Credit (HELOC) is a type of revolving credit that lets you borrow, repay and then borrow again. As the home is collateral, the interest rates are generally lower than personal loan rates. With HELOC, you can borrow only as much as you need and pay interest on that.
- Get a loan online through your bank: All the major Canadian banks offer personal loans to their customers. Most banks will let you apply online through their online banking portals. However, the application and approval process may be much slower than online lenders, and it may take a few days before you hear back from the bank. Banks also have stricter credit requirements and may not approve you for a personal loan if you have a bad credit score. Another thing to note about bank loans is that they usually have a minimum borrowing amount of $5,000.
- Borrow from friends and family: Another simple alternative that's worth a mention is to borrow from your near and dear ones. If you have close friends or relatives who you can confide in, you may be able to share your financial difficulties with them. You may find that some of them may be eager to help you.
- Payday loans: Payday loans let you borrow a small amount of money (generally <$1,500) that you can return when you receive your next pay. Payday loans are very easy to qualify for; however, they usually have very high-interest rates (>40%). Such loans are the least recommended and should only be used in case of emergencies when you’re not able to get a loan through another channel.
FAQs
Lenders typically perform a credit check before approving you for a loan, which affects your credit score. However, some ‘no credit check’ loans are also available in the Canadian market. Such loans typically have high interest rates and low borrowing limits. Some lenders may conduct a soft credit check when you apply, only to determine a rate for you. This won’t affect your credit score. However, the lenders may perform a hard credit check before the final approval.
Do online lenders offer secured or unsecured personal loans?Most online lenders typically offer unsecured personal loans. Secured personal loans are backed by collateral and require more paperwork. Thus, it takes a few days to process a secured loan. Online lenders offer funds to borrowers almost immediately, and therefore such loans are usually unsecured loans.
How long will it take to receive the funds?Most online lenders provide you with the funds within a day or two. Some lenders also claim that they can transfer the funds to your account within 15 minutes of the approval.
What is a personal line of credit?A line of credit is a revolving loan that lets you borrow money when you need (up to the set maximum limit), repay it, and borrow from the line of credit again. You can use the money from a personal line of credit for any personal expense. You can choose to use only a fraction of the amount you are approved for and pay interest only on that. The interest starts only when you start using the money. There is no schedule to repay the borrowed amount; however, you are required to make monthly interest payments on the amount you borrow.