Best Personal Loans in Canada in 2022

A personal loan can help save the day when you are in a financial crunch. It can also come in handy when you are financing projects, purchasing a car, paying off an emergency bill, or for debt consolidation.

Finding the best personal loan in Canada for your needs and comparing interest rates can be challenging. This is because lenders have varying requirements before they can approve your application.

They may look at your credit score and income and the loan types they offer may vary such as secured vs. unsecured loans. In some cases, a lender may even ask you to provide a guarantor.

In this article, we compare loan providers and the best personal loan rates in Canada.

Best Personal Loan Rates in Canada

 Maximum Loan AmountLong Term (Months)Interest Rate
LoanConnect$50,0006 – 60 months9.9% – 46.96%
Mogo$35,0009 – 60 months9.9% – 46.96%
Loans Canada$50,0003 – 60 months2.99% – 46.96%
Refresh Financial$25,00036 – 60 months19.99%
Borrowell$35,0006 – 60 months19.99% – 46.96%
LendingMate$10,00012 – 60 months43%

Best Overall for Personal Loans: LoanConnect

LoanConnect works with several top lending providers and offers borrowers a platform to compare loan rates between these lenders.

Instead of approaching each lender individually, you can submit one application on LoanConnect and gain access to the most competitive loan offers.

One way to describe LoanConnect is as a “personal loan engine”.

All kinds of credit scores are acceptable, and you can borrow up to $50,000 with rates as low as 9.90%.

The application process is fast and pre-approvals occur in as little as 5 minutes. You can also receive funds on the same day you apply.

Best Loans for Fair Credit: Mogo

Mogo is a financial technology company that offers several personal finance products to Canadians including loans and free credit scores.

The maximum loan amount available on this platform is $35,000 and interest rates range from 9.90% to 46.96% APR.

To qualify for a Mogo Loan, you must reside in BC, AB, ON, NB, MB, NL, PE, or NS. The service is not available in Quebec.

An advantage of a MogoLoan is that you get 100 days to test drive it. If you are not satisfied with your loan experience within the first 100 days, you can pay back the principal and have any fees and interest already incurred waived.

Also, you continue to receive free score monitoring every month.

Best Unsecured Loan: Borrowell

Borrowell offers one of the best unsecured personal loan rates in Canada if you have a good credit score.

Loan amounts range from $1,000 to $35,000 and interest rates are as low as 19.99%.

When you visit Borrowell for a personal loan, you get access to a variety of loan providers including FreshStart, SkyCap Financial, LendDirect, Refresh Financial, and CHIP Reverse Mortgage.

Borrowell also offers a free Equifax credit score on a weekly basis.

To qualify for a personal loan through Borowell, you must be at least 18 years of age, have steady employment, be a Canadian resident, and have a good credit score.

Best Loans for Bad Credit: Refresh Financial

If no lender is willing to borrow you money because you have a bad credit score, Refresh Financial offers a cash-secured “credit builder” personal loan you can use to improve your credit score.

This loan is unlike a regular personal loan as you don’t get cash up front. Instead, you make payments (biweekly or monthly) into your Credit Builder Loan account and these payments are reported to the credit bureaus: TransUnion and Equifax.

You can withdraw your funds at any time.

The payments you make while in the Credit Builder Program are reported to credit bureaus as an installment loan.

The cash secured loan amount is between $1,250 and $25,000 and has a 19.99% APR.

Best Guarantor Loan: LendingMate

Residents of Ontario and British Columbia can get a guarantor loan through LendingMate.

A guarantor loan involves a borrower providing someone who guarantees that they will pay the loan back if the borrower defaults.

Loan amounts on LendingMate are up to $10,000 and the interest rate is 43% per annum.

This platform does not check your credit score and its main eligibility requirements are:

  • Must be a Canadian resident aged 19 – 75
  • Must not have an active bankruptcy or consumer proposal
  • Provide an eligible guarantor who has a good credit history and can afford to make your monthly payments if you don’t

As per LendingMate, 95% of borrower applications are approved.

Some other personal loan options in Canada are:

Loans Canada

Loans Canada is a loan comparison platform that gives borrowers access to different kinds of loans.

You can use Loans Canada for car loans, debt consolidation loans, business loans, and more.

Loan amounts are up to $35,000 and interest rates range from 2.99% to 46.96% depending on your credit profile.


LendDirect offers a line of credit loan up to $15,000 with rates as low as 19.99%.

You can use the loan for various purposes including debt consolidation, home improvements, car financing, or access to emergency cash.

To apply for a line of credit with LendDirect, you must be at least 18 years old and have a steady source of income.

Magical Credit

Magical Credit provides cash loans to people who have bad credit or no credit history. It is available in ON, AB, BC, NS, NL., NB, and PE.

The maximum amount you can borrow is $20,000 and interest rates range from 19.99% to 46.80%.

This type of loan can help you save a bit on interest fees compared to a traditional payday lender.

What is a Personal Loan?

When you borrow money for personal use, you are said to have taken a personal loan. Some of the more common reasons why people apply for a personal loan are for:

  • Home renovations
  • Car financing
  • Debt consolidation
  • Wedding
  • Emergencies e.g., medical expenses
  • Big-ticket purchases

After taking a personal loan, you are required to pay back the loan over a specific period of time. The amount you pay back is made up of ‘principal’ and ‘interest’.

Principal is the amount you borrowed initially.

The interest rate is the cost of borrowing and is the extra amount you pay on top of the principal.

Interest rate on a loan may be fixed or variable, and is generally expressed as an annual percentage rate or APR.

In addition to the personal loan interest rate, some lenders also charge an origination fee.

Types of Personal Loans

There are various types of personal loans:

1. Unsecured Personal Loan

An “unsecured” loan does not require the borrower to provide collateral. This means you won’t have to use your assets to guarantee the loan.

Unsecured loan lenders check your credit score to determine your creditworthiness and base the interest rate you pay on how good your credit rating is.

2. Secured Personal Loans

A “secured” loan requires the borrower to provide collateral. For example, you may need to guarantee the loan using your home, investment accounts, or vehicles.

Lenders may ask for collateral when a borrower has a poor or bad credit score.

In the case of a mortgage loan, your home is collateral by default.

A secured loan generally has a lower interest rate than unsecured loans since they are less risky for lenders.

3. Guarantor Personal Loans

If a borrower has a bad credit score or they don’t have a credit history, they may qualify for a guarantor loan.

These loans require someone else to co-sign the loan and accept responsibility for paying it back if the borrower doesn’t.

4. Credit Builder Loans

Unlike a regular personal loan, a “credit builder” or ‘cash secured” loan is solely aimed at helping you rebuild your credit.

You don’t get cash upfront from the lender. Instead, you make regular payments into a savings (loan) account for the term of the loan.

The lender reports your payments as installment loan payments and this helps to improve your credit score.

At the end of the credit building program, you can retrieve your funds.

5. Fixed-Rate Personal Loans

These are the most common types of personal loans.

The interest rate is fixed and you make the same monthly payments until the loan is paid off.

6. Variable-Rate Personal Loan

For this type of personal loan, the interest rate you pay varies depending on the Prime Rate.

If the interest rate goes up, a large portion of your monthly payment goes towards interest. When interest rates decline, more of your monthly payment goes towards paying down your principal.

How To Apply For a Personal Loan

While it is easier than ever to apply for an online personal loan without leaving your home, the factors that lenders consider have not changed much.

To start you will want to ensure you know your credit score.

A good credit score (660+) increases your chances of qualifying for credit, while a bad credit score can mean you will be paying a high interest rate.

In addition to your credit score, lenders also want you to:

  • Be at least the age of the majority in your province
  • Be a resident of Canada
  • Have Canadian bank account
  • Show proof of income and/or employment
  • Not have an active bankruptcy or consumer proposal

What to Look For in a Personal Loan

When applying for a loan, you should pay attention to the terms of the offer.

Ensure you understand the interest rates (fixed vs. variable) and how much it will cost you, other fees, prepayment penalties, loan term, and frequency of repayments.

Read the fine print thoroughly so you fully understand what you are getting into.

If you have a decent credit score, you may qualify for a competitively priced personal loan. Check with your bank or credit union to see what they have to offer.

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