If you tick all of the above boxes, then you may be eligible for a loan. Read further to learn how much you can borrow and what’s involved in the loan application process.
Canadian lenders can provide loans between $1,000 and $200,000. How much you qualify for depends on six main factors:
How to apply for a personal loan?
1. Check that you’re eligible
Have a reasonable credit history, a regular income that matches or exceeds the lenders minimum, have your expenses under control, are 18 years or older and a Canadian resident? Great, let’s proceed to step 2!
2. Choose your loan purpose and desired loan amount
Choose whether your is for debt consolidation, a house extension, a car or any other expense that won’t be frowned upon by the banks. Now figure out how much you want or need to borrow.
3. Compare the personal loans
Use the loan repayment estimator tool at the top of the page to enter your desired loan amount and the loan term—the. Note that if you choose a longer-term loan, your monthly repayments will be smaller, consider this when thinking about how much you can afford to repay per month. The flip side to a longer-term loan is that you will pay more interest over the life of the loan.
4. Prepare for the personal loan application
During your loan application, you will need to have the following things ready:
- Home address, phone number and email address.
- Proof of residence. A recent utility bill such as your telephone or electricity bill.
- Proof of identity. A Government-issued ID such as your driver’s licence or Canadian passport.
- Social Insurance Number (SIN) and date of birth (DOB).
- Bank statements (up to 3 months).
- Bank account details for where you want your loan to be deposited.
- Employer details. The name of your employer, time employed, address and phone number.
- A list of your expenses.
- Proof of expenses and expenditure, such as your mortgage statements, electricity bill, etc. However, most of this will be visible in your bank statement.
- Self-employed or a director of a company? You may also be asked to provide a letter from your accountant asking about your company’s financial position.
The lenders want to see a lot, don’t they?! They may also ask to know your marital status (“it’s complicated” isn’t typically an option) and if you any kids or dependents. So nosey!
5. Apply for the loan
Now that you’ve compared the personal loans and have all the necessary information nearby, it’s time to apply with your preferred lender by clicking the “GO TO SITE” link in the table above. Most lenders will allow you to apply online, but you may have to call or apply at a branch in some cases.
Applying online should take around 10 to 20 minutes. If you have all that information ready, the application should be a breeze.
6. Wait and respond as necessary
Once you’ve submitted your application, it’s time to play the waiting game (it’s boring, and it may cause a little anxiety!). Good luck! Waiting for a response may take minutes, but give them up to 2 business days.
At this stage, bank staff (the underwriters) will receive your application and review the details you have provided. They will check to ensure you have provided all of the necessary information and that there are no irregularities or red flags. What could be considered a red flag? A low credit score, evidence of excessive gambling or unaccountable expenses, etc.
Some lenders may call your employer to confirm employment. If additional information is required or if they need clarification, they will give you a call.
7. You receive the response
Hopefully, you’ve been approved! If so, you’ll either receive a call from one of the friendly representatives or you will receive an email. In either case, you will be explained and asked to review the loan agreement. The agreement will outline information such as your loan amount, interest rate (APR), fees, repayment amounts, and a bunch of other legal mambo jumbo.
If you choose to accept the personal loan, you will have to check all the boxes and click accept or provide a verbal confirmation if your receive a call.
Once confirmed, you will also receive a copy of the contract in your email inbox or postal mailbox.
8. Receive the funds (drawdown)
Phew! Now that’s all over; the lender will send funds to your nominated bank account. You may receive the money on the same day, or you may have to wait one business day.
Interest rates in Canada vary between 3% and 47% APR and vary between lenders. The primary determinant will be your credit score and credit history. The higher the credit score, the lower your interest rate.
The average Canadian credit score 650. 20% of Canadians have a score lower than 600. If your credit score is lower than 600, you may find it more difficult to acquire credit.