Personal Loans

Living the good life in Canada

What to learn about the application process? Read our no-nonsense guide to applying for a personal loan.

A guide to getting a personal loan in Canada

Am I eligible for a personal loan?

In Canada, to be eligible for a personal loan, you need:

  • A high enough credit score (ideally 650 plus)
  • A regular income (minimums vary between lenders)
  • Outgoing expenses being less than your income
  • To be 18+ years of age
  • To be a Canadian resident

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.

How much can I borrow?

Canadian lenders can provide loans between $1,000 and $200,000. How much you qualify for depends on six main factors:

  1. How much do you want or need to borrow?
    Lenders have minimum and maximum loan amounts they’re willing to lend. So you will need to ensure your desired loan amount is within the lender’s guidelines.
  2. Loan purpose
    Lenders have internal guidelines for what loan purposes they’re willing to loan. Renovations, holidays, cars and medical expenses are everyday loan purposes lenders are willing to lend for. In some instances, they may lend for “general purposes”. However, if you tell the bank you’re looking to go to the casino or buy bitcoin, they may be less inclined to lend.
  3. Security
    If you’re willing to put up security, such as your car, you may be eligible for a higher loan amount. If you’re after an unsecured loan, then you only have access to a small loan amount.
  4. Your income
    The more you earn, the more you can borrow.
  5. Your expenses
    Lenders will check your bank statements to see if you’ve been saving or if your essential expenses are close to your income. The more significant the gap between your income and your expenses, the more you could potentially borrow. Use our loan repayment calculator above to estimate monthly repayment over different loan terms to see the repayment amounts are manageable for you.
  6. Your credit score
    If you checked all or most of the boxes above, your credit score if you’re eligible, your interest rate and ultimately the size of your monthly payment.

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 expenditures, 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.

What interest rate will I receive for my loan?

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.

What does my credit score indicate?

  • 300 – 559: “Very poor”. You’re unlikely to be approved for a personal loan, and if you do, you would have to pay an interest rate over 40%+.
  • 560 – 659: “Poor”. You’re more likely to be approved for a loan if you secure it. However, expect to pay an interest rate of around 30%.
  • 660 – 724: “Fair”. You can expect to pay around 20% APR, and your chances of approval are now significantly higher. It may be worthwhile to consider improving your credit score before applying for a loan to make significant savings.
  • 725 – 759: “Good”. You can expect to pay an interest rate of around 10%.
  • 760 – 900: “Excellent”. Well done! You would expect to pay the lowest interest rate, between 3% to 7% (depending on the lender).


How much of a loan do I qualify for?

This depends on how much you want or need to borrow, the loan purpose, whether the loan is secured, your income, outgoings (expenses) and your credit score. The duration of the loan and your ability to service the loan will be the primary driver determining how much you can borrow.

How long does it take to be approved for a personal loan?

If you have provided all of the necessary information to the bank or lender, and if they don’t need to follow up or verify additional information, you can expect to be approved between 1 hour and two business days. The duration will vary between lenders, depending on their technical and staff capacity.

How long does it take to pay out a personal loan?

If approved, you could receive your funds on the same day. However, in some instances, it could take 1 to 2 business days.

Can I apply online for a personal loan?

Yes. Most Canadian lenders allow you to apply online.