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Ontario is the largest province in Canada with approximately 14 million Ontarians living there. It is considered an expensive province to live in due to the high cost of living, particularly in its major cities like Toronto, Brampton, Mississauga, Markham, Oshawa, Ottawa and Barrie. For a 2-bedroom apartment, rent alone can cost Ontarians $2,000 a month depending on the city they live in.
Other costs like insurance, daycare, transportation and general activities can also have a big impact on cash flow for many Canadians in Ontario. If you’re struggling to cover certain costs or need extra cash to cover an expense, a personal loan can help.
Personal loans come in the form of cash that is deposited directly into your bank account. As such, you could use your personal loan to pay for any expense or activity in Ontario:
A handful of provinces in Canada have a framework designed specifically to deal with high-cost credit loans. However, Ontario has not yet adopted such a framework, though there are talks of such regulations coming in the near future.
In January 2021, a proposal was created with suggestions surrounding how business practices can be improved in Ontario to better protect consumers in the high-cost credit industry. Right now, only British Columbia, Alberta, Manitoba, Quebec, and Newfoundland have regulations in place to govern these costly loan products, but Ontario still has not cemented such regulations.
Max Interest Rate | Currently, there are no provincial interest rates or fee limits on high-cost credit lenders (other than payday lenders) in Ontario. However, lenders must follow the federal Criminal Code interest rate limit of 60% (APY), which is equivalent to 47% (APR). |
Fee Caps | While there are no provincial caps on fee charges, there are federal rules. The total fees, cost and interest of a high-cost personal loan cannot be more than the criminal interest rate of 47% APR. |
Licensing Requirements | Alternative lenders (other than payday lenders) are not required to be licensed in Ontario. |
Debt Collection Rules | While there are consumer protection rules on how collection agencies can contact borrowers, none such exist for high-cost credit lenders (other than payday lenders). |
Lenders in Ontario often examine your credit scores as part of their application procedure to determine your creditworthiness. If you have bad credit scores, it can be difficult to get a personal loan from a traditional bank in Ontario, however, there are alternative lenders in Ontario who look beyond your credit during their underwriting process.
Normally, a score of 650 or above signals that your credit is solid and gives you the best opportunity for approval in Ontario, as well as a favorable interest rate. Depending on your lender, a score below that level may still be acceptable. However, your interest rate might end up being higher, ultimately making the loan more expensive over time.
Lenders in Ontario will require a number of personal and financial information from you in order to assess you for a personal loan. Generally, you can expect to provide the following:
When you apply for a personal installment loan in Ontario, the approval process will typically involve an instant bank verification (IBV) process. Lenders use IBV to quickly verify your identity and income, without you having to provide any documents. Instead, you simply sign into your bank account through a secure portal hosted by a reputable third-party provider.
Through IBV, the lender will receive a read-only copy of your bank statement, which they’ll use to identify and verify your income.
There are several factors that lenders look at when assessing your loan application. Lenders want to make sure that you have the financial strength to make timely loan payments. And to do that, they’ll look at your income, debt levels, credit score, and other factors.
To boost the odds of getting approved for a personal installment loan, consider the following tips:
Lenders look at credit scores as a way to estimate how likely you are to repay your loan. The higher your credit score, the more likely you’ll be approved, and the lower your interest rate will be. If your credit score is lagging, take some time to give it a boost.
Find out where you’re starting from by checking your credit score for free on Loans Canada’s CompareHub tool.
A cosigner is someone with good credit and strong financials who guarantees the loan on your behalf. If you’re unable to continue making loan repayments, the cosigner will take over. This reduces the risk for the lender and may improve your chances of getting approved for a loan.
Secured loans are backed by collateral. This lowers the lender’s risk, since the asset can be seized and sold to cover the lender’s losses if you default on your loan. If possible, consider adding a valuable asset, such as your home or car, to increase the chances of loan approval. Just keep in mind that using collateral can be risky, as you could lose possession if you fail to keep up with your loan payments.
If you’re carrying a lot of debt, that could weaken your loan application. Before applying for a short-term loan or personal installment loan in Ontario, take some time to pay down your existing debt. This will improve your debt-to-income ratio and make it easier to get approved for a loan.
Yes, many lenders accept non-traditional forms of income, such as EI. Many of these alternative lenders provide a quick and easy online loan application and often approve loan applications within 24 hours.
Do note, however, that applying for a personal loan while on EI will likely mean that you’ll pay higher interest than you would if you were traditionally employed and earning a steady income. This is because the risk for the lender increases when dealing with non-traditional income sources such as EI.
A great option for those looking for work is to use the services of a staffing agency. These companies network with employers in the local area and are able to help job-seekers fill job vacancies. There are several employment agencies in Ontario that specialize in recruiting unemployed residents.
Here are a few to consider:
Quality Staffing Pro connects job seekers with businesses in Ontario looking for reliable and hard-working employees. The company has headquarters in Toronto and Oshawa, but services all residents of Ontario. You’ll find jobs of all sorts, including contract, temporary, and permanent positions. Job openings are available in a wide variety of industries, including administrative, data analysis, general labour, and management.
LRO Staffing is an employment agency headquartered in Ottawa that services job seekers in Ottawa and Toronto. The company specializes in recruiting and placing employees in permanent, temporary, and contract positions across several markets in Canada, including administrative, finance, human resources, marketing, construction, government, and manufacturing, among others.
Headquartered in Sudbury, Workforce Inc. is staffed with a team of recruiters who have all received their Certified Personnel Consultant designation. The company services job seekers in Sudbury, Sault Ste. Marie, Thunder Bay, Timmins, and Toronto.
Workforce Inc. focuses on filling jobs in skilled trades, labour, and professional designations. You’ll find jobs like Mine Technicians, AZ Truck Drivers, Logistics Coordinators, Receiving Clerks, Electrical Designers, Machine Operators, and General Labours, to name a few.
If you require financial assistance, there are other options that may be available to you as an alternative to a personal installment loan in Ontario, such as the following:
Financial Resource | |
Ontario Works | Learn More |
Ontario Disability Support Program (ODSP) | Learn More |
Low-Income Energy Assistance Program | Learn More |
Ontario Guaranteed Annual Income System (GAINS) | Learn More |
Ontario Child Benefit | Learn More |
In addition to the above-mentioned programs, many other financial assistance programs are available in Ontario to help residents cover the cost of basic necessities. An easy way to find these resources is by searching www.211.ca, a website that connects Canadians with various services. Here are a few programs available to Ontario residents:
Many low-income residents in Ontario struggle to keep up with the cost of utilities. To offset these costs, financial assistance programs are available in Ontario to help pay for gas and hydro bills, such as the following:
An increasing number of residents in Ontario are struggling to afford mortgage payments and rent. To ward off potential homelessness as a result of the housing affordability crisis, the Canada Ontario Housing Benefit (COHB) program is available. This program provides eligible Ontario residents with a housing benefit to help with rental costs in private housing markets anywhere in Ontario.
To qualify for the COHB, applicants must live in Ontario and be on the waiting list for social housing. The benefit pays the difference between 30% of the household income and the average rent in the area.
More and more Canadians are turning to food banks to help provide nourishment as the cost of groceries continues to rise. Fortunately, there is no shortage of food banks throughout Ontario, such as the following:
Businesses in Ontario have specific rules to follow when it comes to how they deal with consumers. The Ontario Consumer Protection Act sets out various consumer protection laws that businesses must follow. The goal is to protect consumers and ensure they’re treated fairly.
If you believe that you’ve been unfairly treated by a business, you can reach out to the Consumer Protection Division:
If you want a personal loan to pay for something essential, the time to apply is now. Loans Canada can help set up with a lender in Ontario who can offer you terms and conditions that best meet your needs. Simply click the “apply today” button to get started!
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