Filters
- Amount
- Up to $35,000
- Rate
- 9.99% – 34.95%
- Term
- 9 – 78 Months
- Amount
- Up to $60,000†
- Rate
- 19.99% – 34.99%*
- Term
- 6 – 120 months
- Amount
- Up to $10,000
- Rate
- Varies by product
- Term
- Varies by product
Whether you’re looking to cover a small or large expense, a personal loan can be a good option. It’s often a better alternative to a payday loan, offering more flexible terms and affordable payment options. Moreover, you can use a personal loan to cover any expense you have, from groceries to home repairs; there are no restrictions.
If you have bad credit, you can still get a personal loan; you just need to know where to look. Below, we’ll guide you through everything you need to know about getting a personal loan in Ontario.
What Is A Personal Loan?
A personal loan involves receiving a lump sum of money that you repay in installments with interest over a period of time.
- How Much Can You Borrow? – You can generally find a loan up to $35,000 with most personal loan lenders. However, higher amounts may be available, especially if you offer collateral or have a cosigner.
- What’s The Best Interest Rate? – Interest rates for personal loans usually range between 9.99% to 35%.
- What Kind Of Terms Can You Get? Most personal loans have terms between 3 months to 5 years. However, you can find longer terms with some lenders.
Can I Use A Personal Loan For Any Expense?
Yes, there are generally no restrictions on what you can use a personal loan for, including:
- Utility Expenses – Pay your cell phone bill or water heater bill using a personal loan. You can even use it to buy out of your water heater rental contract.
- Vacations or a Local Trip in Ontario – While it’s not recommended that you use a loan to pay for a trip, it is an option if you know 100% that you can pay it off with ease. So, whether you want to go camping at Ontario Parks, the Algonquin Provincial Park, Bruce Peninsula National Park or any of the other major parks in Ontario, a personal loan can make your trip affordable.
- School Tuition and Supplies – Many students rely on OSAP in Ontario; however, not everyone qualifies. A personal loan can help cover the cost of your education in Ontario.
- Car Repairs and Maintenance Costs – In Ontario, auto insurance can cost an arm and a leg in certain cities like Toronto. Many Ontarians opt for less coverage as a result. If you have an accident and your auto insurance isn’t able to cover the entire bill, you could use a personal loan to cover the cost.
Learn more: Personal Loans
Are You Eligible For A Personal Loan?
While requirements for a personal loan vary by lender, you generally need to meet the following to be eligible for a personal loan:
- Residency – You must be a resident to be eligible for a loan. If you’re a newcomer or are on a temporary status, you may need to meet additional requirements.
- Age – Be the age of majority within the province you live in, which is 18 years old in Ontario.
- Income – You’ll need to earn a consistent income that meets the lender’s minimum income threshold.
- Debt-To-Income (DTI) Ratio – Most lenders will evaluate how much debt you have in comparison to your income. Most prefer that you have a DTI of 32% or lower.
| What Credit Score Do You Need To Get A Personal Loan? Lenders in Ontario often examine your credit scores as part of their application procedure to determine your creditworthiness. Normally, a score of 660 or above will give you the best opportunity for approval in Ontario, as well as a favourable 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. |
Learn more: Personal Loan Requirements: How To Qualify For A Personal Loan
Can You Get A Personal Loan With Bad Credit?
Yes, while it may be tough to qualify for a personal loan with a bank when you have bad credit, many private lenders provide loans to individuals with bad or no credit.
These lenders have different requirements from traditional financial institutions and approve their applicants based on their overall financial health. Your level of income, your job stability and your debt level are some common factors they’ll use to determine your creditworthiness.
That said, it’s important to note that while these lenders are easier to get a loan from, they often charge higher interest rates and fees than banks.
Learn more: How To Get A Loan In Ontario If You Have Bad Credit
Where Can You Get A Personal Loan In Ontario?
You can get a personal loan from a bank, credit union, or private lender.
Banks: If you have good credit and strong finances, you can opt for a personal loan from traditional banks with competitive rates and flexible terms. While personal loans from these institutions are the most affordable option, their application and funding process is usually slow.
Credit Unions. Credit unions are a great option for those with less-than-perfect credit or finances, as they offer flexible terms and lower interest rates to all members. However, to be eligible, you must be a member, which can be location-specific.
Private Lenders: Private lenders are available to anyone, including those with bad credit or no credit. They’re also a great option for those looking for fast funding, as many offer same-day approvals and funding. However, while these lenders are a great option for those looking for easy and fast approvals, they do charge higher rates compared to banks.
Can You Get A Personal Loan Online?
Yes, you can apply for a loan online from anywhere in Ontario, depending on the lender. Nowadays, almost all lenders offer loans online.
| Fairstone | Personal loans are available online and in person. | Learn More |
| easyfinancial | Personal loans are available online and in person. | Learn More |
| Spring Financial | Personal loans are available online only. No Physical branches are available. | Learn More |
| LoanMeNow | Personal loans are available online only. No Physical branches are available. | Learn More |
Is Applying For A Loan Online Better Than Applying In Person?
Applying for a personal loan online can be much more convenient than applying in person for a number of reasons:
- Convenience. With online personal loans, you can apply from anywhere and oftentimes at any time, including nights and weekends. Applications are accepted and reviewed with 24 hours for many lenders.
- Speed. Many online personal loan lenders have partially automated their underwriting process, leading to faster approvals and funding.
- Easier To Compare – Many personal loan lenders offer pre-approvals or loan quotes online. This makes it easier to compare options and choose one that best suits your needs.
While there are many benefits to applying online, applying in person may be better if you need personal guidance.
How To Apply For A Personal Loan
Step 1: Get Pre-Approved
Before applying for a personal loan, get pre-approved with multiple lenders first. This will allow you to compare various loan offers based on your financial situation. Moreover, the pre-qualification process is often instant and only requires a “soft” credit check, so it won’t negatively impact your credit scores.Step 2: Choose A Lender
Compare your loan offers and choose one that comes with affordable rates and favourable terms. Be sure to also compare funding times if you need the cash urgently.Step 3: Gather All Required Documents And Apply
You’ll need to provide your lender with specific documents to verify your creditworthiness and identity. You can upload these documents and submit them electronically with your application. This may include a government-issued photo ID, bank statements, pay stubs and other related documents. Be sure to read over the application to make sure all the information is accurate.Step 4: Wait For Approval
Once you’ve submitted the application you should receive a response shortly after. If approved, the funds will be deposited into your account within 24 to 48 hours (via direct deposit or e-Transfer), depending on the lender.Learn more: How To Apply For A Loan
| What Is Instant Bank Verification? 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. |
Important Provincial Regulations You Should Know When Applying For A Personal Loan
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 soon.
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 35% (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 35% 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). |
Has Your Lender Treated You Unfairly? Reach Out To Consumer Protection Offices In Ontario
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 you’ve been unfairly treated by a business, you can reach out to the Consumer Protection Division:
- By telephone: 1-800-889-9768
- By email: consumer@ontario.ca
- In person: 900 Bay St. #6, Toronto, ON, M7A 1L2
What To Consider Before Applying For A Personal Loan
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:
Improve Your Credit Score
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.
Get A Cosigner
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.
Secure The Loan With An Asset
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.
Pay Off Some Debt Before Applying
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.
Get A Stable Job
As mentioned before, lenders like to know that you receive a consistent income. While some lenders may accept non-employment sources of income such as disability, pension or other government benefits, employment income is generally the most preferred.
If you’re struggling with finding a job, consider working with a staffing agency. These companies network with employers in the local area and are able to help job-seekers fill job vacancies. Many employment agencies in Ontario specialize in recruiting unemployed residents.
Here are a few to consider:
Quality Staffing Pro | Offers 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 | 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. |
| Workforce Inc. | 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. |
How To Calculate Your Personal Loan Cost
To calculate your personal loan’s monthly payments and overall cost, you’ll need to consider the following factors:
- Loan amount – The higher your loan amount, the higher your monthly payments and costs will be.
- Loan term – While longer terms help lower your monthly payments, the more interest you’ll pay over the period and vice versa.
- Interest rate – Ensure you consider the APR, which includes the cost of interest and any fees.
You can calculate your personal loan payments and overall loan cost by using this online personal loan calculator.
When Is A Personal Loan The Right Option?
A personal loan can be a good option for:
- Versatility – Unlike car loans or mortgages, a personal loan can be used to pay for anything.
- A Low Interest Rate – Personal loans usually come with lower interest rates than most credit cards, making it a more affordable option.
- More Flexible Payment Options – Most personal loans are offered with different payment period options (monthly, semi-monthly, weekly, bi-weekly, etc.). They also come with terms that range from 3 months to 5 years or more.
Learn more: Pros And Cons Of A Personal Loan
When Is A Personal Loan The Wrong Option?
A personal loan may not be a good option for you if:
- You Have Unstable Income – If you have an unpredictable income, getting a loan with fixed monthly payments can put you at financial risk. Missed or partial payments can lead to various penalties and a negative impact on your credit score.
- You Need It For A Small Expense – While a personal loan can be used to cover small expenses, it’s generally best to use it for major expenses or emergencies. Taking on debt for small expenses or non-essential items can provide immediate access to the item you’re buying; however, it can also lead to more long-term financial stress.
Can’t Get A Loan? Check Out These Financial Assistance Programs In Ontario
Many other financial assistance programs are available in Ontario to help residents cover the cost of 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:
Financial Assistance For Utility Bills
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:
- Ontario Energy Board’s Low Income Energy Assistance Program (LEAP). This program provides up to $1,000 in emergency financial assistance to help low-income Ontario residents pay their gas or electricity bills.
- Ontario Electricity Support Program (OESP). This program applies a monthly credit directly to electricity bills.
Housing Affordability Assistance
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’s income and the average rent in the area.
Food Banks
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:
- Native Women’s Resource Centre of Toronto Food Bank: 230 College St, Toronto, ON, M5T 1R
- St Joseph’s Parish, St. Joe’s Supper Table: 151 Laurier Ave E, Ottawa, ON, K1N 6N8
- Thunder Bay Food Bank: 129 Miles St E, Thunder Bay, ON, P7C 1J5
- Windsor Goodfellows Food Bank: 401 Park St W, Windsor, ON, N9A 5V4
Additional Government Benefits Available In Ontario
Bottom Line
If you’re thinking about a personal loan to cover an important expense, it’s essential to explore your options carefully. Comparing lenders can help you find the best offer for your financial situation. Loans Canada provides access to a network of lenders across Ontario, making it easier to find a loan that fits your needs.
