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There are countless loan types available to Canadians. From short term loans to longer term loans, there is an option for everyone and every budget.

However, when it comes to financing a big-ticket item, most consumers like the option of a longer term personal loan. The longer the term, the lower the monthly payment will be. Long term loans can be found at major banks, credit unions and alternative lenders. Depending on where you apply, the requirements to qualify for a long term will vary. Including credit health, income, and debt load.

Long Term Loans In Canada

Depending on what type of loan you have, it can take anywhere from 5 to 35 years to pay off a long term loan. 

  • Mortgages – 25 – 35 year loans are typically reserved for mortgages.
  • Auto Loans – Generally you’ll find car loans ranging between 3 – 8 years. 
  • Personal loan –  While most personal loans range between 6 – 60 months, long term personal loans will usually go up to 10 years. 

Where Can You Get Long Term Personal Loans In Canada?

Loans Canada
Loans Canada
Up to $50,000
Prime to 46.96%
3-60 months
$1,000 - $10,000
19.69% - 46.9%
Spring Financial
Spring Financial
Up to $35,000
9.99% - 46.96%
6 - 60 Months
$1,000 - $25,000
7.5% - 31.5%
36 - 60 months
$5,000 - $35,000
Starting at 9.99%
6 - 60 Months
$500 - $1000+
28% to 32%
3 Months
Consumer Capital Canada
Consumer Capital Canada
$500 - $12,500
19.99% to 34.99%
No minimum term
$500 - $100,000
9.99% - 46.96%
Mogo Finance
Mogo Finance
Up to $3,500
9.9% - 47.72%
Fairstone Financial
Fairstone Financial
Up to $50,000
19.99% - 39.99%
6 - 120
Unfortunately we couldn't find you a provider with the given filters

Types Of Long Term Loans In Canada

Typically, loans, whether they are long term or short term, are divided into two different categories, secured and unsecured.

Secured Long Term Loans

Secured long term loans are backed by some form of collateral, something that has value. The two most common forms of secured loans are mortgages and car loans. With these two types of loans, it’s the item that you’re purchasing that acts as collateral. 

You can also take out a personal loan and secure it against something that you already own. For example, a vehicle you’ve paid off in full. If you ever default on your loan, your lender may seize your collateral in order to recoup some or all of their losses.

How Much Can You Borrow?

Collateral takes some of the financial risks off of the lender. As such, when a loan is secured you are often more likely to receive a larger sum of money. Although this is not always the case.

Unsecured Long Term Loans

An unsecured loan is the opposite of a secured loan in that it does not require any form of collateral. With an unsecured loan, you’re applying for a loan that is not secured by an asset. This means that your approval will be based solely on your financial standing and/or your ability to repay the loan.

Can You Get Long Term Loans In Canada With Bad Credit?

Not too long ago, having bad credit meant that you probably weren’t going to be able to find a reputable lender willing to work with you. Now, while bad credit still isn’t a desirable thing to have. There are a plethora of lenders and creditors who can and will provide you with the long term loans and credit products you want.

Can You Get A No Credit Check Long Term Loan In Canada?

If you’re looking for a long term loan that doesn’t require a credit check, you’ll have very limited options. That’s because almost all long term loans are large loans. A lender is taking on significantly more risk than they do when they provide smaller short term loans. This heightened risk level means that a lender will want to do anything and everything they can to verify a potential borrower’s creditworthiness. Which includes credit checks. This is why you’ll have a difficult time finding a lender who can provide you with a long term loan without a credit check.

However, that shouldn’t deter you from applying with a lender who requires credit checks. The reason is, many alternative lenders accept bad credit. Moreover, there are many lenders who provide loan quotes that can tell you if you have a chance of qualifying before applying.  

Long Term Loans vs. Short Term Loans

Anything under 5 years is normally considered a short term loan. And 35 years is the maximum time it can take you to pay off a mortgage (often considered the ultimate long term loan) in Canada. Although this is of course only a general breakdown of loan terms, you may consider a 5-year loan a short term loan.

One of the main differences between a short term loan and a long term loan is that a long term loan is typically used to cover the cost of a planned expense. Something that you want or need that you’ve created a budget and plan for. And that you know that you’ll be able to afford the cost spread out over a specific period of time. They are also more often than not, used to buy something expensive, for example, a house.

Cost Of A Short Term Loan v.s A Long Term Loan In Canada

Despite the shorter term having a significantly higher interest rate, the amount of interest paid is practically half of what you pay for the long term loan in Canada. Of course, you do have to pay double the monthly payment of the long term. As mentioned, there are benefits to both, and depending on your financial situation, one option may be better than the other. 

Long Term LoanShort Term Loan
Loan Amount$15,000$15,000
Interest Rate7%11%
Term Lenght7 Years3 Years
Monthly Payment$226.39$491.08
Total Paid$19,016.76$17,678.88
Total Interest Paid$4,016.76$2,678.88

Benefits Of A Long Term Loan

As with any type of financial product, depending on what your needs are, certain products will benefit you more than others. Typically, long term loans are provided for a very specific reason, to purchase something like a house or a vehicle, something that most consumers simply don’t have the cash available to purchase outright. With that said, there are definitely some benefits to taking out a long term loan.

  • Smaller More Affordable Payments – When a loan comes with a longer term, it means you’ll be paying it off over a longer period of time so the payments will be smaller. Smaller payments mean you’ll have more of your income at your disposal on a monthly basis. This is, of course, important for those who value having more money available to them to cover both general costs and to make sure they have enough money set aside in case of an emergency.
  • Larger Loan Amount – Typically, long term loans are also larger in size.  So, if you’re looking for a large loan, it’ll generally have a long term.
  • More Options – A long term loan provides you with more options to purchase the things you need. On top of that, it allows you to take advantage of things that you might not be to take advantage of without a loan, for example, a house in the perfect location or a business opportunity.

Drawbacks Of A Long Term Loan

  • High Cost – When comparing two loans and the only difference is the term length, the longer-term loan will cost more. That’s because long terms allow interest to accrue more than short term loans. 
  • In Debt Longer – While you may benefit from lower monthly payments with a long term loan in Canada, it also means you’ll be in debt for a longer period of time. 

Borrow Up To $50,000


Improving Your Credit To Gain Access To A Long Term Loan

Credit is the new “it” word of the financial world. No matter what newspaper or personal finance website you read, you’ll definitely see at least one mention of credit. Everyone wants to know what their credit score is, what information is contained in their credit report, and how to improve it. And we’re couldn’t be more supportive of this. Taking interest in your credit score means you’re ready to take back control of your finances and take action to create the financial future you deserve.

Check Your Credit Report and Score

These days, there are a plethora of websites that can provide you with your credit score for free and every Canadian has the right to question one free copy of their credit report from each of the two credit report bureaus, Equifax and TransUnion. Get out there and check your credit, it’s free so there are no excuses anymore.

Pay Down Debt

If you’re carrying around too much debt, not only will your credit score be negatively affected, but your chances of getting approved for the mortgage or long term loan will also be low. Create a plan, put a budget into action, and do whatever it takes to pay down your debt.

Should You Get A Bridge Loan?

If the long term loan that you’re interested in is a mortgage, there is a great option available to you called a bridge loan. A bridge loan is a short term lending solution for credit-constrained consumers who want to purchase a home in the near future. A bridge loan is like a bridge, as its name suggests because it bridges the gap between getting rejected and being approved for the long term loan you want.

3 Steps On How To Use A Bridge Loan

How Does a Bridge Loan Work?

Step 1. Apply for a Mortgage from a Private Lender

This is your first step onto the bridge. Private lenders are more lenient and often do not require credit checks, but if they do, you’ll be less likely to get rejected because you have a poor credit score. Once you’re approved for a bridge loan from a private lender, you’ll have to work hard to make every single one of your payments on time. A bridge loan typically lasts between 6 months to 2 years, during which your on-time payments will help you improve your credit so that you can move on to the next step.

Step 2: Transfer Mortgage to B-Lender

Once you’re able to improve your credit with your bridge loan, you can refinance it with a B-lender. You should also be able to qualify for a more affordable interest rate. With this loan, your goal is exactly the same as with the previous one, make all your payments on time and improve your credit score so you can finally get approved for the long term loan you want.

Step 3: Gain Access to a Long Term Loan from a Bank or A-Lender

The final stage of a bridge loan is to refinance the mortgage you have with a B-lender, with a bank or A-Lender instead. By this point, you should have improved your credit enough to be eligible to do so at an even lower interest rate.

Choosing The Right Lender 

For anyone looking to apply for any type of loan, our number one piece of advice is to choose the right lender to work with. The right lender is different for everyone; therefore, you need to decide what you want from a lender and then settle for nothing less. Be specific, be focused, and choose someone you trust.

Long Term Loan FAQs

What are the requirements for a long term personal loan? 

The requirements for a  long term personal loan vary by lender, but generally, lenders will require you to be a resident of Canada and be at least the age of majority in your province. Lenders will also look at your income level, employment stability and debt-to-income ratio. 

What kind of fees should I watch out for when applying for a long term loan?

There are many types of fees a lender can try to charge you. The most common fees include loan origination fees, administrative fees, late payment fees, prepayment fees and nsf fees

Where can I get a long term loan in Canada if I have bad credit?

While a bank may reject your application for a long term loan due to bad credit, many alternative lenders will not. There are numerous online private lenders who will lend to those with poor credit. However, they often charge higher rates and fees than banks. 
Caitlin Wood avatar on Loans Canada
Caitlin Wood

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

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