Written by: Bryan Daly
Fact-checked by: Caitlin Wood
If you don’t have a long credit history because you’re a new credit user, or if you’ve struggled with debt in the past, then you might have bad credit. This makes it hard to get approved for a personal loan.
You might also want to avoid having your credit checked for other reasons. For instance, to limit the number of hard inquiries on your credit report.
Luckily, there are many lenders who can offer you a basic loan without having to check your credit at all. Instead, your loan amount, approval odds, and interest rate will depend on your overall ability to make payments as agreed.
The main thing to focus on is finding the right lender. That means some work on your part. There are a lot of legitimate no-credit-check lenders in Canada. However, you have to find them. As with any industry, there are bad actors as well as good lenders. This article wants to help you find the right lender for you.
But first let’s review some financial education.
Is Checking Your Own Credit Score A Credit Check?
When we say no credit check loan, we mean that the lender does not do a hard check of your credit file. Lenders turn to Equifax or TransUnion to check your credit score and your credit history when you apply to borrow money.
If you check your own credit score and credit file, it does not count. You are not lending yourself any money. You can check your credit score for free but it will not count as a credit check.
Can You Get A No Credit Check Loan In Canada?
Yes, you can get a no credit check loan in Canada. This means you can qualify for a loan without having the lender pull your credit report.
What you might notice with no credit check loans is that they have higher interest rates than traditional loans.
That is not special to you. It is not personal that the lender asks for higher interest rates than a bank or most credit unions. The lender is a business but it is also taking a greater financial risk by not doing a credit check on your application.
However, bad credit or low credit scores are not permanent. Also, those with bad credit can still qualify for a no credit check loan so long as they meet the lender’s other criteria including income and debt-to-income ratio.
Best No Credit Check Loans In Canada
|Amount||Interest Rate||Term||Province Availability|
|$500 - $35,000||2.99% to 46.96%||4 - 60 months||Across Canada||Learn More|
|Up to $1,500||Varies by province*||Max 62 days||BC, AB, MB, ON, NB, NS, PEI||Learn More|
|$500 - $750||Varies by province*||90 - 120 days||BC, AB, ON, PEI||Learn More|
|Up to $1,500||Varies by province*||Up to 62 days||BC, AB, ON||Learn More|
|Up to $1,500||Varies by province*||Next payday||BC, ON||Learn More|
|$120 - $1,500||Varies by province*||Max 62 days||BC, AB, SK, MB, ON, NS||Learn More|
|$50 - $1,500||Varies by province*||Up to 31 days||BC, ON, NS||Learn More|
Instant Payday Canada
|Up to $1,500||Varies by province*||Up to 60 days||ON, BC, AB, MB, SK, NS||Learn More|
What Are The Requirements For A No Credit Check Loan?
There are a few personal and financial elements that you’ll need to provide to get approved for a favourable no credit check loan. Although requirements may vary from lender to lender, here are some of the things they may inspect when you apply:
- Income – While some lenders are more lenient, most require you to be steadily employed and have a monthly income of at least $1,000 to $2,000.
- Bank Statements – As proof of your income, you’ll usually have to provide your most recent bank statements (the latest 30 – 90 days). They may also ask for a pre-authorized debit form or VOID cheque for depositing purposes.
- Identification – To confirm that you’re age-appropriate and a permanent resident, lenders will generally ask for one or two pieces of Government-issued photo ID, such as your driver’s license and passport.
- Recent Bills – To verify your address, some lenders will also ask for a utility bill or some other proof of where you live.
- Information About Cosigners or Assets – For obvious reasons, the lender must also inspect your guarantor’s finances and/or any collateral you’re offering.
How To Apply For A No Credit Check Loan In Canada
- Compare Lenders – In order to get the best rate, it’s best to compare multiple lenders. Many lenders offer pre-approvals which can give you an idea of how much money you can borrow and at what cost.
- Gather Documents – Before applying with a lender, be sure to have all the necessary documents to apply. Inaccurate information and missing documents can lead to a rejection of your application.
- Apply – Most lenders have an online application form you can complete in just a few minutes. Here you’ll need to provide information about your identification, contact details, job details, financial information, and bank details.
- Wait For Response – After submitting your application, the lender will review your application and either provide you with a response via email or phone. They may also contact you if they require additional information to assess your application.
- Get Funded – Once approved, the lender will usually send you your funds via direct deposit or e-transfer within 24 hours or less.
Types Of No Credit Check Loans
In Canada, loans come in all shapes and sizes, and so do the lenders that offer them. However, since prime lenders like banks have stricter regulations, the lenders that don’t check credit are often privately owned, which allows them to set their own approval policies. Here are some common types of no credit check loans that you can access by applying with an alternative or subprime lender:
No Credit Check Personal Loans
While you may see payday loans advertised in many areas, you can only find them at select sources, known as payday lenders. On the other hand, almost every lender in Canada, bank or otherwise, offers some form of personal loan.
Personal loans come in various sizes, sometimes ranging into tens of thousands. They can also have different repayment term lengths and installment frequencies, as well as fixed or variable interest rates.
There are two types of personal loans you can find in Canada
Secured Personal Loans
You need to provide collateral in order to get approved. This must be an asset, such as your house or vehicle (you must own its title to qualify). Be careful, because the lender will have the right to seize the asset if you miss too many payments. Nonetheless, providing security can help you access more credit, lower rates, and better repayment terms.
Unsecured Personal Loans
Unsecured personal loans are sometimes smaller and come with higher interest rates, but are easier and safer for anyone who doesn’t have or doesn’t want to risk collateral. Repayment terms are often shorter as well, because you may be considered a higher risk client when you don’t have security. As such, the approval process will be more dependent on your income.
Check out the difference between a personal and a payday loan.
No Credit Check Guarantor Loans
Another form of security that some no credit check lenders will allow is a cosigner, also called a guarantor. This must be a stronger borrower than yourself, someone with healthy finances who can “guarantee” that your payments will be made on time, even if you cannot afford them.
Not only can a guarantor help you access a better loan when you don’t have good credit, but you’ll also have a backup plan if you experience financial problems. Be sure to inform your guarantor or co-signer that they will become responsible for your loan if you default and their finances could be damaged if they also can’t afford the payments.
No Credit Check Car Title Loans
If your vehicle has some value and you’re its official owner, you may be able to use it as collateral in exchange for better loan conditions. Similar to any asset, the lender may be more willing to waive a credit check because you’re providing loan security.
However, before you offer your vehicle as collateral, you must once again be fully aware of the potential danger. While you may be more eligible for a better no credit check loan, your lender will own the vehicle’s title until you complete your payments and will have the right to sell it if you default.
No Credit Check Payday Loans
A payday loan is normally a small sum of $100 – $1,500, with a short repayment term of 14-days (longer terms may be available with some companies). Like most loans, the funds will be deposited directly into your bank account soon after approval.
Payday loans are appealing because they are fast and easy to get. You usually only have to wait one or two days to receive funding and there are very few approval restrictions. Essentially, as long as you have a steady income and you’re a permanent Canadian resident that’s over the age of majority in your province/territory, you can get approved for a payday loan.
Maximum Cost Of A $100 Payday Loan By Province
|Province||Max cost per $100 borrowed||Max Penalty for Returned Cheque||Cooling Off Period||Loan Rollover or Extension|
|Ontario||$15||n/a||2 business days||Not allowed|
|British Columbia||$15||$20||2 business days||Not allowed|
|Alberta||$15||$25||2 business days||Not allowed|
|New Brunswick||$15||$20||48 hours (not including Sundays and holidays)||Not allowed|
|Manitoba||$17||$20||48 hours (not including Sundays and holidays)||Allowed|
|Saskatchewan||$17||$25||Next business day||Not allowed|
|Nova Scotia||$17||$40 (default penalty)||Next business day (or 2 days for online payday lenders)||Not allowed|
|Newfoundland and Labrador||$14||$20||2 business days||Allowed|
|Prince Edward Island||$15||n/a||2 business days||Allowed|
|Quebec||35% AIR||n/a||10 days||Not allowed|
Consider This Before Applying For A No Credit Check Loan
As mentioned, it’s essential to compare lenders before you apply for any credit product, especially a no credit check loan. You can avoid some of the associated risks by asking them (and yourself) these questions:
How Trustworthy Is The Lender?
First, you should check the lender’s credentials to avoid any scams, overcharging, or illegal upfront fees. Find out how long they’ve been a legitimate business, check out their customer reviews, and look them up in the Better Business Bureau database.
How Much Will I Pay Overall?
Thankfully, there are federal and provincial government rules that prohibit lenders from charging illegal rates. That said, your loan payments can quickly add up over time, so it’s best to find a lender who offers the lowest rates and fees possible.
How Long Could I Be In Debt For?
It’s also important to consider the length of your repayment plan. You could be making loan payments for months, even years. Think about what would happen if you lost your job or had an emergency. If your finances couldn’t handle those costs, look elsewhere.
How Adjustable Will Your Payments Be?
Ask the lender if there’s any room for flexibility when it comes to your repayment plan. Can your payments be increased or decreased? Can you make prepayments without penalty? What happens if you make a late or partial payment, or miss one entirely?
|APR||Monthly Payment||Total Interest||Total Cost|
How Can Certain Lenders Avoid Checking Credit?
Unfortunately, it can be hard to get approved for a loan from a bank if you don’t have decent credit. In fact, a credit check is a mandatory part of almost every bank’s lending process. This can limit your options to subprime lenders, where restrictions are easier.
That said, subprime lenders are able to offer no credit check loans to potentially risky clients because they balance out the equation with higher interest rates and fees. So, while you won’t have as much difficulty getting approved as you would with a bank, no credit check loans can be more expensive overall.
Before you apply, make sure to research several lenders in your area and ask them about their associated costs. While you’re doing this, keep in mind that the weaker your finances are, the less affordable loans tend to get. Additionally, your credit situation could get even worse if you miss any of your future payments.
The Benefits Of No Credit Check Loans
There are plenty of reasons why a no credit check loan would be perfect for you, including but not limited to the following benefits:
- Your credit score isn’t as important – Obviously, the best part about no credit check loans is that having bad credit or no existing credit history won’t be a problem during the approval process.
- Approval depends on other aspects – Instead of focusing on your credit or prior debt problems, most subprime lenders simply need to confirm that you’ll be able to afford your payments, interest, and fees.
- Approvals are often quicker – With a bank or credit union, it can take numerous business days just to get approved, sometimes over a week to receive the funds. On the other hand, a no credit check loan may only take one or two days to be approved and deposited.
The Dangers Of No Credit Check Loans
Although there are many good things about no credit check loans, it’s essential to consider the downsides, which no credit product is without:
- Less affordable – As mentioned, subprime lenders often charge higher rates and fees to offset the risk they’re taking by accepting clients who have more chance of defaulting. This is particularly true if you can’t provide security.
- A worse outcome for defaulting – Missing payments can result in higher penalty fees and added interest. Not to mention that if your loan is secured, your car or another asset could get seized as payment. In the case of a guarantor loan, your cosigner could also end up with damaged finances.
- More possibility of scamming – Subprime lenders are harder to regulate and there are many scam artists looking to prey on your need for a solution. They may use your desperation to charge illegally high rates for subpar loans or, even worse, to steal your money, financial information, and identity.
Alternatives To Payday Loans
Despite payday loans being an easy way to receive financing without a credit check, it’s important to understand how hazardous they can be to your finances. This is because:
- Interest rates are extremely high (sometimes 300% – 500% APR)
- Repayment terms are usually only 14 days long
- Many different fees and penalties can apply
- A cycle of high-interest debt can occur if you can’t pay on time
Alternatives To Payday Loans That You Can Get Easily
If you’d prefer to avoid all these payday loan risks, it may be better to leave payday loans in your rearview mirror and consider one of the following alternatives instead:
- Borrow from friends or family
- Get a secured credit card (a deposit is required for approval)
- Join a credit union that approves members who have bad credit
- Cut down on unnecessary costs and improve your budget
- Use your debit or regular credit card to cover your daily expenses
Frequently Asked Questions
Where can I get a no credit check loan?
What do I need to qualify for a no credit check loan?
Are no credit check loans safe?
Need Help Finding A No Credit Check Loan?
If so, don’t worry. Loans Canada is here to lend a helping hand. Whether a no credit check loan is or isn’t the right option for you, we’re always here with the information you need.