Can You Get A 6-Month Loan In Canada?

Can You Get A 6-Month Loan In Canada?

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated August 17, 2022

During times when you need a little extra cash, a personal loan can come in handy. But rather than commit to a longer-term loan that you don’t really need, you might find a shorter-term loan — like a 6-month loan — more appropriate for your situation. 

Let’s take a closer look at 6-month loans, how much they cost, and what you need to get approved.

Can You Get A 6-Month Loan In Canada?

While banks typically don’t make loans for less than a year, there are alternative online lenders that do offer these shorter-term loans, including 6-month loans. These alternative lenders often have flexible requirements but higher interest rates compared to banks. Interest rates on these short 6-month loans can range on average anywhere from 3% to 46% depending on your credit and financial profile. 

Where Can You Find A 6-Month Loan?

Loan AmountInterest RateTermProvince Availability
Loans CanadaUp to $50,0002.00% – 46.96%3 – 60 monthsBC, AB, SK, MB, ON, QC, NB, NS, PEI, NLLearn More
FairstoneUp to $25,00026.99% – 39.99%6 – 60 monthsBC, AB, SK, MB, ON, QC, NB, NS, PEI, NLLearn More
LendDirectUp to $15,000Started at 19.99%Open-endBC, AB, SK, ON, NS, PEI, NLLearn More
Loan AwayUp to $5,00019.9% – 45.9%6 – 36 monthsBC, AB, ON, NLLearn More

What Are The Eligibility Requirements For A 6-Month Loan?

In order to qualify for a 6-month loan in Canada, you’ll need to meet the following eligibility criteria:

  • Be the age of majority in your province or territory
  • Be a Canadian citizen or a permanent resident
  • Have proof of a steady income
  • Have an active bank account

Steps On How To Get A 6-Month Loan In Canada

Step 1. Compare Your Options

Not all lenders offer 6-month loans, so it’s important to check which lenders do and what are their lending requirements. This can help you narrow your search when choosing a lender. Many lenders also offer instant loan quotes to help you understand how much you can qualify for and what your loan terms may be. 

Step 2. Gather Your Documents

Once you know which lender you’d like to apply with, be sure sure to collect all the necessary documents needed to apply. This may include the following:

  • Personal Details – Your lender may require personal identification documents such as a government-issued photo ID.
  • Financial Details – Your lender may also request your pay stubs and bank statements to verify your income and employment.
  • Banking Details – Your lender may also require your direct deposit information for funding purposes. 

Step 3. Apply For The 6-Month Loan

Most alternative lenders’ loan application processes can be completed online. Simply fill out their online loan application and wait for a response. If approved, you should receive your funds via direct deposit or e-transfer within a few hours to a few days.

Calculate The Cost Of A 6-Month Loan

You’ll eventually need to repay the entire loan amount by the end of the term. But in addition to the loan amount that you take out, you’ll also have to pay other costs as well, including the following:

  • Interest. Lenders charge an interest rate on loans, and the exact rate charged typically coincides with the level of risk associated with the loan. The higher the risk for the lender, the higher the interest will likely be, and vice versa. 
  • Fees. There may also be other fees associated with a 6-month loan, such as early repayment penalty fees, missed payment fees, administrative fees, loan origination fees and so forth. Be sure to find out what these fees are to help you understand exactly how much your loan will cost you.

For illustration purposes, let’s take a look at different loan amounts at varying interest rates to help you compare the costs:

Loan AmountInterest RateMonthly PaymentInterest CostTotal Cost

What To Consider When Getting A 6-Month Loan

Before you apply for a 6-month loan, consider the following factors first:

Repayment Flexibility 

Most 6-month loans come with flexible repayment options to suit your situation. For instance, you may have the choice to repay your loan through monthly, bi-weekly, or weekly installment payments.  

Approval Time 

Online lenders typically approve loan applications very quickly compared to traditional lenders. You can get approved for a 6-month loan in as little as one business day if everything checks out on your loan application, and funding is usually available shortly after.

Lender Reputation 

While most online lenders are legitimate, others are not so trustworthy. It’s important to look out for shady lenders before agreeing to a loan contract. Ideally, the lender should have a transparent privacy policy and comprehensive contact information. They also should not guarantee loan approval or require any upfront insurance payment. 

Should You Get A 6-Month Loan?

These 6-month loans may be better options for those who would prefer to avoid the high risk that often comes with taking out a payday loan. Rather than having to repay the loan in one lump sum and within a couple of weeks — as is the case with payday loans — you can take advantage of a longer term and lower installment payment to repay your debt with a 6-month personal loan from an online lender. 

You can also take out larger loan amounts compared to what you can get with a payday loan, which can come in handy if you have a big expense to cover.

6-Month Loan FAQs

Can I get a 6-month loan with no credit check?

Yes, you can get approved for a 6-month loan without a credit check, depending on the lender you work with. Many alternative online lenders offer no-credit check loans to those who have poor credit. 

Can I get a 6-month loan with bad credit? 

Yes, as mentioned, bad credit is OK when applying for a 6-month loan with many online lenders. Instead of conducting a credit check, these lenders rely more on other factors, such as your income and debt levels.

How much money can I borrow with a 6-month loan? 

Generally speaking, personal loan lenders offer loans between $500 and $35,000. However, shorter-term loan amounts are typically much lower than longer-term loans. Further, the amount you qualify for will depend on your financial profile.

How does a 6-month loan work?

Like other traditional loan types, 6-month loans are paid in installments. Each payment includes both principal and interest components. 

What interest rate will I get on a 6-month loan?

It should be noted that 6-month loans tend to come with higher interest rates compared to longer-term loans. You can expect interest rates between 3% to 46%. 

Final Thoughts

If a long-term loan is a bit overkill for your situation and needs, a 6-month loan might make a better fit. Just keep in mind that these loans may require higher interest compared to longer-term personal loans.

Rating of 5/5 based on 1 vote.

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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