How To Get A $10,000 Loan In Canada

If you’re looking to borrow $10,000, you should take some time to find out where you can get one and the options available to you based on your financial and credit profile. A $10,000 loan can be just what you need to cover the cost of large, pressing expenses that your current finances aren’t enough to pay for. 

Read on to find out how to get a $10,000 loan in Canada.

How To Get A $10,000 Loan In Canada

There are different sources you can get a $10,000 loan in Canada, but depending on your financial and credit profile, one option may be better than the other. Here are the three main sources you can get a $10,000 loan in Canada: banks, credit unions, and alternative online lenders. 

$10,000 Loans With Banks

A traditional bank will usually have stringent lending criteria, such as a high income and good credit. If you meet these requirements, you can typically get a $10,000 loan at a low-interest rate, making the loan more affordable. 

$10,000 Loans With Credit Unions

While credit unions may have more flexible requirements than a bank, you must be a member of the credit union to apply. That may make it difficult to get approved for a $10,000 loan. But if you do qualify, credit unions usually offer lower fees and more personalized service. 

$10,000 Loan With Online Personal Loan Lenders

Alternative lenders also offer $10,000 personal loans in Canada. They usually have more flexible lending requirements, so their loans are easier to obtain. However, interest rates with personal loan online lenders are generally higher compared to those offered by banks and credit unions.

Types Of $10,000 Loans You Can Get In Canada

Loans for $10,000 come in different varieties. The one you choose will depend on your needs, your financial health, and your credit score. Let’s take a look at the types of $10,000 loans that may be available to you.

Secured Loans 

A secured loan is one that is backed by an asset of value. In the event that you default on your loan, the lender can repossess that asset and sell it to recoup any losses. Because of this collateral, secured loans are considered less risky for lenders.

Unsecured Loans

An unsecured loan is not collateralized with an asset of value. Personal installment loans are typically unsecured. As such, these loans are riskier for lenders if you default on the loan. In turn, the lender will usually charge a higher interest rate to offset this risk. 

Personal Line of Credit

A personal line of credit works much like a credit card: your lender will approve you for a specific credit limit which you can withdraw from at any time. You’re only charged interest on the withdrawn amount, and once you repay those funds, you’re free to borrow against your line of credit again and again. 

This type of financing arrangement is convenient when you need access to extra funds on occasion. Instead of reapplying for a loan over and over, you can simply tap into the line of credit you already have open. 

No Credit Check Loans

Some lenders offer $10,000 loans without conducting a credit check, which may be an attractive option for those with bad credit. In lieu of a credit check, these lenders might place more emphasis on other factors, like your income, what’s in your bank account, and your job. 

Just be wary of lenders who “guarantee” loan approval, even without a credit check. These lenders are often predatory and can put you in a precarious situation to repay a loan you can’t afford. Legitimate lenders will want to look at your situation before approving your loan application and won’t make any promises upfront of guaranteed loan approval. 

Guarantor Loans

If you can’t get approved for a $10,000 loan on your own merit because of poor credit, insufficient income, or another issue, you may be able to get a loan with the help of a guarantor. With this loan arrangement, the guarantor promises to take over the payments in the event that you’re unable or unwilling to make them yourself. 

Co-Signed Loans

A cosigner serves a similar purpose as a guarantor in that they both sign a loan agreement when the original applicant is unable to get approved on their own. The cosigner takes on the full responsibility of the loan with the original applicant. If any payments are missed by either cosigner, this could potentially affect both of their credit.

Instant Loans

If you apply for a loan with an online lender, you can get pre-approved instantly after completing an online application. If approved, you can get access to the funds within the day. 

Bad Credit Loans

If you have bad credit, you’ll likely have little luck getting approved for a $10,000 loan with a bank or credit union. Instead, you’d be better off applying with an online lender. With these lenders, you can get approved for a loan even with poor credit. However, you may be charged a higher interest rate.

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How Much Does A $10,000 Loan Cost?

In addition to the original $10,000 you borrow, you’ll also need to pay other costs associated with the loan, including the following:

• Interest Rate. Lenders charge interest on the loan amount, which is how they make money. The higher the risk the lender assumes, the higher the rate will be, generally speaking.  
• Loan Term. A longer loan term means you’ll have more time to repay your loan and your monthly payments will be smaller. But, this also means you’ll pay more interest and the overall cost of your loan will be higher.  
• Fees. Lenders may charge a variety of miscellaneous fees, such as loan origination fees, NSF fees, late fees, and early repayment fees.
• Loan Insurance. An optional fee that may be added to the cost of your loan is insurance, which will provide coverage in case you’re unable to pay the loan due to job loss, disability, and so on. Just be wary of lenders who say insurance is required because it’s not. 

So, how much will a $10,000 loan ultimately cost you? The following chart outlines a few scenarios with different loan terms and rates on a $10,000 loan.

Check out how much a 29.99% APR loan vs a 29.99% AIR loan costs. 

How To Qualify For A $10,000 Loan In Canada

In order to be eligible for a $10,000 loan, you need to meet the following criteria:

• Earn a steady income and have proof of such income
• Have an active bank account
• Have a Canadian address
• Provide valid contact information
• Have a healthy credit score (if applicable, depending on the lender)

You’ll also need to prove your identity with a driver’s license, passport, or another official government-issued document. 

How To Apply For A $10,000 Loan In Canada

Before you apply for a $10,000 loan, make sure this is the right amount to take out. You don’t want to borrow any more than you need to, as you want to keep your borrowing costs as low as possible. 

You should also consider where to apply for a $10,000 loan. If you have a very good credit score and strong financial profile, applying with a bank or credit union might be a good option, as you’ll likely get approved with a competitive interest rate. But if your credit score is lagging, you might want to apply with an online lender instead. 

In this case, applying is easy and can be done entirely online. You’ll need to complete the online application by providing a few pieces of information about yourself, including the following:

• Full name
• Date of birth
• Contact information
• Employment information
• Social Insurance Number (SIN)

You may be asked to upload certain documents for the lender to look over to determine your ability to repay the loan. Online lenders will often provide near-instant approval if everything checks out, and you can expect the funds to be deposited into your account within 24 hours.

When applying with a bank or credit union, the process can take a week or longer to complete.

Final Thoughts

Before applying for a $10,000 loan, consider the different lenders, interest rates, fees, and payment options available to you. And if your financial and credit profile doesn’t meet the requirements of your bank or credit union, you can always look to an online lender for your loan.