How To Get A $20,000 Loan In Canada

How To Get A $20,000 Loan In Canada

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated September 21, 2022

A $20,000 personal loan can help you cover all sorts of expenses. Maybe you’re planning to buy a car or are looking to renovate your home. Or perhaps you have college tuition bills to pay or an expensive medical procedure.

Whatever the need may be, a $20,000 loan can help cover and spread the cost. Read on to find out how to get a $20,000 loan in Canada. 

Where Can You Get A $20,000 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
Mogo$300 – $35,0009.9% – 47.72%24 – 60 monthsBC, AB, ON, 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
Borrowell$1,000 – $35,0005.99% – 29.19%36 – 60 monthsBC, AB, MB, ON, NB, NS, PEI, NLLearn More
easyfinancial$500 – $20,00029.99% – 46.96%9 – 84BC, AB, SK, MB, ON, QC, NB, NS, PEI, NLLearn More
Symple Loans$5,000 – $50,0006.99% – 22.99%Up to 84BC, AB, MB, ON, NB, PEI, NLLearn More
Lendful$5,000 – $35,000Starting at 9.9%6 – 60BC, AB, SK, MB, ON, QC, NB, NS, PEI, NLLearn More
Consumer Capital Canada$500 – $12,50019.99% – 34.99%12 to 60 monthsBC, AB, SK, MB, ON, NB, NS, PEI, NLLearn More

How To Get A $20,000 Loan?

There are a number of reasons you can get rejected for a $20,000 loan, as such it’s important you do your due diligence and organize your finances and documents prior to applying with a lender. Follow these steps to find, apply for, and get access to a $20,000 loan:

Step 1: Research Lenders

As mentioned, there are a few different types of lenders you can consider getting your $20,000 loan from. Take some time to research the eligibility requirements, as well as the rates and terms each lender offers for the loan amount you require. 

You can also use an online loan aggregator to help you find the different lenders available who can offer you a $20,000 loan based on your credentials. Then, you can compare the rates and terms they each offer before deciding who to apply with.

Step 2: Determine The Loan Type You Need

Personal loans come in different variations. For instance, there are secured and unsecured personal loans, and fixed- versus variable-rate loans

A secured loan means you’ll need collateral to back the loan, which may help you get a better rate. Unsecured loans don’t require collateral, which means you don’t have to risk any asset of value, though these loans may come with a higher rate.

A fixed-rate loan means the interest rate remains unchanged throughout the loan term, while a variable-rate loan means the rate will change along with the Prime Rate. Consider all loan options before applying.  

Step 3: Make Sure You Can Afford A $20,000 Loan

Before you decide how much to apply for, make sure your current finances can accommodate the loan payments needed to pay the loan off. Look at your income and all the monthly expenses you currently cover, and see how much you have left over. Then, look at the various loan terms and payment options that work within your budget.

Step 4: Find Out What Your Credit Score Is

Your credit score can heavily influence your interest rate for a $20,000 personal loan. Find out what your score is by pulling a copy of your credit report from the major credit bureaus in Canada. Knowing what your score is will give you a better idea of how strong your loan application will be when applying for a loan.  

Step 5: Gather Relevant Paperwork

Find out exactly what information the lender needs, and provide it. This can include documents such as bank statements, a letter of employment, and government-issued photo ID. 

Typical Required Documents
Personal Loan– Name, date of birth, contact information
– 1 or 2 government-issued IDs (1 photo)
Social Insurance Number (SIN)
– Proof of employment (income, employers name, job title)
– Loan purpose- 3 months’ worth of bank statements
– Bank account details (for direct deposit and withdrawal of payments)

Step 6: Complete the Application

Once you have all the information you need to complete your application, fill it out in its entirety and review it for accuracy. If you’ve already been pre-approved, this process should be much quicker. Once the lender has reviewed your application and verified your credit (if applicable), you’ll receive an answer about whether or not you’ve been approved for a $20,000 loan.

If you’ve applied with a bank or credit union, you might be waiting a week or more. If, on the other hand, you’ve applied with an online lender, you should receive a notification within a day or two. 

Step 7: Get Funded

Once your loan has been approved, you’ll receive your funds via direct deposit or an e-transfer. Again, how quickly you access the funds depends on whether you applied with a conventional or alternative lender. Generally speaking, alternative lenders release funds much faster than traditional loan providers. 

What Do You Need To Qualify For A $20,000 Loan? 

The requirements for a $20,000 loan will vary by lender. Some lenders will have more flexible requirements than others, however, there are a few factors that most lenders will check when approving a borrower: 

  • Income And Job Stability. You’ll need to provide a letter of employment or pay stubs to prove that your income is adequate enough to cover loan payments. 
  • Debt-To-Income Ratio – You may also need to show documents related to your current debts. While your income may be strong, your existing debt load might take up much of what you earn each month. Your lender may want to see a statement of liabilities to find out how much of your income is currently dedicated to paying your bills. 
  • Credit History. Your lender may pull your credit report to verify your creditworthiness. Generally, banks and credit unions may require good credit, while alternative lenders may not. 
  • An Active bank Account. Most lenders use direct debits for repayment. If you don’t have an active bank account, lenders will be less likely to approve you. 

Types Of Lenders That Offer $20,000 Loans

If you’re looking to take out a $20,000 loan, you have a few options in terms of lenders:

  • Banks  -Traditional lenders like banks typically deal with larger loans, like $20,000 loans. Banks are also known for offering the most competitive interest rates for loans of this size. However, these bank-issued loans are usually only offered to borrowers with good to excellent credit, especially for loans as high as $20,000. 
  • Credit Unions Credit unions also offer loans as high as $20,000, and may offer interest rates that are even more competitive than banks to their members. However, you must meet their membership criteria to apply for a loan. 
  • Online Lenders – Unlike traditional lenders, online alternative lenders don’t always require borrowers to have stellar credit to get approved for a $20,000 loan. That said, interest rates on $20,000 loans from online lenders tend to be higher. 
Types Of LendersDefinitionApproximate  Interest RatesLender Examples
BanksMajor financial institutions like Canada’s Big Five banks offer personal loans. They generally offer the best rates but have strict requirements. 0.5% - 15%- TD
- BMO
- RBC
- CIBC
- Scotiabank 
- Laurentian Bank of Canada
Credit UnionsCredit unions are non-profit organizations that are owned by their members. They offer smaller loans than banks but rates are still affordable. Requirements are also more flexible than banks, but you must be a member (of the credit union) to get a loan. 3% or more - Fusion Credit Union
- First West Credit Union
- PACE Credit Union
- DUCA Credit Union
- Meridian Credit Union
- Vancity Credit Union
- Ganaraska Financial Credit Union
Private LendersPrivate lenders are easier to qualify for than banks due to their flexible lending standards. Even those with poor credit may qualify, however, they often charge much higher rates than banks, making them a more expensive option. 8% - 46%- Loanz
- Spring Financial
- LendDirect
- LoanMeNow 
- Consumer Capital Canada
- Mogo

Can I Get A $20,000 Loan With Bad Credit? 

Your ability to secure a $20,000 loan with a bad score depends on the type of lender you apply with. Banks and credit unions typically work with borrowers with good to excellent credit scores (at least 660). If your score is under this threshold, you may not have much luck.

However, bad credit is often accepted with alternative online lenders. In fact, many lenders work specifically with different types of borrowers, including those with no credit history at all. But if you have bad credit, your most recent payment history may play a larger role in your ability to get approved. 

For example, if you have a recent history of timely payments, you’ll have a better chance of loan approval. Otherwise, you might want to consider applying for a smaller loan amount to increase your chances of getting approved. 

Can I Get A $20,000 Secured Loan? 

A secured loan means you’re backing it with a valuable asset. Most lenders consider valuable assets to be a car, furniture, or your home. If you’re applying for a $20,000 personal loan, ask the lender if you can collateralize the loan with an asset to reduce the risk for the lender and secure a lower interest rate. 

Both conventional and alternative lenders offer secured loans, especially for larger loan amounts. 

Can I Get A $20,000 Loan With A Co-Signer?

If you’re unable to get approved for a $20,000 loan on your own merit, you might be able to add a co-signer to the loan agreement. In the event that you default on the loan, your co-signer will be required to continue making payments. Having a co-signer with good credit can reduce the risk for the lender, in which case they may be more likely to approve your loan application.

How Much Will A $20,000 Loan Cost You? 

The exact cost of your $20,000 loan depends on several factors, including the loan type, interest rate, and loan term. To help you get a sense of what different variations of a $20,000 loan will cost, let’s take a look at a few examples:

Interest RateTerm LengthMonthly PaymentTotal Interest PaidTotal Amount Paid
5%24 months$877$1,058$21,058
10%36 months$645$3,232$23,232
25%48 months$663$11,830$31,830
46%60 months$856$31,377$51,377

How To Calculate The Cost Of A $20,000 Loan? 

In order to calculate exactly how much your $20,000 loan will cost you, there are a few key factors that you’ll need to consider. You can also use this personal loans calculator to help you calculate the cost of your loan. 

Personal Loan Calculator

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Interest Rates

The interest rate your lender charges you is the biggest cost associated with your loan. Interest rates on personal loans typically range between 2% to 49%, though they will vary based on your financial and credit profile, and the lender. Getting pre-approved for a loan will give you a more accurate idea of the type of rate you can secure.  

Loan Term

Loan terms range between 3 months to 10 years. Longer terms give you more time to repay the loan, which means each payment will be smaller compared to shorter terms. However, you’ll be paying more in interest over the life of the loan. 

Shorter terms give you a smaller window of time to repay the loans, which means each payment will be much bigger. However, the overall cost of the loan will be lower because you’ll pay less interest over the life of the loan. 

Loan Insurance

Loan insurance is optional and provides coverage in the event of death, illness, disability, or job loss. However, it’s not required. Be careful of lenders who push loan insurance as a mandatory cost. 

Miscellaneous Fees

Lenders can charge all sorts of additional fees, including the following:

  • Loan origination fees
  • Administrative fees
  • Late payment fees
  • Early prepayment penalty fees

Be wary of lenders who require upfront fees, as legitimate lenders shouldn’t require any.  

Lookout Watch Out For Hidden Fees In Personal Loan Contracts

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How To Improve Your Odds Of Approval For A $20,000 Loan 

If time permits, consider taking steps to make sure you’re setting yourself up for loan approval at an affordable rate. To do so, follow these tips:

Verify the loan eligibility criteria. Lenders have a list of must-haves that borrowers must check off before loan approval is given. Find out exactly what your lender requires in order to qualify for a $20,000 loan. 

Get a copy of your credit report. Get in the habit of pulling your credit report once a year to find out what your credit score is. This will give you an idea of your chances of getting approved for a $20,000 loan. If you see that your score is a little low, take some time to give it a boost, and apply only after your score is stronger. Otherwise, you may have to apply with an alternative lender as opposed to the bank. 

Fix your finances. In addition to improving your credit score (if required), strengthen your finances by paying down your debts as much as possible. Doing so will free up more of your income and improve your debt-to-income (DTI) ratio. 

Comparison shop. Compare loan terms, interest rates, and fees among different lenders and loan products. Doing some homework may help you secure the lowest rate and best terms for your loan and save you plenty of money over the long run.

Get a co-signer. As mentioned, adding a co-signer to your loan contract may help increase your chances of loan approval because it lowers the risk for the lender in case you fail to make payments. 

Apply for a secured loan. Secured loans generally come with lower interest rates compared to unsecured loans because there’s less risk for the lender.

$20,000 Loan FAQs

 How long does it take to repay a $20,000 loan?

That depends on the loan term you choose. For $20,000 loans, terms typically range between 3 months to 10 years. 

What kinds of fees can I expect on a $20,000 loan?

Aside from the interest charges, a $20,000 loan may also come with additional fees. Consider looking to see if there are any loan origination fees, administration fees, early prepayment penalty fees, and late payment fees. 

How long will it take to get the loan?

If you apply for a loan with a conventional lender, it could take at least a couple of weeks or possibly even longer to get your funds. But if you apply with an online alternative lender, you may be able to get access to your funds within a day or two. 

Final Thoughts

Many Canadians struggling during high-inflation don’t have $20,000 readily accessible. If you could use a few thousand dollars to cover a big expense, a $20,000 loan might be just what you need. Just be sure to work with the right type of lender based on your specific financial and credit profile.


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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