Borrowing from a Canadian bank can give you access to competitive rates, larger loan amounts, and the security of a long-established lender — but only if you can meet the bank’s qualification rules. This guide walks you through how to get a loan from a bank in Canada, including what the Big 5 offer, the credit score you’ll likely need, how to compare your options, and what to do if your bank turns you down. If you’re shopping around for the best personal loans available in Canada, a bank is one of several places to look — alongside private lenders, credit unions, and online brokers covered in our best personal loans guide.
Key Points
1. A personal loan from a bank gives you a lump sum of money you repay in fixed installments — with interest — over a set term, usually 1 to 7 years.
2. Banks set strict qualification rules. You typically need good credit (660+), steady income, and a manageable debt-to-income ratio to get approved.
3. If a bank turns you down, alternative lenders — including credit unions, online lenders, and brokers — may still approve you, though usually at a higher rate.
What Is A Personal Loan?
A personal loan from a bank is an unsecured installment loan that gives you a lump sum of money upfront, which you repay in fixed monthly payments over a set term — typically one to seven years, depending on the bank. Because the loan is unsecured, you don’t need to put up collateral, but the bank will rely heavily on your credit score, income, and existing debt load to decide whether to approve you.
Personal loans are flexible, as the funds can be used for a wide range of expenses, like debt consolidation, home renovations, or emergency costs. Loan approval depends on factors like your credit score, income, and debt-to-income ratio.
Personal Loan Options From The Big Five Banks
Each of Canada’s Big Five banks offers personal loans, but their terms, amounts, and application processes differ. Here’s how they compare as of May 2026:
| Bank | Loan Amount | Term | Rate Type | Application | Notable |
|---|---|---|---|---|---|
| TD | From $2,000 | 1–7 years | Fixed or variable | Online or in-branch | Widest term range of the Big 5 |
| Scotiabank | Not publicly disclosed | Up to 5 years | Fixed or variable | Branch or phone only | No prepayment penalties; one payment deferral per year |
| CIBC | $3,000–$200,000 | 1–5 years | Fixed or variable | Fully online, phone, or branch | Highest publicly stated max amount |
| RBC | From $5,000 | 1–5 years | Fixed or variable | Branch or phone | No early payment penalties; flexible payment frequency |
| BMO | From $5,000 | 1–5 years | Fixed or variable | Phone or branch (existing customers can start online) | Lump-sum prepayments allowed without penalty |
None of the Big Five publicly post their personal loan interest rates — you’ll need to apply or speak with a lending advisor to get a quote tailored to your profile2. If you want a faster way to compare offers without applying at each bank individually, personal loan brokers can shop your application across multiple lenders with one credit check.
Which Big 5 Bank Should You Choose?
No bank is universally “best” — it depends on what you value most:
- Choose CIBC if you need the highest loan amount (up to $200,000) or want to apply fully online.
- Choose TD if you want the lowest minimum ($2,000) or a longer term (up to 7 years).
- Choose RBC, BMO, or Scotiabank if you’re already a customer in good standing — your existing relationship typically improves your approval odds and may earn you a small rate discount.
How To Get A Loan From A Bank In Canada
To apply for a personal loan from a bank, follow these steps:
Step 1: Check Your Credit
Banks typically check your credit score to assess your risk level before they extend a loan. A higher score indicates that you’re more likely to make your payments on time, while a lower score presents a higher risk to the lender.
Consider Checking Your Own Credit
Before you apply for a personal loan from a bank, consider pulling your own credit report to see what your score is and to make sure there are no mistakes on your report. If you find any errors, have them investigated and fixed right away.
Keep in mind that the credit score you see when you check your own credit will likely be different than the score the lender sees. Since checking your credit score doesn’t harm it, there’s no reason not to check your score regularly.
Note: Boost Your Score Before You Apply
Most banks require good credit. If your score is on the low end, take some time to build it up before you apply. Pay every bill on time, and keep your credit card balances under 30% of your limit — both moves can help lift your score.
Step 2: Organize Your Paperwork
Most banks will require specific documents when assessing your loan application. Be sure to have:
Identification:
- Government-issued photo ID (i.e., driver’s license, passport, health card)
- Social Insurance Number (SIN)
Income Verification:
- Pay stubs
- Bank statements
- Tax returns (especially if self-employed)
Financial Information:
- Current loan statements
- Mortgage or rent statements
- Statement of assets and liabilities
Employment Information:
- Employer’s name and contact info
- Letter of employment
Step 3: Apply
Once you’ve taken the above steps, you can officially apply for a loan online or in-person. If approved, you’ll need to review and sign the loan agreement. Once the application process is finalized and approved, you’ll receive the specified funds shortly afterward, and your installment payment plan will start.
What Credit Score Do You Need For A Bank Loan?
Most Canadian banks require a credit score of 660 or higher to approve an unsecured personal loan from a bank, with the best rates reserved for borrowers in the 740+ range. Below 660, you may still qualify, but you’ll likely be offered a higher rate, a smaller amount, or asked to provide a co-signer or collateral.
Here’s a rough guide to how your credit score affects your odds:
| Credit Score | Your Odds At A Major Bank | What To Expect |
|---|---|---|
| 740+ (Very Good–Excellent) | Strong | Best published rates, larger amounts, flexible terms |
| 660–739 (Good) | Reasonable | Standard rates and amounts; minor income/debt checks |
| 580–659 (Fair) | Weak | Often declined; may need a co-signer or collateral |
| Below 580 (Poor) | Very weak | Banks usually decline; alternative lenders are a better starting point |
If your score isn’t where you want it, work on it before applying. Knowing the exact credit score needed for a personal loan at your target lender can save you a hard inquiry on a loan you weren’t going to qualify for anyway.
Bank Vs. Alternative Lender: Which One Is Right For You?
The short answer: choose a bank if you have good credit (660+) and want the lowest rate; choose an online or alternative lender if you have weaker credit or need funds within 1–2 business days.
Banks aren’t the only place to get a personal loan in Canada — when you’re comparing a bank loan vs an online lender or other alternative, credit unions, online lenders, and brokers all compete in the same space. Depending on your credit and how fast you need the money, an alternative lender may be a better fit than a major bank.
| Lender Type | Best For | Credit Required | Speed | Trade-Off |
|---|---|---|---|---|
| Big 5 Bank | Borrowers with good credit looking for the lowest rates and largest amounts | 660+ | 2–5 business days | Strict approval; some banks require an in-branch application |
| Credit Union | Members who want competitive rates and a community-based lender | 620+ | 2–5 business days | Membership usually required; smaller branch networks |
| Online Lender | Borrowers who want a fast, fully online application | 550+ | 1–2 business days | Higher rates than banks, especially for weaker credit |
| Private Lender | Borrowers with bad credit or unique situations | No strict minimum | 1–3 business days | Highest rates; smaller loan amounts |
Borrow Up To $50,000
How To Compare Your Personal Loan Options With Banks
When comparing personal loan offers and lenders, consider the following key factors:
- Interest Rates: The interest rate represents the cost of borrowing and significantly affects the total cost of your loan. Look at the annual percentage rate (APR), which includes both the interest rate and any additional fees.
- Loan Amounts: Banks vary in how much they’re willing to lend. Make sure the bank you work with will offer the amount you need. Also, make sure not to borrow more than necessary to avoid unnecessary costs.
- Repayment Terms: Longer loan terms mean smaller monthly payments but higher total interest. Shorter terms come with higher monthly payments, but can save you money in interest.
- Additional Fees: Watch out for additional costs, like origination fees, early repayment penalties, and late payment charges.
- Payment Deferral Options: Many banks offer payment deferral options that allow you to skip or push loan payments out when you’re experiencing financial difficulties.
- Online Application: Most banks offer the option to apply for a loan online, making it more convenient for you to access financing programs from the comfort of home.
- Current Bank Clients: Having an existing relationship with a bank can help if you’ve been a long-term client in good standing.
- Location: If you need to visit a bank in person, finding a physical bank branch near you would make things more convenient and easier to access.
How To Improve Your Chances Of Approval From The Bank
To boost your odds of loan approval, consider the following options:
Get A Co-Signer
Adding a co-signer to the loan can help strengthen your loan application. A co-signer is someone with a strong financial profile and good credit score who is willing to take over the loan payments if you default.
With a co-signer, the lender’s risk is reduced, which can improve your chances of approval. However, if you default, the co-signer is responsible for the remainder of the loan, which may negatively impact your relationship.
Offer An Asset
Collateralizing the loan with an asset of value may reduce the lender’s risk, which can help improve your odds of loan approval.
Request A Lower Loan Amount
As mentioned above, a high loan-to-value ratio can weaken your loan application. However, if you request a lower loan amount, your lender may be more willing to extend the funds.
Why Did My Bank Loan Application Get Rejected?
If you get turned down for a loan, find out why. There could be a number of reasons why the lender rejected your loan application, including the following:
Low Credit Score
If you don’t meet the minimum requirements when it comes to your credit score, your lender may view you as a risky borrower and may turn you down for a loan as a result.
High Debt-To-Income Ratio
Perhaps your current debt load is too high compared to your income. In this case, your lender may worry that you won’t have enough left over after paying all your existing bills to contribute to a new loan payment.
Unstable Employment / Insufficient Income
Whether your job is unstable or your income is inadequate, your employment situation may not be strong enough to get you approved for a loan.
Pro Tip: Apply With An Alternative Lender
Traditional lenders such as banks and credit unions typically have strict lending criteria. If you can’t get approved with a conventional lender, consider applying with an alternative online lender. Just keep in mind that although it may be easier for you to get approved with these types of lenders, you may be stuck with a higher interest rate.
Other Types Of Loans You Can Get From The Bank
Banks offer a variety of loan types to suit different needs, including the following:
Car & Vehicle Loans
A car loan uses the vehicle itself as collateral. The lender offers enough funds to cover the cost of the vehicle. In turn, you’ll pay back the loan plus interest over a set period of time through regular installments.
Since the vehicle collateralizes the loan, the lender may repossess the vehicle to recoup any losses if you default.
Mortgages
A mortgage is another type of loan that requires you to repay the lender in regular installment payments until the loan amount is fully repaid. You take out a mortgage to help finance a home purchase, and the home serves as collateral for the loan.
Mortgages typically involve an extensive application process in which the lender will verify your ability to keep up with mortgage payments throughout the entire amortization period, which can range from 10 to 25 years or longer.
Business Loans
A business loan is designed to provide entrepreneurs with the necessary funding to start or expand their businesses. Like other installment loans, it requires that you make regular payments toward paying off the full loan amount over a specific term, plus interest.
For this type of loan, your personal and business finances will likely be considered during the application process.
Line Of Credit
A line of credit differs from installment loans and works more like a credit card. With this option, you’re provided with a credit limit within which you can borrow against. You’re then free to borrow as much or as little against the credit limit as you want, as long as you don’t go over the limit.
Like a credit card, you’re only charged interest on the withdrawn amount, with no deadline to repay the funds. Once the funds are repaid, you can borrow again as needed.
Final Thoughts
Before you apply for a loan from a bank, take some time to make sure your profile is strong — both your finances and your credit score. Get all your documents in order so you’re fully prepared to apply, and compare offers from at least two or three lenders before signing anything. And if the bank turns you down, alternative lenders may still be willing to help you out.
How To Get A Loan From The Bank — FAQs
References
- Bank of Canada. (2026). Chartered bank loans to households — Monthly data release. Bank of Canada. https://www.bankofcanada.ca/rates/banking-and-financial-statistics/
- TD Bank, Scotiabank, CIBC, RBC, BMO. (2026). Personal loan product pages. Retrieved May 2026 from each bank’s official Canadian website.
