How To Get A Personal Loan From A Bank

Lisa
Author:
Lisa
Lisa Rennie
Senior Contributor at Loans Canada
Lisa has worked as a personal finance writer for over a decade, creating unique content to help educate Canadian consumers. Expertise:
  • Personal finance
  • Real estate
  • Mortgage financing
  • Investing
Barry
Reviewed By:
Barry
Barry Choi
Expert Contributor at Loans Canada
📅
Updated On: October 7, 2025
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British Columbia Residents: iCash offers payday loans in British Columbia (license number: 67639)

Ontario Residents: Loan amounts and repayment terms are subject to qualification requirements. The maximum allowable cost of borrowing under the payday loan agreement is $14 for every $100 advanced. On a $500 loan of 14 days, the total cost of borrowing is $70, with a total payback amount of $570 and an APR of 365%. On a loan of 62 days, the APR is 82.42%.

Manitoba Residents: To learn more about your rights as a payday loan borrower, contact the Consumer Protection Office at 1-204-945-3800 or 1-800-782-0067 or at www.manitoba.ca/cca/cpo

Nova Scotia Residents: Payday loans are High Cost Loans. The maximum allowable cost of borrowing under the payday loan agreement is 14$ per every 100$ received, which means on a 100$ loan for 14 days, the total cost of borrowing is 14$, with total payback amount of 114$ and an APR of 365.00%.

PEI Residents: Loan amounts and repayment terms are subject to qualification requirements. The maximum allowable cost of borrowing under the payday loan agreement is $14 for every $100 advanced. On a $300 loan of 14 days, the total cost of borrowing is $42, with a total payback amount of $342 and an APR of 365.00%. On a loan of 62 days, the APR is 82.42%.

The Cashback Program and Refer a Friend Program are not available in Manitoba, British Columbia and New Brunswick.

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Are you coming up short in cash to cover a large expense? If so, a personal loan from a bank can help.

Consumers typically turn to their bank when it comes time to apply for a loan. Banks often offer lower rates and better terms, but their loan requirements are stringent. That’s why it’s essential to understand what the loan application process involves and what you can do to strengthen your application.


Key Points:

  • A personal loan provides a lump sum of money that you repay in installments over a set term, along with interest.
  • Personal loans from banks typically require strong credit and finances.
  • Funds can be used to cover a variety of expenses, including home improvements, car repairs, and debt consolidation.
  • If you can’t qualify for a personal loan from a bank, alternative lenders may be willing to extend a loan.

What Is A Personal Loan?

A personal loan is a type of installment loan that allows you to borrow a fixed amount of money and repay it over time, with interest. These loans are typically unsecured, which means they don’t require collateral. 

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

TD BankLoan amounts: Up to $50,000
Loan terms: 1 – 7 years
Interest rates: Fixed or variable
ScotiabankLoan amounts: N/A
Loan terms: Up to 5 years
Interest rates: Fixed or variable
CIBCLoan amounts: $3,000 – $200,000
Loan terms: 1 – 5 years
Interest rates: Fixed or variable
RBCLoan amounts: Starting at $5,000
Loan terms: 1 – 5 years
Interest rates: Fixed or variable
BMOLoan amounts: N/A
Loan terms: 1 – 5 years
Interest rates: Fixed or variable

How To Get A Personal Loan From The Bank

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: Most banks require good credit, as such, if your score is a little on the low end, take some steps to boost it before applying for a personal loan from a bank. Making all bill payments on time, and spending less than 30% of your credit card limit can help you build credit. 

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

Learn more: Personal Loan Requirements: How To Qualify For A Personal Loan

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.

Borrow Up To $50,000

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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 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 cosigner to the loan can help strengthen your loan application. A cosigner is someone with a strong financial profile and good credit score, and is willing to take over the loan payments if you default. 

With a cosigner, 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.

Learn more: Types Of Loans You Can Get With A Cosigner

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’re unable to get approved with a conventional lender, consider applying with an alternative online lender. Just keep in mind that although it may be easier 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 types of loans 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 the borrower to repay the lender in regular installment payments until the loan amount is fully repaid. Borrowers 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 applying for a loan, take some time to make sure your profile is strong, including your finances and credit score. Further, ensure you understand exactly what is needed to apply for a loan and get all your documents in order so you’re fully prepared to apply for a loan. And if the bank turns you down, alternative lenders may be willing to help you out. 


Bank Loan FAQs

Do banks require a credit check? 

Yes, banks typically conduct a credit check on applicants before deciding whether to approve a loan application. This gives lenders the opportunity to verify that you’re financially capable of making your loan payments on time.

Will a bank loan affect my credit?

Applying for a bank loan may affect your credit temporarily. That’s because banks typically conduct a credit check, otherwise known as a “hard pull” or “hard inquiry.” This may pull down your score for a short time, but it should bounce back up, especially if you’re diligent with your loan payments.  

How long does it take to get a bank loan?

The time it takes to get approved for a loan and receive the funds depends on a few factors, such as the loan type, the amount requested, your financial situation, and the lender. For instance, it might take a couple of days to get a car loan or personal loan, but it may take a few weeks for a mortgage.

How much can I qualify for with a bank?

The loan amount you may be able to apply for depends on the loan type, your credit score, your debt load, and any collateral that you put forth. The stronger your financial and credit, and the more valuable the collateral is, the more you may be able to qualify for. 
Lisa Rennie avatar on Loans Canada
Lisa Rennie

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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