Do You Need A Personal Reference For A Loan?

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
Priyanka
Reviewed By:
Priyanka
Priyanka Correia, BComm
Senior Editor at Loans Canada
As a senior member of the Loans Canada team, Priyanka Correia is committed to empowering Canadians with the knowledge they need to make smart financial choices.
Expertise:
  • Personal finance
  • Consumer borrowing
  • Consumer banking
  • Debt management
📅
Updated On: September 11, 2025
iCash

Ad Disclosure

Approval is not guaranteed and conditions apply.

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.

Get a free, no obligation personal loan quote with rates as low as 9.99%
Free quote with no impact to your credit

Wondering why your lender wants a personal reference as part of your loan application? It’s not just about your credit score; it’s about giving lenders extra assurance and helping confirm your reliability and stability as a borrower. This extra step can be just what’s needed for you to get your loan application approved.


Key Points

  • A personal reference is someone who can vouch for your character, reliability, and identity to help lenders assess your trustworthiness.
  • Personal references may include employers, work colleagues, mentors, coaches, and teachers.
  • When using a personal reference, be sure to include their full name and contact information, and confirm with them that they’re comfortable being named as a reference.

Do You Need A Personal Reference When Applying For A Loan?

Although banks don’t always ask for a personal reference, private lenders sometimes may ask for one to support your application for a loan. Typically, personal references are requested by banks or other financial institutions during the mortgage application process.

Private lenders may also request a personal reference, especially if you’re applying with bad credit. These lenders may use a personal reference to help verify your character and reliability to ensure you pay back the loan. 

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


What Is A Personal Reference?

A personal reference offers insight into your character. Also known as a character reference, a personal reference is requested to verify that the information you have presented is correct. 

While you may appear to be a responsible person who would pay back a loan as per your loan contract, surface-level assumptions aren’t always enough to build trust. This is why personal references are often so important for certain financial transactions. 

What’s The Difference Between A Personal Reference And A Credit Reference?
A credit reference provides information about your financial history. It usually comes in the form of a credit report, credit score, or a letter from a previous lender that details your past borrowing and repayment behaviour. 
A personal reference, on the other hand, is someone who can vouch for your character, reliability, and trustworthiness. This type of reference helps lenders assess your personal qualities and overall dependability.
Essentially, while a personal reference speaks to your character, a credit reference focuses on your financial responsibility.

Who Can Be A Personal Reference? 

There’s usually a wide array of options you can choose from when deciding who to use as your personal reference. Here are a few suggestions:

  • Co-workers or employers: Workplace references are great choices because they can verify your career, income, and dependability as an employee.
  • Professors or academic advisors: These individuals are ideal for students or recent grads, as they can highlight your dedication and ability to meet commitments.
  • Community leaders: Religious leaders, volunteer coordinators, or coaches can provide insight into your character, values, and consistency.
  • Former landlords: If you’ve rented in the past, your previous landlords can describe your rent payment history.

What Information Do You Need To Provide For A Personal Reference?

When providing a personal reference, it’s important for you to provide accurate, up-to-date, and detailed information. Remember to include the following:

  • Full names
  • Contact Information
  • Relationship (who is this person to you? Ex. teacher, employer, friend, etc)
Tip: It’s a good idea to ask your references if they’re comfortable being a personal reference for you before providing their information to a lender. This way, they are prepared for the phone call and can confidently verify the information you’ve provided the lender with.

Why Do Lenders Ask For A Personal Reference? 

Lenders need to verify that the information and image you are presenting to them is accurate. Here are a few reasons why lenders ask for personal references: 

  • Prove Identity/Security: An identification card is often sufficient to prove one’s identity. But, personal references can assure a lender that you are who you say you are, and that they won’t be chasing a ghost if you don’t pay back a loan.
  • Information Verification: Lenders will use personal references to verify the information you’ve provided in your loan application. For example, the reference can assure a lender that you are working and living where you indicated on your application.
  • Contact Details: Finally, personal references can assure a lender that the contact details you provided are accurate. If they’re not, lenders may use your personal reference to get in touch with you if need be.

Other Times, A Personal Reference May Be Required

Personal references are required in many scenarios, including the following:

When Applying For A Job 

Employers often request professional references to verify your work experience. However, sometimes they look for character references, either from your previous employer or from a past colleague or mentor. 

When Securing A Rental Agreement

Landlords often request references from your previous landlord to ensure you have a good history of paying rent. They may also ask for personal references from others to learn more about your trustworthiness. 

First-Time Borrowers Or Newcomers With No Credit History

Whether you’re a newcomer with no credit history or someone with a thin credit file, lenders may ask for a personal reference to assess your reliability and sense of responsibility. Without any credit history, lenders have to rely on these other factors to help assess your creditworthiness.

Borrowers With Bad Credit 

Similarly, if you have bad credit, lenders may request personal or credit references to gain extra insight into your current situation, work ethic, or recent improvements in your financial habits before making a decision.

Learn more: Personal Loan Eligibility Requirements For Bad Credit Lenders


Do This When Listing Personal References

When using a personal reference as part of your loan application, be sure to do the following:

  • Provide Accurate And Up-To-Date Contact Information: If you list a reference with an old phone number or email address, the lender may not be able to reach them when needed. This can slow down your application or even cause it to be rejected. Make sure to double-check your references’ contact details before submitting your application.
  • Ask Permission First: Listing someone as a reference without letting them know can catch them off guard if they’re contacted by a lender. They may not answer the call or provide a good recommendation if they’re not prepared. Always ask for permission first before listing someone, so they know to expect a call.
  • Choose Someone Who Knows You Well: Selecting a reference who doesn’t know you well can weaken your application. Lenders want to hear from people who can provide details about your trustworthiness and responsibility. Be sure to choose references who know you well and can provide accurate and positive information about you.

Final Thoughts

References provide lenders with an additional layer of security before extending a loan. It’s a relatively easy way for you to strengthen your loan application and improve your odds of approval. When providing personal references, make sure you choose individuals who know you well and can vouch for your trustworthiness.


FAQs

Can a reference be held financially responsible for my loan?

No, a personal reference is not a guarantor or co-signer on a loan and has no financial obligation to take over loan payments if you fail to do so. References simply provide character verification.

Will lenders contact my references directly?

Yes, lenders may call or email your references to confirm your identity, employment status, or overall reliability.

Can I be denied a loan based on a reference’s feedback?

Potentially. If a reference brings up concerns about you or can’t confirm certain details, it could affect the lender’s decision.

What happens if I don’t provide a personal reference?

If a lender specifically requests a personal reference and you don’t provide one, they could reject your application or request additional documentation. Other lenders may still proceed without one, depending on your credit profile.

Can I use the same reference for multiple loan applications?

Yes, as long as the reference is willing to be contacted. Make sure to inform them each time you use their name as a reference.
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.

More From This Author

Special Offers

More From Our Experts

https://loanscanada.ca/wp-content/uploads/2017/06/bc-disability-loan.png
Can You Get A Loan With BC Disability Assistance?

By Lisa Rennie
Updated on October 23, 2025

Are you receiving BC Disability and are looking to apply for a loan? Here's how you can get approved while on disability assistance in BC.

https://loanscanada.ca/wp-content/uploads/2020/01/Credit-Union-Loan.png
How To Get A Loan From A Credit Union

By Lisa Rennie
Updated on October 22, 2025

Do you need to borrow extra cash? If so, read on to find out what you need to know about how to get a loan from a credit union.

https://loanscanada.ca/wp-content/uploads/2016/04/how-to-get-approved-for-a-personal-loan.png
How To Get Approved For A Personal Loan: Personal Loan Requirements

By Lisa Rennie
Updated on October 21, 2025

Are you in need of cash and wondering how to get approved for a personal loan? Read on to discover tips to boost your odds of approval.

https://loanscanada.ca/wp-content/uploads/2014/08/co-sign-a-loan-.png
Should You Cosign A Loan? What You Should Know Before Signing That Loan Contract

By Lisa Rennie
Updated on October 16, 2025

Should you cosign a loan? If so, remember that you're not only helping someone get approved, but you're taking responsibility for the loan.

https://loanscanada.ca/wp-content/uploads/2023/04/Criminal-Interest-rate.png
A Guide To Canada’s Criminal Interest Rate

By Priyanka Correia, BComm
Updated on October 15, 2025

Canada's criminal interest rate is meant to protect consumers from sky-high interest on loans. But it can also affect access to loans.

https://loanscanada.ca/wp-content/uploads/2020/06/Loan-Payment-Deferral-1.png
What Is A Personal Loan Payment Deferral?

By Priyanka Correia, BComm
Updated on October 14, 2025

What is a personal loan payment deferral? Depending on your financial circumstance, some lenders may allow a loan payment deferral.

https://loanscanada.ca/wp-content/uploads/2025/10/BNPL-Vs.-Personal-Loan.png
BNPL Vs. Personal Loan? Here’s Why Personal Loans Win

By Lisa Rennie
Updated on October 8, 2025

BNPL services and personal loans can both be used to fund a purchase. But which option is best? Read on to find out more.

https://loanscanada.ca/wp-content/uploads/2022/02/How-To-Get-A-Loan-From-The-Bank.png
How To Get A Personal Loan From A Bank

By Lisa Rennie
Updated on October 7, 2025

Are you in need of extra cash to cover a pressing expense? Read on to find out how to get a personal loan from a bank in Canada.

Recognized As One Of Canada's Top Growing Companies

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Free
Service
Expert Tips
And Advice
Exclusive
Offers