Last updated: March 2025 — Personal loan rates in Canada range from 6.99% to 46.96% APR depending on your credit score, lender type, and loan amount. This guide compares every lender category so you can find the best deal.
What Is a Personal Loan?
A personal loan is an unsecured or secured lump-sum loan repaid in fixed monthly installments over a set term — typically 1 to 7 years. Unlike a credit card, the interest rate is fixed (usually) and the end date is clear. Canadians use personal loans to consolidate debt, fund home renovations, cover medical expenses, or bridge financial gaps.
In 2025, Canadians collectively hold over $200 billion in consumer credit excluding mortgages. Personal loans are one of the fastest-growing product categories as borrowers seek lower rates than credit cards.
Personal Loan Rates in Canada 2025
| Lender Type | Rate Range (APR) | Loan Amount | Term | Best For |
|---|---|---|---|---|
| Big 5 Banks | 6.99% – 19.99% | $1,000 – $50,000 | 1–5 yrs | Existing customers, good credit |
| Credit Unions | 6.50% – 18.00% | $500 – $35,000 | 1–7 yrs | Members, flexible criteria |
| Mogo / Neo | 9.90% – 29.99% | $1,000 – $35,000 | 2–5 yrs | Fast approval, digital-first |
| Fairstone | 19.99% – 39.99% | $500 – $50,000 | 6–120 mo | Fair credit, secured options |
| Spring Financial | 14.99% – 46.96% | $500 – $35,000 | 9–60 mo | Credit building, bad credit |
| easyfinancial | 9.99% – 46.96% | $500 – $100,000 | 9–120 mo | Poor credit, secured loans |
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Banks vs Credit Unions vs Online Lenders
Big 5 Banks (TD, RBC, BMO, Scotiabank, CIBC)
Canada's major banks offer some of the lowest personal loan rates — but only for borrowers with strong credit scores (700+) and existing account relationships. TD Bank currently offers personal loans from 6.99% APR for qualified borrowers. The approval process can take 1–3 business days, and branch visits are sometimes required for larger amounts.
- Pros: Lowest rates for good credit, relationship discounts, trusted institutions
- Cons: Strict approval criteria, slower process, limited flexibility for credit blemishes
Credit Unions (Desjardins, Meridian, Vancity, etc.)
Credit unions are member-owned cooperatives that often offer rates competitive with or better than banks. Desjardins, Canada's largest credit union, offers personal loans starting at 6.50%. Unlike banks, credit unions consider the whole picture — employment history, community ties, and savings patterns — making them excellent for self-employed Canadians or those with minor credit issues.
- Pros: Competitive rates, flexible criteria, profit returned to members
- Cons: Must become a member, limited to service area, may lack digital tools
Online Lenders (Mogo, Neo Financial, Loans Canada)
Online lenders have transformed personal lending in Canada. Platforms like Mogo and Neo Financial offer fully digital applications with decisions in minutes. Loans Canada and LoanConnect act as marketplaces connecting borrowers to dozens of lenders simultaneously — a great way to shop rates without multiple hard credit inquiries.
- Pros: Fast decisions (minutes to hours), soft credit check pre-qualification, convenient
- Cons: Higher rates than banks for average-credit borrowers, variable fee structures
Alternative Lenders (Fairstone, easyfinancial, Spring Financial)
Alternative lenders serve Canadians who don't qualify at banks — those with fair or poor credit (below 650), short employment history, or past collections. Rates are higher (19.99%–46.96%) but these lenders can be a stepping stone to rebuilding credit.
How to Qualify for a Personal Loan in Canada
Credit Score Requirements
- 750+: Best rates at any bank or credit union
- 680–749: Good rates at banks, excellent rates at credit unions
- 620–679: Fair — consider credit unions or Mogo/Neo
- 580–619: Harder to qualify at banks; Fairstone and similar lenders work with this range
- Below 580: Alternative lenders only; expect 29.99%–46.96% APR
Income and Employment
Most lenders require proof of stable income. Banks typically want 2+ years of employment history. Self-employed applicants need 2 years of Notice of Assessments (tax returns). Lenders generally prefer your total debt payments (including the new loan) to be under 40% of your gross monthly income (the TDS ratio).
Documents Required
- Government-issued photo ID (passport or driver's license)
- Proof of income (recent pay stubs, T4, or NOA)
- Bank account information (void cheque or pre-authorized debit form)
- Proof of address (utility bill or bank statement)
- SIN for credit check authorization
Fixed vs Variable Rate Personal Loans
Most personal loans in Canada use fixed interest rates, meaning your monthly payment never changes throughout the term. Variable rate personal loans (pegged to prime rate) are less common but can save money when rates fall. In the current environment, fixed rates provide predictability — important for budgeting.
Secured vs Unsecured Personal Loans
An unsecured personal loan requires no collateral. Your creditworthiness alone determines approval and rate. An secured personal loan uses an asset (savings account, vehicle, or investments) as collateral. Secured loans carry lower rates because the lender has recourse if you default. Fairstone and easyfinancial both offer secured personal loans for borrowers who own vehicles or property.
Prepayment and Fees
Always ask about prepayment penalties before signing. Some lenders charge 1–3 months' interest if you pay off early. Others allow unlimited prepayments. Also watch for origination fees (0%–5% of loan amount), NSF fees ($25–$45), and payment change fees. The total cost of a loan is best compared using the APR, which includes all fees.
Best Alternatives to Personal Loans
Before taking a personal loan, consider these options:
- Balance transfer credit card: 0% promo rate for 6–12 months on transferred debt
- HELOC: If you own a home, home equity line of credit rates start around 6–7%
- RRSP loan: Low-rate loan specifically to contribute to RRSP (tax refund offsets interest)
- Employer payroll advance: Many employers offer 0% short-term advances
- KOHO: Build savings and avoid debt altogether with high-interest savings accounts
Personal Loan Application Tips
- Check your credit score for free via Borrowell or Credit Karma Canada before applying
- Get pre-qualified (soft pull) from multiple lenders before committing
- Compare APR (not just interest rate) to include all fees
- Choose the shortest term you can comfortably afford to minimize interest paid
- Set up automatic payments to avoid late fees and protect your credit score
- Never borrow more than you need — the temptation to spend the excess is real
Stop Borrowing — Start Saving with KOHO
KOHO's high-interest savings account earns up to 5% interest while you build an emergency fund. A $1,000 emergency fund eliminates the need for most personal loans. Get $20 free when you sign up.
Get KOHO Free — Use Code 45ET55JSYAFrequently Asked Questions
What credit score do I need for a personal loan in Canada?
Most major banks require a 660+ credit score for approval. Credit unions may approve at 620+. Alternative lenders like Fairstone and easyfinancial work with scores as low as 550, though rates will be much higher. The best rates (under 10% APR) generally require a score of 720+.
How fast can I get a personal loan in Canada?
Online lenders can fund in 24–48 hours. Banks typically take 2–5 business days. Credit unions may take 3–7 business days. For urgent needs, Mogo, Fairstone, and easyfinancial all offer same-day or next-day funding for approved applicants.
Can I get a personal loan with no credit check?
Technically no — legitimate lenders must verify identity and creditworthiness. However, some lenders use alternative data (bank statements, employment verification) and only do a soft credit pull for pre-approval. Be very wary of any lender claiming to offer guaranteed approval with no credit check — these are typically predatory.
Is personal loan interest tax deductible in Canada?
Generally no — personal loan interest used for personal expenses is not tax deductible. However, if you use loan proceeds to earn business or investment income, the interest may be deductible. Consult a tax professional for your specific situation.
For more information, see our guides on debt consolidation loans, personal loans for bad credit, lines of credit in Canada, and current loan interest rates.