Private loans are types of loans available through private lenders like Loans Canada, Loanz, and LoanConnect.
Also called personal loans, they are ideal for Canadians seeking loans for bad credit in Canada or those who do not qualify for traditional bank loans.
In this article, learn more about the 11 best private loans for bad credit, emergencies, home renovations, debt consolidation, etc.
Key Takeaways
- Private loans (or personal loans) are available through private lenders outside the traditional banking system, such as Loans Canada, Loanz, and LoanConnect.
- With a personal loan, you borrow a fixed amount of money and repay it via installments over a set period.
- Private loans include mortgages, auto loans, private student loans, and personal installment loans offered by non-traditional or alternative lenders.
What is a Private Loan?
A private loan, or personal loan, is a type of loan or financing option offered outside the traditional banking system, particularly by private or alternative lenders.
With a personal loan, you borrow a fixed amount of money and repay the total loan amount, interest and any applicable fees (also called installments) over a set period.
Borrowers often use these loans for home repairs or renovations, car purchases, or debt consolidation. These include private mortgages and auto loans, private student loans, and personal installment loans.
Private Lenders vs Public Lenders
The term “private lender” refers to any lender not affiliated with traditional financial institutions such as banks or credit unions.
Private lenders can be individuals, small companies or groups that pool capital from individuals or investors lending their own money.
They offer loans to people unable to seek funding from traditional lenders. They use different criteria to qualify borrowers, which include those with bad or no credit.
While they have flexible lending standards, they often have rates higher than what traditional lenders use.
The high rates are a form of protection from the added risk they take when lending to borrowers with less-than-stellar credit scores.
In contrast, public lenders like banks have stringent requirements since they are more regulated than private lenders.
It is typical of them to require borrowers to have good credit, documented income history, employment income, and minimal risk of default.
Additionally, they offer more competitive rates than private lenders due to economies of scale and access to large amounts of money.
Related: Peer-to-Peer Lenders.
Best Private Loans in Canada
Listed below are the top 10 best private loans offered by direct private lenders for personal loans in Canada:
Loans Canada
Loans Canada
Loans Canada is a loan comparison platform for all kinds of personal loans, car loans, debt consolidation loans, and bad credit loans. This company holds an A+ accreditation with the Better Business Bureau and features multiple lenders on its website.
Interest rate: 2.99% to 46.96%
Loan term: 3-60 months.
Maximum loan amount: Up to $50,000.
Eligibility: Resident of Canada and employed for at least 3 months with proof of income.
On Loans Canada’s website
Loans Canada is a loan search platform and comparison website that works with financial services providers to provide borrowers with a range of loan options for various purposes.
Applying for a personal loan at Loans Canada is as simple as going to the website, filling out an online form, submitting the application, and getting personalized offers.
Loans Canada offers loans from $500 to $35,000 and payment terms from 4 to 60 months or longer. APRs are from 2.99% to 46.96%.
Here’s an informative review of Loans Canada.
AimFinance
AimFinance
AimFinance offers personal and installment loans in Ontario and British Columbia. If eligible, you can borrow up to $5,000 and have it deposited in your account within 48 hours. You will need to show proof of income of at least $1,200 monthly and have a fair credit score.
Interest rate: 46.96%.
Loan term: 9-24 months.
Maximum loan amount: Up to $5,000.
AimFinance is an online lender that provides private loans to Ontario and BC residents who need an easy way to borrow funds quickly.
Loan requirements include proof of being a Canadian resident, a minimum monthly income of $1,200, proof of steady income such as a pay stub or direct deposit, and a credit score of fair to good.
Borrowers can choose from loan amounts ranging from $1,000 to $5,000. Terms of payment are from 9-24 months. The APR/Annual Interest Rate is 46.00%.
The digital lender may require you to undergo a credit check and ask you to provide additional supporting documents for verification.
AimFinance will review your application, evaluate your creditworthiness and look at your steady income as a basis for loan approval instead of a credit score.
When the lender approves your application, you will receive the funds within 24-48 hours through direct deposit via electronic funds transfer (EFT).
LoanConnect
LoanConnect
LoanConnect is a search engine for finding personal loans online from various lenders. You can use it to find a loan that works for your situation regardless of your credit score.
Interest rate: 6.99% to 46.9%.
Loan term: 3-120 months.
Maximum loan amount: Up to $50,000.
Eligibility: Resident of Canada and the age of the majority in your province or territory.
On LoanConnect’s website
LoanConnect is a Canadian-based search engine that helps you obtain a personal loan that fits your needs regardless of your credit score.
Apply for a private loan at LoanConnect and get pre-approved for up to $50,000 in 5 minutes. Choose terms from 6 to 60 months with rates as low as 6.99% APR.
Due to the flexible lending standards at LoanConnect, it can be easier to get guaranteed approval loans for poor credit in Canada.
Check out this LoanConnect overview.
Loanz
Loanz
Owned by LendingArch Financial, Loanz offers personal loans for those with poor to fair credit. You can be approved instantly and receive your funds in under 24 hours. Loanz offers high approval rates and flexible repayment options.
Interest rate: 29.9% or 46.9%.
Loan term: 12-60 months.
Maximum loan amount: Up to $15,000.
Eligibility: Resident of Canada, the age of the majority in your province or territory, have a chequing account and steady income stream, and not in bankruptcy or collections.
On Loanz’s website
Loanz is a private lender in Canada that offers unsecured personal loans ranging from $1,000 to $15,000 that you can use however you need to.
Whether you are looking for emergency loans in Canada or need to consolidate your debts, Loanz can get you the money in 15 minutes, provided you meet the requirements.
Private loans offered at Loanz have terms of 12 to 60 months and rates of 29.9% or 46.9% APR.
Related: Loanz in-depth explainer.
Cash Money
If you have bad credit and cannot get a loan from a traditional lender, applying for a loan at Cash Money may provide better results.
Cash Money offers payday loans ranging from $100 to $1,500. Loan terms are from 5 to 40 days. Interest rates vary by province or territory.
The requirements are flexible, loan approval is quick, and fund transfer is fast. Payday loans may be expensive, so comparison-shop before deciding where to get your payday loan.
Mogo
Mogo is a Canadian company that gives you access to short-term loans called MogoMini, a flexible line of credit that can be 88% cheaper than a payday loan.
When you open an account at Mogo, you can get a loan pre-approval in 3 minutes and check the available loan options without committing to anything.
Depending on your location and credit profile, you can benefit from an unsecured personal loan with a fixed interest rate. You also get identity fraud protection and credit score monitoring.
Refer to our Mogo loans review for more information.
Consumer Capital Canada
Consumer Capital Canada is a private lender offering private loans (or unsecured loans) ranging from $500 to $12,500, which you can apply for online.
Repayment plans are flexible, from 24 months up to 6 months of monthly or fortnightly payments. You can also make a one-time loan repayment without charges.
To be eligible, you must have a primary source of income with a minimum gross of $2,000 a year. You must also have a credit score of at least 600 to prove creditworthiness.
LoanMeNow
LoanMeNow is another online lending platform that offers easy access to personal loans to borrowers with all types of credit.
While the lender does not conduct credit checks, it requires borrowers to submit employment and banking documents.
Loanable amounts range from $500 to $1,000 with terms of 84 to 90 days. Interest rates vary between 28% and 32%. Upon loan approval, the lender can release the funds within 24 hours.
SkyCap Financial
SkyCap Financial is a private lender that offers alternative financing to Canadians looking for loan solutions that help them resolve financial issues.
It specializes in offering personal loans to borrowers with low or bad credit and considers current income, stability, and credibility instead.
SkyCap offers loans from $500 to $10,000 that you can repay in 9 months or up to 60 months, with APRs as low as 12.99%.
Spring Financial
Spring Financial is a financial technology company that offers private loans without hassle through its 100% online application process.
Whether you need to pay bills or consolidate debts, the private lender allows you to borrow anywhere from $500 to $35,000 and receive the funds the same day through e-transfer.
Terms are 6 to 60 months. Interest rates vary depending on your loan amount and credit score.
goPeer
goPeer is a peer-to-peer lending platform that connects Canadians looking for funding with private lenders looking to invest.
When evaluating borrower eligibility, investors at the goPeer platform consider income, employment status and debt-to-income ratio.
Loanable amounts are anywhere from $1,000 to $35,000, terms from 1 to 5 years and APR starting from 8%. All goPeer loans come with a fixed rate.
Related: goPeer review.
How to Apply For a Private Loan in Canada
While the requirements to apply for a private loan in Canada vary between lenders, the following are the chief factors most lenders look at when assessing a potential borrower:
- Age – At least 18 years old, or the age of majority in your province or territory
- Income – A reliable, steady source of income
- Employment – Many lenders seek employment stability and prefer borrowers to have work for at least 3 months.
- Debt-to-income ratio – This is a metric that lenders use to determine whether or not to grant you a loan. A good debt ratio is 36% or less.
The following are the steps to applying for a private loan in Canada:
- Search online for private lenders specializing in the type of loan that you need. Start with the top 10 best private loans provider enumerated in this article.
- Compare the features of the private lenders, from the loan amounts to repayment terms, interest rates, loan conditions and fees.
- Once you find a suitable lender, go to their website and complete the loan application form. Submit the required documents and information.
- Depending on your chosen lender, you can get the funds within a few hours or after a few business days.
Pros and Cons of Private Loans
Private loans come with advantages and disadvantages, so evaluating your options before making a choice will be beneficial.
Pros:
- Easy application
- Fast approval and funding
- Convenience
- Easier requirements
- Flexible repayments and terms
- Accepts low to bad credit
- High approval rate
Cons:
- Steep interest rates
- Additional fees
- Lower payments mean more interest over the life of the loan
- Attracts predatory lenders
FAQs
Private lending is legal in Canada, but it is not subject to regulations in the way that banks and credit unions are regulated. Private lenders, however, must comply with the laws at the federal and provincial levels.
Payday loans and personal loans with no credit check are among the easiest and fastest to get in Canada. Requirements are minimal, fund release is often quick, and they are available to people with bad credit.
Cash Money is one app that lets you borrow anywhere from $50 to $1,500 for short-term financial needs. When your request to borrow money is approved, the funds can be available via direct deposit in minutes through e-transfer.
A credit score of 600 can be eligible for a private loan. Private lenders do not usually require a high credit score to grant loans. They also consider other factors such as employment status, financial details and Social Insurance Number (SIN).
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