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Best Unsecured Personal Loans in Canada for 2023

An unsecured loan is a personal loan that has no collateral requirements.

This type of loan does not require you to provide a security deposit or use an asset, such as your car, to secure the loan before you can qualify.

In general, you need a good credit score to access unsecured loans at a bank or from an online lender.

While unsecured loans are also offered to those with bad credit, they come with significantly higher interest rates because the lender assumes a higher risk.

Read on to learn about the best unsecured loans in Canada in 2023.

Best Unsecured Loans in Canada

Loan AmountInterest RateLoan Term
LoanConnect$500 – $50,0006.99% to 46.96%3 – 120 months
Loans Canada$500 – $50,0001.99% to 46.96%4 – 6 months
LoanzUp to $15,00029.9% to 46.96%12 – 60 months

LoanConnect

LoanConnect is an online platform for comparing loan rates from various lenders.

It offers a variety of unsecured personal loans with low to high-interest rates depending on your credit profile.

You can use loans on this platform to consolidate debt, pay off your credit card, rebuild credit, buy a car, make home improvements, buy a big-ticket item, etc.

After completing the online application, your loan can be pre-approved in as little as 60 seconds, and the cash can be deposited in your bank account within 24 hours.

  • Loan amount: $500 to $50,000
  • Loan rates: 6.99% to 46.96%
  • Loan term: 3 – 120 months

Visit LoanConnect or read our full review.

Loans Canada

Loans Canada has been helping Canadians compare loan rates and get financing since 2012.

The site features lenders that cater to individuals with good and bad credit scores.

In addition to using LoansCanada for unsecured loans with low-interest rates, you can also get credit-building and bad credit loans via the platform.

To start your loan search, complete an online application, and they will reach out to you with your best options.

  • Loan amount: $500 to $50,000
  • Loan rates: 1.99% to 46.96%
  • Loan term: 4 – 60 months

Visit LoansCanada.

Loanz

Loanz is a top option if you want an unsecured personal loan with bad credit and you need instant approval.

The cash you receive can be used for anything, including unexpected emergency expenses, debt consolidation payments, and more.

To qualify for a loan, you will need to submit an online form. If approved, you could receive funds in as little as 15 minutes.

Eligibility requirements include:

  • A steady source of income (at least $1,200 per month)
  • Not in bankruptcy or collections
  • At least 18 years old

Loan amounts range from $1,000 to $15,000, and interest rates are from 29.9% to 46.9%.

Visit Loanz.

What is an Unsecured Loan?

An unsecured loan is a type of personal loan with no collateral.

The lender assesses your application and approves it if you meet their financial requirements, which generally include your credit history, credit score, employment, and income sources.

Unsecured loans can be used to:

  • Consolidate high-interest debt
  • Pay for emergencies
  • Finance a business
  • Buy a car
  • Pay for a vacation
  • Fund home renovations, etc.

Because these loans do not involve providing collateral, the lender looks at your credit score to assess your creditworthiness.

A higher credit score means you can get a lower interest rate. A poor credit score could tank your application, or you may qualify at a much higher interest rate.

Who offers Unsecured Loans in Canada?

You can apply for an unsecured loan at your current bank or credit union. If they do not work out, online lenders and loan comparison sites can help.

There are also direct private lenders for personal loans in Canada.

While you can also get unsecured loans from payday lenders, these can be extremely expensive and are not recommended.

How To Get an Unsecured Loan in Canada

For LoanConnect, Loans Canada, and Loanz, you can simply apply online and complete the entire process without leaving your home.

The bank requirements for approval typically include age (at least 18), employment (have a source of steady income), residency (Canadian citizen or permanent resident), and credit history.

You may need to provide the following documents:

  • Proof of income such as a paystub or bank statements
  • Proof of address, such as a utility bill
  • Proof of age, such as a driver’s license

Benefits of Unsecured Loans

Unsecured personal loans offer some advantages:

  • No collateral is required
  • Online lenders have a simplified process
  • You can repay the loan early without prepayment penalties (in most cases)
  • Can be used to build credit
  • Can be used for almost anything

Downsides of Unsecured Loans

The cons of unsecured personal loans are:

  • Qualification requirements are stricter
  • Interest rates may be higher than some secured loans
  • A lender can still go after your assets if you default on repayments, and non-payment will damage your credit score

Unsecured Loan Payoff Calculator

FAQs

What is a secured loan?

A secured loan requires the borrower to provide collateral that the lender can seize if you fail to make payments.

What documents do I need to apply for an unsecured loan?

You will generally need to provide a government-issued ID, proof of age and residency, and proof of income, e.g. paystubs.

How much money can you borrow with an unsecured loan?

The maximum unsecured loan available through the online lenders on this list is $50,000.

Do banks give unsecured loans?

Many Canadian banks give out unsecured loans; however, their application and approval process is more stringent than online and private lenders.

What is the cost of an unsecured loan?

The interest rates on unsecured loans vary based on your financial situation and credit history. A higher credit score can help you qualify for lower rates. The loan rates offered by the featured lenders range from 6.99% to 46.96%. You should also confirm with the lender whether it has origination fees.

Related:

Top Loan Offer this month

Compare the best loans for good and bad credit in Canada

Get the best loan rates from lenders regardless of credit score.

Quick online application from the comfort of your home.

Borrow up to $50,000 for 3 months to 60 months.

Loans for any reason with rates from 2.99% to 46.96%.

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Author

Gravatar for Enoch Omololu, MSc (Econ)
Enoch Omololu, MSc (Econ)

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch is passionate about helping others win with their finances and has been writing about money matters for over a decade. He has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, CBC News, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, and many other personal finance publications. You can learn more about him on the About Page.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

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