Low-interest personal loans are an ideal way to cover expenses without getting stuck with exorbitant interest rates.
Getting a low-interest personal loan requires excellent credit. There are numerous loan options, so finding the ideal solution may be challenging.
Read on to learn which platforms offer the lowest interest rates on personal loans, fees, loan amounts, repayments, and more.
Key Takeaways
- The top three best online lenders that provide personal loans are Loans Canada, LoanConnect, Mogo and Loanz.
- Low-interest personal loans offer some of the most competitive rates, with some lenders offering rates as low as 2.99%.
- Terms for low-interest rate personal loans are also longer, with some lenders offering up to 120 months.
- These loans are exclusive for borrowers with excellent credit scores and high incomes.
Best Personal Loan Rates In Canada
Find below lenders that provide some of the best personal loan rates in Canada.
1. Loans Canada
Loans Canada is a loan search platform and one of the direct private lenders for personal loans in Canada.
It works by matching borrowers with lenders that provide loan solutions that suit their credit scores.
At Loans Canada, borrowers can apply for up to $50,000, with terms that range from 3 to 60 months and interest rates as low as 2.99%.
Depending on the lender, the following list includes the requirements necessary for loan approval:
- A Canadian citizen or permanent resident
- Age of majority in your province
- A valid government-issued ID
- Social insurance number
- A valid Canadian address
- Specific credit score requirements
- Proof of employment
- Proof of income
- Bank statements
- An active chequing account
Here are the steps to apply for a personal loan at Loans Canada:
- Go to the Loans Canada website. Click “Apply Now.”
- Select the service you want to use.
- Supply the necessary information, such as your personal, employment, and financial information.
- Submit your application.
- Prepare and submit the documents needed by the lender.
- Loans Canada will analyze the information you provided and find the ideal third-party solution available.
- Receive third-party offers by phone or email.
Approvals can take about 48 hours. After the lender approves your loan, you will receive your funds according to how you instructed in your application.
Loan repayments can be weekly, bi-weekly or monthly. Your lender may require the automatic withdrawal of loan repayments from your account.
Check out our Loans Canada review.
2. LoanConnect
LoanConnect is an online search platform in Toronto where borrowers can get the best personal loans in Canada via lenders offering customized solutions that fit their credit.
The platform enables borrowers to get pre-approved for unsecured personal loans of up to $50,000 in 5 minutes.
Loan repayment terms range from 6 to 60 months. Its starting APR of 6.99% is among the lowest personal loan rates in Canada.
To qualify for a LoanConnect personal loan, you must meet the following requisites:
- Be at least 18 or 19 years old, depending on your province
- Be a Canadian resident
- Have a valid bank account
- A government-issued ID
- Proof of income
- Bank statements and other documents
The loan application process is completely online and can be finished within minutes. To apply, follow these steps:
- Go to the LoanConnect website and click the “Apply Now” button.
- Fill out the online application form and supply the required information, such as loan amount, purpose, personal details, phone number, address, and employment details.
- Click “I Agree to All” or “Just Look for a Loan” to proceed.
- Once you get verified and meet eligibility, review the loan terms and other details.
- When you receive loan approval, sign the loan agreement.
- Receive the funds within 48 hours or as soon as 15 minutes.
Loan repayments will be through automatic withdrawals via your bank account.
Find out more about LoanConnect here.
3. Fairstone
A part of Fairstone Bank, Fairstone provides personal loans online and at 250 branches across Canada. Fairstone offers unsecured and secured personal loans ranging from $500 to $50,000 to borrowers with fair to good credit.
The loans feature fixed interest rates during the term of the loan, starting from 26.99%* on an unsecured personal loan and 19.99%** on a secured personal loan.
Loan terms range from 6 to 60 months for unsecured personal loans and 36 to 120 months for secured personal loans.
Pay off your loan balance on a payment schedule that fits your needs and budget – choose from weekly, bi-weekly, semi-monthly, or monthly payments.
There are no prepayment charges on an unsecured personal loan from Fairstone, which means you can make extra payments on your loan or pay off the balance early, without any fees. While you can pay off a secured personal loan early, prepayment charges will apply and vary based on your individual situation.
You should meet some minimum requirements to qualify for a loan at this financial institution:
- Minimum credit score of 550
- No bankruptcies discharged less than 4 years
- Monthly income must exceed $1,000 (or $12,000 annually)
- Must have credit activity within the last 24 months, at least one valid trade line open for at least 3 months and one valid trade reported within 6 months.
Learn more about Fairstone and how it works.
*Interest rates are subject to change. Actual Annual Percentage Rate (APR) varies based on the province of residence and individual factors like credit details and loan amount. The interest rate on an unsecured personal loan is 31.99% in BC, 31.99% in MB, and 34.99% in QC.
**On approved credit. Terms and conditions apply. Interest rates vary by province/territory and from customer to customer based on factors like credit score and borrowing history. See Fairstone’s website for details.
In Ontario, Fairstone Financial Inc. is licensed as mortgage brokerage 10821. In Nova Scotia, Fairstone Financial Inc. is licensed as mortgage lender #2021-3000028.
4. Loanz
Loanz is an online lender based in Alberta that offers personal loans to Canadians who need funds for various purposes.
One of the easiest banks to get a loan in Canada, Loanz offers unsecured loans ranging from $1,000 to $15,000, with terms of 12 months to 5 years, and no collateral needed.
Interest rates range from 29.9% to 46.9%. During repayment, your interest rates and payments will remain fixed until you pay off your loan.
To apply for a Loanz personal loan, follow these steps:
- Go to the Loanz website.
- Fill out the loan application form in 3 minutes or less.
- Confirm the details you entered and click “Submit.”
- Get a loan offer from Loanz detailing the loan terms, amount, and interest rate.
- If you agree to the loan agreement, sign the document.
- Receive the funds in your bank account in as little as 15 minutes.
Eligibility requirements for a Loanz loan are as follows:
- Over the age of 18
- Have a chequing account
- A government-issued ID
- A valid Canadian ID
- Bank account information
- A steady source of income
- Proof of employment
- Must not have any debt in collections
- Must not be in bankruptcy
Loanz services are available in AB, BC, MB, NB, NL, NT, NS, NU, ON, PE, QC, SK, and YT.
Here’s a detailed Loanz review.
5. Skycap Financial
Skycap Financial is an Ontario-based alternative lender that provides personal loans to Canadians.
Skycap offers installment loans of $500 to $10,000 and terms ranging from 9 to 60 months.
APRs range from 12.99% to 39.99%, depending on your credit score, financial stability, and current income.
For repayments, Skycap will provide a pre-authorized payment plan set up with automatic payments for automatic withdrawals when payments are due.
Skycap is available in AB, BC, MB, NL, NB, NT, NU, ON, SK, and YT.
6. Mogo
Mogo is a fintech company offering loans and other products that help consumers with their finances through lending solutions like personal loans and emergency loans in Canada.
The lender offers personal loans for borrowers with fair to good credit. Also available are open-ended MogoMini lines of credit.
Mogo loan amounts range from $100 to $35,000, with loan terms ranging from 6 to 60 months. Interest rates start from 9.90%. Minimum payments include interest and optional fees.
Mogo loans are available in AB, BC, MB, NB, NL, NS, and PE.
Related: Mogo Loans review.
7. GoPeer
GoPeer is the first peer-to-peer lending platform in the country. It works by connecting creditworthy Canadians with other Canadians looking to invest.
It offers unsecured personal amortizing loans across Canada. Loan amounts are from $1,000 to $35,000, while terms range from 1 to 5 years.
GoPeer offers one of the lowest personal loan rates in Canada, with APRs as low as 8%.
All loans come with fixed interest rates that depend on your credit profile, financial position, and ability to pay the loan.
GoPeer charges one origination fee based on your loan amount. There are no hidden costs or early repayment fees. GoPeer lending rules may vary by province.
Learn more about GoPeer in this review.
8. SympleLoans
SympleLoans is an online lender that offers unsecured personal loans from $5,000 to $50,000 (with no collateral required) with customized rates and terms.
Interest rates start at 6.99%, among the lowest personal loan rates in Canada. Flexible payment terms range from 1 to 7 years, with no early repayment fees.
Following approval, you can get your funds by the next business day. The lender may add a one-time origination fee of 0 to 5% to your loan principal that you pay off over your loan term.
9. LendDirect
LendDirect is an online lender that offers personal loans of up to $15,000 with rates starting from 19.99%.
To apply for a personal loan, fill out an application form or call LendDirect. Submit the required documents that verify your income to get a final lending decision within 60 minutes or less.
When approved, get your money in as little as 15 minutes via e-transfer or your chequing account.
10. Spring Financial
Spring Financial is an online lender offering personal loans ranging from $500 to $35,000.
Taking out a loan at Spring Financial requires a decent credit score and credit history. Other factors for approval include current income and debt load.
After approval, you can receive the funds on the same day. You can pay off your loan anytime with no penalties.
Low-Interest Personal Loans Explained
A low-interest personal loan is an installment loan that allows you to borrow a lump sum of money and repay it with fixed monthly payments with interest over a specified period.
As the name implies, a low-interest personal loan has interest rates lower than those of other lending products.
Low-interest personal loans are typically reserved for borrowers with higher credit scores, high incomes, multiple assets, and little debt.
How To Apply For a Low-Interest Personal Loan
Follow these basic steps to apply for a low-interest personal loan:
- Apply by filling out an online application form or visiting a financial institution branch.
- Provide the required information.
- Receive a response within one to two business days.
- Attend a meeting or interview with a lender representative to discuss your request.
- Get approval within days to a few weeks, depending on your lender.
- Review your loan agreement before signing the contract.
- Receive your money via direct deposit into your account or e-transfer.
The basic requirements to apply for a low-interest personal loan include the following:
- A Canadian citizen or permanent resident
- At least 18 or 19 years old
- A permanent address
- A steady income
- An active bank account
Depending on your lender, you may also need to submit documents and other paperwork such as:
- Pay stubs within the last three months
- Employer letter
- List of assets and debts
- Income tax return
How To Choose the Best Low-Interest Personal Loan
If your finances are in order, it will be easy for you to apply for a personal loan. The following steps will help find you the best option:
- Compare low-interest loans. Shop around for the best interest rate to help lower your personal loan costs. Consider prequalifying to see your potential credit limits without affecting your credit score.
- Calculate the total cost of your loan. The interest rate can increase the total cost of your loan. Depending on your loan terms, you may be paying more than necessary.
- Inquire about the annual percentage rate (APR). Ask for a breakdown of the APR for a perspective of your loan cost. Make sure to compare offers from different lenders.
- Check for fees and extra charges. Aside from the interest rate, find out if your low-interest personal loan comes with added fees, such as origination charges, NSF or late charges, or loan insurance.
Pros and Cons of Low-Interest Personal Loans
A low-interest personal loan offers several benefits for borrowers:
- Competitive rates and flexible terms
- Helps build credit
- Simplifies debt consolidation
- Provides fast access to cash
- Easier to manage
- Extended loan terms
Along with their benefits, low-interest personal loans come with these downsides:
- Only available to borrowers with high credit scores and high incomes
- May come with fees and penalties
- More eligibility requirements
Conclusion
Access to low-interest personal loans is crucial in unexpected situations or if you have urgent financial needs.
Before taking out a loan, check that you have the capability and dedication to making timely loan repayments.
Personal loans are an obligation and a commitment, so you must be confident that you understand all the loan aspects before affixing your signature.
FAQs
While a good interest rate would be closer to the prime rate, it depends primarily on your credit score. If you have outstanding credit, you will likely qualify for low-interest rates like 9.99%. If you have bad credit, your interest rates can range from 18% to 46%.
No, you cannot because there is no zero-interest personal loan. Lenders work by providing credit products and lending money with interest. There is instead 0% financing, but it is applicable to purchases like cars, electronics, and others.
Not all banks provide information on interest rates on their websites, but you can find rates ranging from 9% to 20%. Banks typically offer competitive rates for personal loans due to their strict requirements.
Banks are not the easiest financial institutions to get a loan from because they have the strictest standards and are stringent with eligibility requirements. In contrast, alternative lenders such as Loans Canada and Loanz provide loan products with quick application and approval processes that you can usually complete in a day.
A secured loan usually has the best interest rate compared with some credit products. Lenders consider a secured loan less risky than an unsecured loan due to the asset backing up a secured credit. Having collateral on your loan helps you save money on interest, too.
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