Low-interest personal loans in Canada
Rates starting at 9.99% | $500–$35,000 | Terms 6–84 months
What you should know before you borrow
What counts as a low-interest personal loan in Canada?
For personal loans, anything below 15% is considered a competitive rate. That said, the rate you’ll actually receive is dependent on many factors, including credit history, income, and the lender. With traditional banks, it’s common to get rates of 8-9% for borrowers with strong profiles. Online lenders offer personal loan rates ranging from 10% to 35%. For those with credit card debt at 19.99%-22.99%, a personal loan at 15% can provide significant savings.
What are typical personal loan rates in Canada right now?
When it comes to getting a loan with major banks, their personal loan rates start around 9-10% for well-qualified borrowers. These are considered to be low-rate personal loans in Canada. With online and alternative lenders like Spring Financial, rates range from 9.99% to 34.95%, and APRs range from 9.99% to 35.00%. The average borrower with an average credit score falls somewhere between 12% and 22%.
APR vs. interest rate: What rate should you actually compare?
The interest rate is the annual cost of borrowing the principal amount of the loan, expressed as a percentage. This is different from the APR (Annual Percentage Rate). The APR includes the interest rate and any applicable fees associated with the loan, expressed as an annual rate. Ideally, you’re looking for a personal loan with a low APR in Canada. When you’re comparing your loan offers, it’s best to use the APR. Even two loans with the same stated interest rates can have very different APRs, especially if one carries origination fees. By using APRs, you can find the best interest rate on a personal loan in Canada.
How much does your credit score affect the rate you will get?
Your credit score can impact the rate you’ll receive. Lenders will pull your credit score from Equifax or TransUnion and use it as one of the factors in order to determine your loan. With a credit score above 700, you can typically get approved for the most competitive rate personal loans in Canada.
With credit scores between 600 and 699, you’ll likely receive mid-range offers, and scores below 580 will likely receive higher rates with alternative lenders who will approve you. With Spring Financial, those with all credit types can get approved for a personal loan, since an approval is based on more than just your credit score.
When you’re looking at getting a loan, some lenders will require a hard credit check to finalize your approval, where a soft credit check was only used to get a pre-approval. Usually, this means that they also report to the credit bureaus. No matter what you need to finance, this is actually a good thing. With a lender like Spring, you can still get approved for an unsecured loan without having to leverage any assets like a car or a house, and improve your credit score.
Are Spring Financial's loan rates fixed or variable?
Spring Financial offers fixed-rate personal loans. This means that your rate is determined upon your approval and that no changes are made during your repayment period. Even if the Bank of Canada adjusts its policy rate, your rate is locked in. Depending on your profile, you can gain access to some of the lowest-interest loans in Canada.
Personal loans vs. lines of credit: which one is right for you?
With a personal loan, you get a lump sum upfront, with a fixed repayment schedule and a fixed rate. A line of credit is a type of revolving credit. You get a fixed credit limit that you can draw on as needed; however, it usually comes with a variable rate. When you need funds for planned expenses like debt consolidation, home renovations, or even a major purchase, a personal loan with a fixed monthly payment is often easier to budget around.
How fast can you get your funds?
After you apply, you can often get a decision within hours. If you’re approved and all of your documentation is verified, you can get your funds as soon as the same day. That said, most approved applicants receive their funds within 1-2 business days.
What does it cost to apply?
With Spring, there is no cost to apply, and you aren’t obligated to accept any offers that you may receive. Any costs that are associated with the loan are clearly disclosed to you before the loan agreement is finalized.
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Personal loan rate comparison in Canada
Major Bank
Credit Card
Payday Loan
- Interest Rate
- 9.99%–34.95%
- 8%–18%+
- 19.99%–22.99%
- 365% APR
- Loan Amoun
- $500–$35,000
- Varies
- Up to credit limit
- $100–$1,500
- Fixed Rate
- Yes
- Often yes
- No
- N/A
- Online Application
- Yes
- Branch/online
- N/A
- Yes
- Credit Score Required
- All profiles considered
- Usually 660+
- Varies
- Usually none
- Funds Timing
- As soon as the same day
- 1–5 business days
- Immediate (existing)
- Same day
- Reports to Bureaus
- Yes, Equifax & TransUnion
- Yes
- Yes
- Usually no
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How to apply for a low-interest loan in 3 simple steps
Three steps:
Complete the online application
It only takes a few minutes, and you can complete the entire process from your device.
Go through the verification process.
Your applications and documents are reviewed. Additional documents may be requested (e.g., pay stubs, government-issued ID, bank account verification).
Receive your funds
If you’re approved, the funds are deposited directly into your bank account, as soon as the same day, subject to verification.
To be eligible, you must:
Be the age of majority in your province or territory
Have a valid government-issued ID
Have an active Canadian bank account
Have a steady source of income (employment, self-employment with tax returns required, CPP, OAS, disability benefits, pensions, ODSP, Ontario Works, and certain forms of EI are all accepted)
Applying will not affect your credit score, and there is no cost to apply.
Trusted by hundreds of thousands of Canadians
Over one million applications received | Founded 2014 | Reports to Equifax & TransUnion
I was able to get a loan against all odds with a young credit history, high credit utilization, and a low bank balance. I was approved when I needed it most. Their process was smooth and professional. I’m truly grateful!
Emmanuel · Toronto, ON
“I was in need of emergency financial assistance, and Spring assisted me with funds in record breaking time, they gave me an affordable repayment plan. I am so grateful to them and would recommend you give them a try.”
Bobby · Calgary, AB
“Spring Financial deserves every bit of praise I can give them. After being turned down by multiple banks and feeling completely defeated, Spring Financial gave me hope when I had none. Highly recommend.”
Don · Winnipeg, MB
“They made it very easy to get the loan I was looking for. They are very courteous, professional, and communication was very good. They made sure I understood all terms and options. I can’t recommend them enough.”
Andrew · Vancouver, BC
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Everything you need to know about low-interest personal loans in Canada
Contents
What determines your personal loan interest rate in Canada?
When it comes to interest rates, three different factors are going to affect your rate. Here’s how it works.
Your credit profile: This includes credit scores from Equifax and TransUnion, your payment history, and how much you currently owe relative to your income. Those with a clean credit report and steady employment are likely to get the best offers. If you have bad credit, your application will be treated more conservatively.
Your income level: Your income is considered because lenders want to ensure your payments fit your cash flow. However, it’s not just about how much you earn; it’s also about how much of your income is already committed to existing obligations.
Lender pricing models: These vary significantly by lender. Since larger banks have a lower cost of capital, they also have stricter approval criteria. Online lenders are known for pricing higher to account for broader approval flexibility. That said, neither one is objectively better; it just depends on your overall profile.
Fixed vs. variable: which should you choose?
With most personal loans in Canada, you’re likely to get a fixed interest rate. There are also variable-rate products, with lines of credit being the most common. With variable rates, the rate is tied to the lender’s prime rate and changes based on the Bank of Canada’s policy rate.
For personal loans specifically, a fixed rate is almost always preferable. This is because you know exactly what your monthly payments will be from the first day, and you aren’t exposed to rate hikes. For personal loans that are used to consolidate debt, having predictable payments can help you stick to your budget.
That said, variable-rate products can be a good choice in certain circumstances, especially if you’re borrowing short-term or you expect rates to fall soon. It’s also a good choice if you want flexibility to pay your balance down quickly without having a fixed repayment schedule. If you have a long-term installment loan, a fixed-rate is a better option since it offers flexible repayment options.
With Spring Financial, all personal loans have fixed interest rates. Your rate is set at approval and remains the same for the life of the loan.
How your credit score affects your personal loan rate
Here’s what the difference in rate can cost on a $10,000 loan over 36 months:
Rate | Monthly Payment | Total Interest Paid | Total Cost |
9.99% | $322 | $1,614 | $11,614 |
14.99% | $347 | $2,479 | $12,479 |
19.99% | $372 | $3,337 | $13,337 |
29.99% | $428 | $5,395 | $15,395 |
34.95% | $457 | $6,275 | $16,275 |
On a $10,000 loan over 36 months, the cost difference between 9.99% and 19.99% is almost $1,800. A 1% reduction in the rate costs you roughly $175-$200 over 36 months with a loan of that size. While this doesn’t seem like a lot, a drop of 5 percentage points can save you close to $1,000.
This is why improving your credit profile before borrowing has a lot of impact. If you’re right on the edge between the rates of 19.99% and 14.99%, then it’s worth taking some time to pay down your balances and improve your score. It can even be a good time to address your missed payment history, if you have one.
With Spring Financial, all payment activity is reported to both Equifax and TransUnion. Making consistent, on-time payments can build your credit history, which can lead to lower rates when you borrow money in the future.
Can you use a low-interest personal loan to consolidate debt in Canada?
For most Canadians carrying outstanding balances on multiple credit cards with rates of 19.99% to 22.99%, consolidating debt is one of the better uses of a personal loan. In fact, since some credit card rates can even go higher, consolidating that debt into a single personal loan at a lower interest rate can save you a lot of money. You’ll likely pay less in total interest and reduce the number of monthly payments to just one.
That said, this math only works if the personal loan rate is lower than the blended rate of your existing debt. If you have $15,000 in debt across 3 cards with a 21% rate, consolidating into a 14.99% rate reduces your annual interest cost by roughly $900. This adds up even more over a 36-month term.
One important thing to consider, though, is that this only works if you don’t rack your cards back up again. Doing so can cost you more money. You should also note that a Spring Financial loan can also be used for home renovations, major purchases, a new or used vehicle, or any other reason that fits your borrowing needs.
Online lenders vs. banks for personal loans: which gives you a better rate?
While banks generally offer the lowest interest rates, they also have the tightest approval criteria. Those with an excellent credit score, steady employment, a long employment history, and an existing banking relationship can have access to these loans.
If you don’t meet that criteria, then it’s not likely that you’ll get a loan from a bank. Unlike online lenders, banks don’t price based on risk; they just decline it. Online lenders like Spring Financial price risk. This means you can still get a loan with a lower credit score, but your rate may be higher.
Another trade-off to consider with an online lender is the speed and convenience it offers. Online applications only take a few minutes, and no appointments are required. For borrowers who need funds quickly, a personal loan with Spring can offer competitive interest rates and the comfort of terms from your own home.
Before you make a decision, though, you need to consider the total costs. On a $10,000 loan with a rate of 14.99% and a term of 36 months, you’re looking at $2,479 in interest costs. With a rate of 19.99% over the same term, the interest costs are roughly $3,396. The difference between the two costs is $917 and should be considered when choosing the best borrowing solution for you.
Is a personal loan a cheaper alternative to a credit card in Canada?
The average credit card in Canada charges rates of 19.99% to 22.99% on carried balances. Many store or retail cards have even higher interest rates. Using a personal loan to pay off that balance, even at rates of 15-17%, saves more money immediately.
Besides debt consolidation, a personal loan is a great financing tool for a large purchase, especially if you would otherwise use a credit card and pay only the minimum. With credit cards, minimum payments are designed to extend your repayment period and maximize the amount of interest you pay. With a 36 or even a 60-month personal loan, a fixed payment can clear your debt on a payment frequency that works for you. Common choices are monthly, semi-monthly, and bi-weekly.
However, credit cards can be a good option if you’re able to pay your balance in full every month, while earning rewards points. If this is the case, then your interest rate never kicks in. However, if you have a balance, a personal loan is almost always cheaper.
Can you get a low-interest loan with bad credit in Canada?
Low interest rates and bad credit are usually mutually exclusive, since lenders charge higher rates to offset the risk associated with lower credit scores. However, 34.95% from a licensed lender is very different from a 365% APR payday loan. The outcomes of these loans differ as well.
Payday lenders typically don’t report to credit bureaus. These financial products don’t help you build your credit score, whereas Spring Financial does. They report to both Equifax and TransUnion, so those who make responsible repayments can actively improve their credit scores over time.
If you have a lower credit score, the best thing you can do is:
- Apply to see what rate you’re offered
- Make all of your payments on time to build your credit history
- Refinance after 12-24 months of a clean payment history in order to get a reduced rate
Even if you have a consumer proposal or a bankruptcy on your credit file, it is still possible to get a personal loan with Spring Financial. In fact, Spring reviews applications from those currently in a consumer proposal or bankruptcy, or those who have been recently discharged. Your eligibility for a personal loan depends on your overall financial situation and isn’t based solely on your credit score.
How a co-signer can help you get a lower personal loan rate in Canada
If you get a co-signer, they agree to share responsibility for the loan. If the primary borrower misses a payment, then the co-signer is now liable. In exchange for this, the lender’s risk is reduced, which can result in a lower rate or just improved approval odds for the primary applicant.
With Spring Financial, a co-signer isn’t required in order to get a personal loan. However, in some cases, adding a co-signer can help to support your application. Each application is assessed individually, and Spring’s team can let you know what information is needed in order to pursue this option.
Before you ask someone to co-sign for you, it’s important to note that it’s a pretty significant ask. Your co-signer’s credit will be pulled, and any missed payments will affect their credit profile. They must understand the full impact before they agree to be a cosigner.
How to compare personal loan rates in Canada: what to look for beyond the number
Your interest rate alone doesn’t give you the full picture of your loan’s cost. When you’re comparing your borrowing options, there are some other things you should also look at.
APR: The APR isn’t just the stated rate of your loan. It includes origination fees and administrative costs. Your APR can make a 10% loan more expensive than an 11% loan, once you factor in all the added costs. So instead of looking for a personal loan with 10% interest in Canada, you want to look for a 10% APR.
Term length: A longer-term loan means lower monthly payments but increases total interest costs. With a shorter loan term, you pay more per month but have a lower cost overall. You should consider your cash flow before you agree to the terms of a loan.
Fixed vs. variable rates: When it comes to a long-term installment loan, fixed is usually better. Variable rates are subject to interest-rate fluctuations.
Prepayment penalties: It’s important to consider whether you can pay off the loan in full without any fees. With Spring Financial, you can. You can make additional payments and pay off your balance at any time, without penalty. This isn’t something that all lenders offer, though, so it’s important to check.
Credit bureau reporting: When you’re looking to build or rebuild your credit score, credit reporting is really important. You should verify if the lender reports to both Equifax and TransUnion, as Spring Financial does.
You have questions,
we have answers.
How does Spring Financial's interest rate compare to a major bank's personal loan?
With major banks, rates on personal loans start around 8-9% for well-qualified borrowers. Those with scores above 700, stable long-term employment, and good relationships with banks will likely qualify for these rates. With Spring Financial, rates start at 9.99% and range from 9.99% – 34.95% (APR 9.99%-35.00%). The biggest difference between the two is that Spring offers more access by offering loans to a wide range of applicants with all credit scores.
What is the average personal loan interest rate in Canada?
When it comes to personal loan rates, the average varies significantly by lender type and borrower profile. When it comes to online and alternative lenders, rates range from roughly 10% to 35%. Borrowers with a credit score of 660+ and a steady income can access rates of 10%-16 % from reputable online lenders.
Is Spring Financial's personal loan rate fixed or variable?
With Spring Financial, your rate is set at approval and won’t change during the life of the loan. Even if the Bank of Canada changes its policy rate, your rate will stay the same, unlike many mortgage rates and other variable-rate financial products.
What is the difference between APR and the nominal interest rate?
When it comes to rates, the interest rate is the annual cost of the principal you borrow. The APR (Annual Percentage Rate) includes the interest rate and any additional fees associated with the loan, and is expressed as an annual rate. If your loan has origination fees, then the APR will be higher than just the stated interest rate alone. The APR is the most accurate rate you can use to compare rates with different lenders.
How much does a 1% lower interest rate save me on a $10,000 loan?
If you have a loan of $10,000 with a term of 36 months, each 1% reduction in your interest rate saves you roughly $175-$185 in total interest costs. Over 60 months, the savings per 1% increase are roughly $275-$300. With loans of larger amounts and longer terms, a small percentage difference can be more significant than you think.
Can a co-signer help me get a lower rate?
While a co-signer or guarantor isn’t required to apply for a personal loan with Spring Financial, it can help support your application. This is because a co-signer agrees to share responsibility for the loan, which can reduce the lender’s risk and improve the terms of the loan you can get approved for.
Can I get a low-interest personal loan with bad credit in Canada?
While you can get a personal loan with a lower credit score, the rate is dependent on your overall financial profile. Spring Financial considers applications from individuals with a wide range of credit scores, which includes those with bad credit. Borrowers with a score below 580 will usually have higher rates than borrowers with a score above 660. However, a licensed lender’s rate will be lower than the annualized cost of a payday loan, even at the higher end. Unlike with payday lenders, Spring reports to both Equifax and TransUnion, so making responsible repayments can help to improve your credit score.
How does my credit score affect the rate I get?
When it comes to getting a personal loan, a credit score is one factor in your rate pricing. Higher credit scores indicate lower default risk for lenders than lower scores; this is why they are often rewarded with better rates. Those with scores below 580 face higher rates and fewer lender options. If your credit score is 580-660, mid-range rates are available. If you have a credit score above 660, you’re in a position to get the most competitive offers from both banks and online lenders. With Spring Financial, eligibility is based on many different factors, including your income and existing obligations, as well as your credit score.
What is the fastest way to get a low-interest loan online in Canada?
You can get your loan faster by applying online, having your documentation ready (government-issued ID, banking information, and recent pay stubs), and responding quickly to lenders’ follow-ups. You can often get a decision in a matter of hours, and your funds can be available as soon as the same day. However, this is subject to verification, so most applications are funded within 1-2 business days.
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