Bad credit loans in Ontario — Get $500 to $35,000
Personal loans for Ontario residents with bad credit, poor credit, or no credit history. You can get anywhere from $500 to $35,000 with rates starting at 9.99% and terms from 6 to 84 months. You can pay in full at any time with no penalty, and no collateral is required.
What you need to know before applying for a bad credit loan in Ontario
Even if you have bad credit, you can still get a loan. Before you apply anywhere, here’s what you should know.
What credit score is considered as "bad credit" in Ontario?
The credit bureaus in Canada consider 579 the line between bad and fair credit. Scores between 300 and 579 are poor credit scores in Canada. However, most banks won’t approve a personal loan with a credit score below 650, which is where alternative lenders come in.
What types of bad credit loans are available in Ontario?
Three main options for Ontario borrowers:
- Unsecured Personal Loans — These loans don’t require collateral and are available with terms ranging from 6 months to 84 months. For most Ontario borrowers with bad credit, this is the preferred option since it allows you to build your credit score as long as you make your payments on time.
- Secured Loans — These loans require an asset, such as a car or a house. Since there is collateral, it’s easier to get approved, and you will often get lower interest rates. When you don’t make your payments, the asset will be seized to cover the remaining balance.
- Payday Loans — These are short-term loans that often need to be repaid by your next payday. The approval is often very simple, but the interest rate is high at around 365%. There’s also no positive impact on your credit score, since no positive payments are reported.
What do they cost
The cost of the loan will depend on the type of loan you take out, as well as the interest rate that you’re approved for. For personal loans intended for borrowers with bad credit, interest rates can range from 9.99% to 34.95%. Under Ontario law, the price for payday loans is around $14 per $100.
When you’re looking at a loan, what you really need to keep in mind is the APR. The APRs (Annual Percentage Rates) include all interest and fees, which is what you need to determine what the loan will cost annually.
Who qualifies?
The cost of the loan will depend on the type of loan you take out, as well as the interest rate that you’re approved for. For personal loans intended for borrowers with bad credit, interest rates can range from 9.99% to 34.95%. Under Ontario law, the price for payday loans is around $14 per $100.
When you’re looking at a loan, what you really need to keep in mind is the APR. The APRs (Annual Percentage Rates) include all interest and fees, which is what you need to determine what the loan will cost annually.
How fast can you get your loan funds?
Online lenders can fund your loan the same day; however, this depends on verification. Realistically, most approved loan applications are funded within 1–2 business days.
Will applying affect your credit score?
Applying for a loan won’t affect your credit score with most reputable lenders because a soft credit check is used to determine your eligibility. Soft credit checks don’t show up on your credit report. A hard credit check is only done if you decide to proceed with the loan after your initial approval, and the lender will need your consent to run it.
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Spring Financial vs. banks vs. payday lenders — How we compare
Here’s how Spring Financial compares to other options available to bad-credit borrowers in Ontario.
Major Banks
Payday Lenders
- Credit score req.
-
No published minimum
- Typically 650+
- None
- Loan type
- Unsecured (no collateral)
- May require collateral
- Unsecured, short-term
- Loan amounts
- $500 – $35,000
- Usually $5,000+
- Up to $1,500
- Interest rates
- Start at 9.99%
- Typically under 15%
- ~365% APR
- Approval timeline
- Often within hours
- Days to weeks
- Minutes
- Funding
- E-transfer, as soon as the same day
- 3–5 business days
- Same day
- Reports to bureaus
- Equifax and TransUnion
- Yes, they choose one or the other.
- No
- Early repayment penalty
- None
- Varies
- N/A
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Spring Financial vs. Banks vs. Payday Lenders — How We Compare
Here’s how Spring Financial compares to other options available to bad-credit borrowers in Ontario.
Major Banks
Payday Lenders
- Credit score req.
-
No published minimum
- Typically 650+
- None
- Loan type
- Unsecured (no collateral)
- May require collateral
- Unsecured, short-term
- Loan amounts
- $500 – $35,000
- Usually $5,000+
- Up to $1,500
- Interest rates
- Start at 9.99%
- Typically under 15%
- ~365% APR
- Approval timeline
- Often within hours
- Days to weeks
- Minutes
- Funding
- E-transfer, as soon as the same day
- 3–5 business days
- Same day
- Reports to bureaus
- Equifax and TransUnion
- Yes, they choose one or the other.
- No
- Early repayment penalty
- None
- Varies
- N/A
*Information is based on averages and may vary by institution or lender. It is not intended to address specific circumstances or any individual case.
Why flexibility matters
Traditional lenders are known for offering the best interest rates, but don’t like to take on applications with bad credit. Payday lenders, on the other hand, will give out bad credit loans, but they’re often very expensive, and they do nothing to improve your credit score.
Spring Financial is different from both of these lenders. They offer accessible loans that are much more affordable than payday loans, and they report your payments so you can improve your credit score by making on-time payments every month. This makes Spring a viable option for some of the best bad-credit loans.
Builds your credit
We report your payments so your score can grow
Better rates
Priced well below payday loans
How to apply with Spring Financial
Complete the online personal loan application.
It can be completed in just a few minutes and done directly on your device.
Submit verification documents.
This includes a valid ID, instant banking verification to confirm your banking information, and, if required, proof of income.
Review your offer and receive funds.
Once you’re approved, the funds are deposited directly into your bank account, as soon as the same day. However, this is subject to verification, and most loans are funded within 1-2 business days.
Who can qualify?
In order to apply, the following is required:
Government-issued photo ID
Active Canadian bank account
Current contact information
Proof of income (pay stub or equivalent) may be requested
Depending on your situation, you might also need a recent pay stub or proof of address. Everything is submitted digitally and used in the approval process and to create your repayment schedule.
Who Can Apply? (More People Than You Think)
Spring considers applicants across a wide range of credit profiles. They accept income from employment, self-employment, ODSP, Ontario Works, CPP, OAS, disability benefits, pensions, and certain EI.
A bankruptcy or consumer proposal doesn’t prevent you from applying. A co-signer isn’t required. Have you been declined before? You can reapply after 30 days if something in your financial picture has changed.
No cost to apply. No obligation to accept.
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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Learn more about bad credit loans in Ontario
Contents
What types of bad credit loans are available in Ontario?
Unsecured Personal Loans
The most common type of bad credit loan in Ontario is an unsecured personal loan. With this type of loan, no collateral is required. You agree to borrow a fixed amount over a fixed term with a fixed payment schedule and make those payments until the loan is paid in full. The term can range from 6 to 84 months, depending on your loan amount.
This type of loan is the most popular because it’s the most flexible. You aren’t required to leverage any of your assets; the payments are predictable and are typically reported to the credit bureaus, which can improve your credit score. You should double-check that the lender you’re working with reports to the credit bureaus, though.
Secured Loans
Secured loans require collateral. The most common types of secured loans are car loans and home equity loans. Because the lender can repossess the asset if you’re unable to make your payments, they’re more likely to approve you with a lower credit score and give you a lower interest rate. This makes secured loans riskier for the borrower than they are for the lender.
Payday Loans vs. Installment Loans
While payday loans and installment loans are both types of loans, they operate in very different ways. A payday loan will get you the cash you need quickly, but you will have to pay it all back with interest on your next payday. In Ontario, payday lenders can charge you $14 for every $100 borrowed, which is equivalent to a 365% APR.
With payday loans, your positive payments aren’t reported to the credit bureaus either. This means that making your payments on time won’t help your credit score. Plus, since the loans are so short-term, many people get trapped in a payday loan cycle, taking out a new loan to cover the cost of the last.
Installment loans are different. These are long-term loans that allow you to take out a fixed amount, at a fixed rate, over a fixed term. These terms can range anywhere from 6 months to 84 months, depending on the loan amount and the lender. The payments made on these loans are also reported to the credit bureaus, so you can improve your credit score.
No Credit Check Loans in Ontario
No-credit-check loans in Ontario almost always mean payday loans. The appeal is obvious — no one wants to be judged on a bad score. But skipping the credit check means the lender can’t price the loan accurately, so you end up paying more. You also get smaller amounts and zero credit reporting.
Some lenders take a different approach: a soft credit check during the application that doesn’t affect your score but allows them to offer a better rate and a realistic loan amount. That’s a better deal for the borrower.
Guaranteed Approval Loans — Do They Exist?
While many lenders will advertise a guaranteed approval, there’s actually no such thing. In Canada, every legitimate lender is required to look at your income, debts, and credit before approving a loan. “Guaranteed approval” is just a marketing phrase to get your attention and isn’t actually a policy.
While some lenders do have higher approval rates than others, there are always some applicants who aren’t approved. That’s why it’s important to be careful when you see this phrase. It’s more important to note their rates, terms, and whether they report to the credit bureaus.
What bad credit loans cost in Ontario
Interest Rates and APR
With bad credit loans in Ontario, your interest rate is based on your credit score, the amount you borrow, and the term length. Personal loan rates range from under 10% up to around 35%.
When you’re looking at the rates, though, you need to consider both the interest rate and the APR. The interest rate is what you pay on the balance, while the APR is the total annual cost, including fees. The most important rate to look at is the APR, since it shows the full picture.
Payday Loan Costs vs. Personal Loan Costs
The best way to compare a payday loan to a personal loan is the cost. Let’s take a look at what it would cost to borrow $300 for 2 weeks.
Payday loan: This will cost $42 in fees. Renew it four times, and you’ve paid $252 on a $300 loan.
Credit card at 23%: The cost is about $6.15.
Installment loan: It costs more than the credit card debt but far less than a payday loan, and you repay over months instead of all at once.
The gap is enormous. Payday loans are the most expensive consumer credit product in Ontario by a lot.
Ontario’s Cost of Credit Disclosure Act
An important thing to know about loans is that Ontario law requires every lender to give you the full cost of the loan before you sign. They should tell you the interest rates, the APR, the total you have to repay and other fees that will be included.
Not only do they have to tell you, but it all has to be in writing and provided to you before you commit to the loan. If a lender is vague about these details, it’s best to just walk away.
What Happens If You Default?
The repercussions of defaulting on a loan are determined by the type of loan you have. With unsecured loans, the lender can report the account to the credit bureaus, send it to collections, or even pursue a court judgment. Depending on your loan agreement, additional charges can be added, and the damage can stay on your credit report for up to 7 years.
In terms of a secured loan, the lender can seize the collateral that you leveraged against the loan. With a home equity loan, they can take your house. To prevent any of these scenarios, the best thing you can do is inform your lender before the due date that you’re unable to make your payment. Most will work with you rather than dealing with a default.
How to Compare Lenders
When comparing lenders, there are 5 key factors to consider. These include:
APR
Repayment terms
Credit reporting
Prepayment penalties
Customer reviews
It’s also a good idea to inquire whether there are any application fees. This won’t be the case if you’re dealing with a reputable lender.
Who qualifies for bad credit loans in Ontario?
What Do Lenders Look at Beyond Your Credit Score?
While a credit score is an important part of a loan approval, it isn’t the only factor that lenders look at. Most lenders also take into account your current income, debts, credit history, and whether or not you can handle the loan payments. Even if your credit rating falls in the bad credit range (300-579), it’s still possible to get a loan.
Second Chance Loans in Ontario
In Ontario, second-chance loans are for those who a bank, credit union, or another lender have already turned down. Due to the risk, the rates are higher. That said, as long as the lender reports to the credit bureaus, this kind of loan can be used to start rebuilding your credit. For many, the chance to change their credit history is the main benefit.
High Risk Loans in Ontario
When a borrower is considered to be high risk, it’s because they have a low credit score, a thin credit file, or a messy financial history. Lenders who lend to high-risk borrowers care more about your current income and whether you can make your payments, rather than what happened in the past. While you will pay a higher rate for this, you also get the opportunity to improve your credit score for the future.
ODSP, Ontario Works, and Government Assistance
For many lenders, income other than employment income counts towards getting a loan. This includes ODSP, Ontario Works, CPP, OAS, disability benefits, pensions and even certain Employment Insurance benefits. The amount you’re able to borrow is then based on your income and your current debt payments. This is because each application is individually assessed.
Self-Employed Borrowers
Being self-employed doesn’t disqualify you from a personal loan. However, it does add a step to the process. This is because most lenders want to see your previous year’s tax return and even bank statements. If you can prove your income, you can get a personal loan.
Bankruptcy and Consumer Proposals
Just because you have a bankruptcy or a consumer proposal on your credit report doesn’t mean that you can’t get a personal loan. In Ontario, many lenders will still review your application if you’ve been discharged from either. It’s your current situation that matters, so the only way to know for sure if you qualify is to apply.
Emergency loans in Ontario for bad credit
Same-Day Online Loans
While approval is based on verification, same-day funding is available from many different lenders in Ontario. That said, most approved applications are funded within 1 to 2 business days. Same-day funding occurs when everything lines up quickly, which is often the case with a fully digital process. Since the lender may call or text you to verify details, it’s important to keep your phone with you after you apply.
Fast Cash Loans
While many borrowers will search for “instant approval loan Ontario,” no lenders actually offer instant approval. That said, some great online lenders are quite fast. You can apply online in minutes, get a decision in a few hours, and then they’ll e-transfer the funds. Reviews can help you determine which lenders are the fastest.
How a bad credit loan can help rebuild your credit
While many people get a bad credit loan because they’re looking for money, they overlook the fact that it can also improve their credit and make them more desirable to lenders.
The reasons these loans can improve your credit are that payment history makes up around 35% of your credit score. If you get a bad credit loan with a lender that reports to both Equifax and TransUnion, then monthly payments made on time that are reported will have a positive influence on your credit score. The longer you make the payments, the more you’ll notice the impact on your score.
If you use the loan to consolidate your debt, then this can simplify your finances. You’ll no longer be carrying maxed-out credit cards or having multiple payments. You’ll just have one fixed monthly payment, which can improve your credit score and break the cycle of getting loans to cover other loan payments.
When you take out a bad credit loan, though, it’s important to make all of your payments on time. A missed payment can negatively affect your credit score. This is why it’s important to verify that you can afford the loan payments before you take out the loan.
You have questions,
we have answers.
What is the minimum credit score to get a bad credit loan in Ontario?
There is no universal minimum; every lender sets their own bar. At Spring Financial, applications are evaluated individually, and your credit score is only one factor that’s considered. Your income, banking history, and overall finances are also considered. Borrowers with scores well below 579 are approved regularly. Applying doesn’t affect your score.
How quickly are funds deposited after approval?
Funds can be sent the same day, but they are subject to verification. However, in practice, most approvals are funded within 1–2 business days. Responding quickly to any follow-up requests from the lender helps speed things up.
Will applying hurt my credit score?
The initial application is a soft inquiry and will not affect your score. A hard credit check only happens if you decide to go ahead with a loan offer, and the lender has to get your consent first.
Can I get a loan on ODSP, Ontario Works, or government assistance?
Yes. ODSP, Ontario Works, CPP, OAS, disability benefits, pensions, and certain EI all count as income. How much you can borrow depends on your situation and ability to repay the loan. Each application is assessed individually.
What’s the maximum I can borrow with bad credit?
At Spring Financial, you can borrow up to $35,000. The amount you actually get depends on income, credit, existing debt, and what you can comfortably repay. Many lenders offer much lower maximum amounts, sometimes as low as $1,500.
Can I pay off early?
At Spring Financial, you can absolutely pay off your loan early. There are no prepayment penalties, and you can also make extra payments toward your balance whenever you want. Not every lender offers this, so it’s important to check before you sign.
Do lenders report to credit bureaus?
Spring Financial reports every payment to both Equifax and TransUnion. Payday lenders generally don’t, unless you miss a payment, which is a big deal if rebuilding your credit is part of the plan. Always ask which bureaus a lender reports to before committing to financing.
Can I apply with a bankruptcy or consumer proposal?
Having a bankruptcy or consumer proposal on your record doesn’t automatically prevent you from getting a loan. Spring Financial reviews applications from people currently in or recently discharged from a consumer proposal or bankruptcy. Your overall financial situation determines your eligibility, and each application is assessed individually.
Is a co-signer required?
At Spring Financial, a co-signer isn’t required to apply or get approved. In some cases, adding one can strengthen your application, but it isn’t mandatory.
What documents do I need?
The documents you need for a loan include government-issued ID, online banking verification, and your contact information. You may also need to provide your proof of income and proof of address. Everything is submitted online, and nothing needs to be mailed or submitted in person.
What is a good credit score?
Equifax considers a good credit score to be 660 and above. If you’re in the lower credit score range of poor, which is between 300 and 579, traditional lenders won’t approve you, but alternative lenders will, including Spring Financial.
Can I get a loan if I’m self-employed?
You can get a loan if you’re self-employed, but you’ll likely need your last year’s tax return and bank statements. You just need to be able to prove your income.
What happens if I miss a payment?
If you miss a payment,t it’s reported to the credit bureaus, and you may incur extra charges, depending on your loan agreement. However, the best thing you can do is to call the lender before the missed payment. They’ll likely work with you because it’s simpler for the lender than dealing with a missed payment.
Can I reapply after being declined?
Yes, usually you can reapply within 30 days of being declined. If your income went up, your debt went down, or your situation changed in some other way, it’s worth trying again. There’s no cost to reapply.
Can a bad credit loan reduce my overall debt?
This is actually one of the better uses for a personal loan. If you’re paying interest on multiple credit cards or owe money to several lenders, consolidating into one loan at a fixed interest rate means one payment instead of many. There’s less interest overall, and you stop the cycle of borrowing from one place to pay off another.
How do regulations differ across provinces?
Ontario caps payday loan fees at $14 per $100 borrowed. Other provinces like BC, Nova Scotia, Alberta, Manitoba all have their own fees and rules. Personal loan rates and terms are based on your individual profile, not the province. That said, provincial consumer protection laws do affect what lenders can charge.
What can I use a bad credit loan for?
A bad credit loan can be used for pretty much anything. Some examples include debt consolidation, emergencies, car repairs, medical bills, home repairs, and major purchases. There are no restrictions on how you use the funds once they hit your account.
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