{"id":1494,"date":"2025-06-17T20:59:55","date_gmt":"2025-06-17T20:59:55","guid":{"rendered":"https:\/\/wp.springfinancial.ca\/?p=1494"},"modified":"2025-12-12T18:46:43","modified_gmt":"2025-12-12T18:46:43","slug":"best-lines-of-credit-in-canada","status":"publish","type":"post","link":"https:\/\/springfinancial.ca\/fr\/blog\/credit-tips\/best-lines-of-credit-in-canada\/","title":{"rendered":"Best Lines of Credit in Canada in 2025"},"content":{"rendered":"\r\n

The type of credit you choose will depend on what you need the money for and how much you\u2019re looking for. If you\u2019re looking for a large sum you can\u2019t pay back immediately, then an unsecured personal line of credit or loan is a good option.\u00a0<\/p>\r\n\r\n\r\n\r\n

If you\u2019re looking for a more flexible way to borrow money, then a line of credit is the way to go. That said, you do have to do some research and find the right line of credit for you. There are plenty of great options available out there\u2014some of them with better interest rates than others.\u00a0<\/p>\r\n\r\n\r\n\r\n

Lines of Credit and How They Work\u00a0<\/h2>\r\n\r\n\r\n\r\n

Lines of credit<\/a> are a great way to access funds in a flexible way. The easiest way to describe a line of credit is that it\u2019s almost like a combination of a personal loan and a credit card. It\u2019s a form of revolving credit that you can access as long as you have a room available. You have access to potentially lower interest rates like you would with a personal loan, but you can use the line of credit repeatedly.\u00a0<\/p>\r\n\r\n\r\n\r\n

With lines of credit, while you have a credit limit, using only 30% to 35% of it is ideal. While you can use more, this can have a negative impact on your credit score. The lower you\u2019re able to keep the balance, the better off you are.\u00a0<\/p>\r\n\r\n\r\n\r\n

Minimum Payments on Lines of Credit<\/h2>\r\n\r\n\r\n\r\n

One upside to a line of credit is that the minimum payments are extremely low and often consist of just the interest payments. Because of that, though, you aren\u2019t actually paying down the balance at all. You are, however, able to make lump sum principal payments whenever you like directly from your bank account. That said, the higher your balance, the more your credit falls.\u00a0<\/p>\r\n\r\n\r\n\r\n

To figure out how much you owe, you should be receiving an updated balance statement every month. You should also be able to check the balance through your online banking platform.\u00a0<\/p>\r\n\r\n\r\n\r\n

Different Kinds of Lines of Credit<\/h2>\r\n\r\n\r\n\r\n

Essentially, there are three different types of lines of credit: Secured Lines of Credit, Unsecured Lines of Credit and Student Lines of Credit.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n

Secured LOCs<\/h3>\r\n\r\n\r\n\r\n

Secured lines of credit are when you have an asset tied to the loan, such as a car or a house. This means if you default on the line of credit payments, your asset can be seized. The most common example of this is a HELOC, also known as a Home Equity Line of Credit. This is when you borrow from the equity in your home in the form of a line of credit. These forms of lines of credit have lower interest rates. However, they are riskier because an asset is attached. That said, because there is an asset attached, they\u2019re the easiest form of line of credit to get approved for.\u00a0<\/p>\r\n\r\n\r\n\r\n

Unsecured LOCs<\/h3>\r\n\r\n\r\n\r\n

Unsecured lines of credit have slightly higher interest rates, but you don\u2019t risk losing an asset if you default on the payments. That said, they are harder to get, and you do need to have a decent interest rate to get approval, especially if you\u2019re looking for a large sum of money.\u00a0<\/p>\r\n\r\n\r\n\r\n

Student LOCs<\/h3>\r\n\r\n\r\n\r\n

Student lines of credit have lower interest rates than a traditional line of credit. They\u2019re meant for students taking post-secondary education to help with tuition and other related expenses. With these types of lines of credit, you\u2019re only required to pay interest on the outstanding balance until you\u2019ve completed school. Once you\u2019ve completed school, there\u2019s a 6-12 month grace period before you need to start paying interest and the principal.\u00a0<\/p>\r\n\r\n\r\n\r\n

Interest Rates on Lines of Credit in Canada<\/h2>\r\n\r\n\r\n\r\n

Since prime rates have been steadily increasing in 2023, line of credit interest rates have risen a bit. The average rate sits between 8%-10%. Those with secured personal lines of credit can get lower rates of 6%-7%, and unsecured lines of credit are usually closer to 10%. That said, rates have started decreasing in 2024, so these rates could start to drop below 8%.\u00a0<\/p>\r\n\r\n\r\n\r\n

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Best Bank Line of Credits 2025<\/h2>\r\n\r\n\r\n\r\n

If you\u2019ve decided to get a line of credit, you don\u2019t have to get it with your primary financial institution unless it\u2019s the best rate. There are plenty of other financial institutions that offer lines of credit with great rates. Here are some of Canada\u2019s major banks and their line of credit options.\u00a0<\/p>\r\n\r\n\r\n\r\n

Tangerine<\/h3>\r\n\r\n\r\n\r\n

Tangerine<\/a> is an online financial institution that offers some great rates on lines of credit. Like other lines of credit, the interest rates are variable, so it\u2019s difficult to determine what the exact rate will be throughout the term. That said, Tangerine’s prime rate is 4.95%, and with their unsecured line of credit advertised as 2% plus prime, the starting rate right now would be 6.95%. The rates for a HELOC as of now are 5.45%, but they will fluctuate.\u00a0<\/p>\r\n\r\n\r\n\r\n

As a bonus, there are no annual fees with Tangerine accounts, so all you pay is the interest and the principal. Due to the fact that Tangerine is strictly online, you don\u2019t have to go into a branch to get a line of credit. You can apply online and start using the funds as soon as the approval goes through. They offer flexible repayment options and 24\/7 access to the funds.\u00a0<\/p>\r\n\r\n\r\n\r\n

Royal Bank of Canada<\/h3>\r\n\r\n\r\n\r\n

RBC<\/a> is another financial institution that offers competitive rates on lines of credit. Some key features that they offer with their Royal Credit Line are:<\/p>\r\n\r\n\r\n\r\n