$2,500 installment loans for bad credit in Canada

What are the features of a $2,500 installment loan?

Installment loans from lenders you see online share these key features:

• No collateral required. You don’t need to secure your installment loan with an asset.
• Repaid in installments. Once you receive your $2,500 loan, you’ll be responsible for paying that amount back in the required timeframe. Loan payments are usually timed based on when you receive your income.
• Higher interest rates. $2,500 installment loans have higher rates than larger loans to make the interest earned worthwhile for the lender.
• Lenient eligibility criteria. It’s easier to qualify for $2,500 loans from alternative lenders than loans of the same amount from traditional lenders. Borrowers with bad credit below 560 can apply.

Do banks and credit unions offer $2,500 installment loans for bad credit?

Banks and credit unions in Canada offer personal loans with loan amounts that typically start at $3,000 to $5,000, but there are some exceptions, such as BMO, which starts at $2,000, and BC credit union Vancity, which starts at $100.

That said, banks and credit unions have stricter eligibility requirements overall, so you may have a harder time getting approved if you have bad credit.

How to get a $2,500 loan with bad credit in Canada

Online lenders are the primary source of installment loans for bad credit. To help you find the best bad credit installment loan to suit your needs, follow these steps:

1. Check your credit. Check your credit score so you have a good read on how you’ll appear to direct lenders. Canadian providers of free credit score monitoring include Nyble, Borrowell, Credit Karma, Loans Canada’s CompareHub and major banks.
2. Compare direct lenders and check eligibility requirements. Focus on lenders with a minimum credit score requirement that’s lower than your score. Compare your shortlist of options using factors like loan amounts, terms, interest rates and fees.
3. Apply to your top choice. Try to apply to your number one choice only because multiple personal loan applications, especially when you have bad credit, can suggest to a lender that you’re looking to get more than one loan.
4. Get a decision. The lender will verify your income and identity as well as review your credit report. From there, they will make a decision.
5. Get your loan. Sign your loan agreement if you’re happy with it and receive your $2,500 via direct deposit or e-Transfer on the same day or next day.

Must read: Best bad credit loans in Canada

Can you get a $2,500 personal loan with no credit check?

It may be difficult to get a $2,500 loan with no credit check unless you secure your loan with collateral, such as your car, which is known as a car title loan. Unsecured no credit check loans typically max out at $1,500.

Dive deeper: No credit check loans in Canada

Questions to ask yourself when looking for $2,500 installment loans for bad credit

What is the APR?

While searching for $2,500 personal loans, you’ll see lenders using the terms “interest rate” and/or “APR,” which stands for annual percentage rate. Zero in on the APR, which will show you the true cost of your loan, because it includes the interest rate plus other fees you need to pay. Sometimes a loan doesn’t have other fees. In this case, the APR is the same as the annual interest rate. Compare personal loan rates in Canada.

How long is the loan term?

You’ll need to figure out how long you want to take your loan out for and find lenders that can accommodate your needs. Ultimately, a longer loan term will make your monthly payments cheaper, but you’ll end up paying far more interest over the life of the $2,500 loan, especially if the interest rate you’ve secured is high because of bad credit. A shorter term will have higher monthly payments but will cost you less.

Are there other fees?

Consider any extra fees like admin fees (fee to process your loan), late payment fees, NSF fees and any other charges.

How fast can I get a $2,500 personal loan?

Make sure the lender you apply with can get your loan amount to you when you need it. You can get a bad credit installment loan as soon as the same day if you apply online. Learn more about same-day loans.

What is the monthly payment of a $2,500 loan?

The monthly payment and cost of a $2,500 personal loan will vary greatly, depending on the interest rate you secure, how long you may take to repay the loan and if there are any additional fees you need to account for.

Here’s an example of how much a $2,500 installment loan may be, with different APRs and loan terms at play.

6-month loan term

	12.99%	19.99%	29.99%
Monthly payment	$432.59	$441.29	$453.86
Total interest paid	$95.57	$147.77	$223.17
Total cost	$2,595.57	$2,647.77	$2,723.17

3-year loan term

	12.99%	19.99%	29.99%
Monthly payment	$84.22	$92.90	$106.12
Total interest paid	$532.02	$844.26	$1,320.15
Total cost	$3,032.02	$3,344.26	$3,820.15

As you can see, you’ll pay less overall if you get the shortest loan term and lowest APR. How long it takes you to repay the loan matters. A $2,500 loan with a loan term of 6 months and a higher APR of 19.99% or 29.99% will cost less than a $2,500 loan with a loan term of 3 years and a lower APR of 12.99%.

Once you have an idea of the APR you’re eligible for, aim for the shortest loan term possible with monthly payments you can still manage.

What are the eligibility requirements?

You’ll usually need to meet the following criteria to qualify for an installment loan:

• Be of the age of majority in your province or territory. Depending on where you live, you’ll need to be 18 or 19 years old to apply, with a government ID to verify your age.
• Be a Canadian citizen or resident. You may have to prove your citizenship or residency with a Canadian passport or other form of identification.
• Have proof of a steady source of income. You’ll usually need to show pay stubs, bank statements or employment records to prove that you can pay back your loan on time.
• Have a working bank account. You’ll have to submit your bank account details to organize payment (and ensure repayment of your loan).
• Submit to a credit check. You’ll usually need to prove that you have an acceptable credit score, which varies among lenders.

Bottom line

Installment loans are a worthwhile option if you’re looking for a smaller financing amounts, like a $2,500 loan, to pay one-off expenses. Overall, however, they usually come with higher interest rates, smaller loan amounts and shorter terms than traditional personal loans.

Dive deeper: Have time? Compare 35+ personal loans

Frequently asked questions

• How do I get a $2,500 loan ASAP in Canada?

  The fastest way to get a $2,500 loan is by applying to an online lender that specializes in quick approval and funding for emergencies. Learn more about emergency loans.

• What are some direct lenders of $2,500 loans online?

  Direct lenders of $2,500 loans that operate online include Spring Financial, easyfinancial and Vancity.

• Can I get a guaranteed $2,500 loan?

  A $2,500 loan is easier to get approved for than larger loans, but it is still not guaranteed. The lender will still need to review your finances. Check out our guide to guaranteed approval loans to learn more.

• What if I need to borrow more than $2,500?

  It may be difficult to get a loan for more than $2,500 if you have bad credit unless you agree to provide collateral or accept high interest rates. Check out our guides on getting a $5,000 or $10,000 loan to learn more.

• Can I get a $2,500 payday loan?

  No, you won't be able to get a $2,500 payday loan in Canada. That's because payday loans are regulated at either the provincial or federal level across Canada so that they cannot legally exceed $1,500. If you need to get a $2,500 loan ASAP, you'll have to look into installment loan lenders.