$5,000 loans in Canada for bad & good credit: Get a fast decision

I need $5,000 now, but I have bad credit. Where can I get a loan in Canada?

If you need $5,000 now but have bad credit, consider applying to a loan search platform like Loans Canada or LoanConnect. Unfortunately, when you have bad credit, you’re more likely to face loan rejections. Applying to a loan search platform can help you save time because you apply just once and are instantly matched with lenders who are open to approving you.

If you prefer not to apply to a loan search platform, you can apply to direct lenders who specialize in non-prime personal loans, such as Spring Financial.

Can I get a $5,000 loan if I have extremely bad credit?

Getting approved for a $5,000 loan when you have extremely bad credit is unlikely. One method subprime lenders use to limit risk is restricting loan approvals to small amounts. If your credit is extremely bad, you may only get approved for less than $1,000. To learn more about your options, read our guide to various bad credit loans.

Can I get instant approval on a $5,000 loan in Canada?

It’s difficult to get instant approval on a $5,000 loan, but it’s possible to get instant pre-approval. Lenders that provide instant decisions for $5,000 loans include easyfinancial, Spring Financial and Fig. easyfinancial and Spring work with borrowers with bad credit, while Fig only works with borrowers with good credit.

Can I get guaranteed approval on a $5,000 bad credit loan?

Be wary of lenders offering $5,000 bad credit personal loans with guaranteed approval. Legitimate lenders need to review your finances first before giving approval, especially for a $5,000 loan.

If you encounter a lender who guarantees approval, it could be a scam.

Related: Guaranteed approval loans guide

Can I get a $5,000 loan with no credit check in Canada?

Credit checks are standard for $5,000 unsecured loans in Canada, even for alternative lenders with lenient eligibility requirements. One type of loan that usually doesn’t require a credit check is a car title loan. This loan lets you use your paid-off car as collateral, and eligibility is based on your car instead of your credit history.

Dive deeper: No credit check loans in Canada

Tips to get a $5,000 loan with bad credit in Canada

It’s tough to get approved for a $5,000 loan with bad credit, but following these tips will help.

Get a secured loan

Offering collateral, such as your car, lowers the risk for lenders and increases your odds of getting approved for a $5,000 loan with bad credit.

Apply with a cosigner

Getting a friend or family member who has good credit to cosign your loan can help lower the risk for the lender. While this can increase the chance of getting approved, your cosigner will be on the hook for the loan payments if you default, and their credit score will be affected.

Only borrow what you need

It might be tempting to apply for more than you need in case unexpected expenses arise or to treat yourself to a little something extra. But the more you apply for, the stricter the approval requirements will be. Minimize your loan amount to maximize your chance of getting approved.

Get a free copy of your credit report

Every year, you can order a free credit report from Equifax or TransUnion. Customers of RBC, Borrowell, Credit Karma and Loans Canada get their scores for free. Inaccuracies can hurt your credit score, so notify the bureau right away if you notice errors.

Before you apply, pay down existing debt to improve your credit score and make repayments less burdensome. This may not be an option if you need $5,000 now, but if you can wait a few months, a higher score could land you better terms.

Compare your options

Because $5,000 loans for bad credit come with high interest rates, compare lenders to get the lowest personal loan interest rate and fees.

Check the eligibility requirements

Each lender has their own eligibility requirements for $5,000 bad credit loans, including minimum income and credit score requirements. Some lenders are more flexible than others.

Ask about fees and penalties

When researching your $5,000 loan options, look into costs besides the interest rate, such as NSF fees, late payment fees, admin fees and loan insurance.

Ensure you can afford $5,000 loan repayments

$5,000 personal loans for bad credit have loan terms from 3 - 60 months. The shorter your loan term, the less interest you’ll pay overall but the higher your payments will be. Aim for the shortest term with payments that fit within your budget.

Avoid predatory lenders

People in bad financial situations are often targeted by predatory lenders. Avoid lenders that pressure you into signing quickly and don’t clearly explain the loan terms, especially fees and your overall cost.

Where can I apply for a $5,000 loan?

Here’s where you can get $5,000 personal loans for good or bad credit.

• Online lenders

  Apply for a $5,000 loan entirely online. Online lenders typically have more flexible requirements than banks and credit unions.

  Best for: Bad credit borrowers

  Pros

  • Next-day or same-day $5,000 loans available
  • Get a $5,000 loan with bad credit
  • Some lenders offer low-rate personal loans for good credit
  • Apply from the comfort of home. No in-person visits required.

  Cons

  • High rates for bad credit loans

• Banks

  Banks offer competitive interest rates, but application and qualification requirements are harder. Your finances need to be in good shape if you want a $5,000 personal loan from a bank.

  Best for: Good credit borrowers

  Pros

  • Get low interest rates
  • Established lenders

  Cons

  • Hard to qualify for a $5,000 loan with bad credit
  • May require in-person appointments

• Credit unions

  As member-supported financial institutions, local credit unions might offer low rates.

  Best for: Good credit borrowers

  Pros

  • Favourable interest rates
  • Established lenders
  • Good customer service

  Cons

  • Membership might be required
  • Hard to qualify for a $5,000 loan with bad credit
  • May require in-person appointments

• Peer-to-peer (P2P) platforms

  Peer-to-peer platforms let you bypass traditional lenders and borrow online directly from individual investors. It often takes one to four weeks to get money as you wait for investors to fund your $5,000 loan.

  Best for: Fair or good credit borrowers

  Pros

  • Competitive rates

  Cons

  • Loan might be partially funded
  • Not suitable for bad credit borrowers. Requires a credit score above 700.

• Online loan search platforms

  With online loan search platform’s like Loans Canada and LoanConnect, you fill out one application and get connected to multiple lenders that match your financial profile.

  Best for: Good or bad credit borrowers

  Pros

  • Get a $5,000 loan with bad credit
  • Low interest loans for good credit
  • Pre-approval in minutes
  • Compare multiple offers

  Cons

  • Limited to partners within the loan search platform’s network
  • Your information is shared with third-party lenders

Types of $5,000 personal loans

Qualification requirements and terms vary based on the type of $5,000 personal loan you get.

• Secured loans

  Secured personal loans come with low rates, because you must provide collateral like your house or car. If you default on your $5,000 loan, the lender can sell the collateral to repay the loan.

• Unsecured loans

  Unsecured personal loans don’t require any collateral. They’re riskier for the lender. As a result, unsecured personal loans come with higher interest rates.

• Fixed-rate loans

  With a fixed-rate personal loan, your interest rate stays the same throughout your loan term. Financial institutions, P2P lenders and online lenders offer fixed-rate personal loans.

• Variable-rate loans

  Most variable-rate personal loans are offered by banks and credit unions. The interest rate of a variable-rate personal loan will fluctuate with the Bank of Canada rate, usually calculated as a bank’s prime rate (currently 4.95%) plus some additional incremental rate.

  If the bank’s prime rate goes up, your payment likely won’t change, but more of it goes towards interest than paying down your debt. If rates go down, more of your payment will go towards paying off debt.

$5,000 loans for good credit in Canada

Do you have good or excellent credit (above 660)? You might qualify for $5,000 personal loans with low interest rates and favourable terms.

Banks and credit unions

One advantage of getting a $5,000 personal loan from a bank or credit union is peace of mind, because you’re working with an established, reputable lender. It’s also convenient to manage your various financial accounts and products through a single, online bank portal.

Traditional lenders like banks and credit unions offer low rates for good credit borrowers. For example, FirstOntario’s interest rate starts at 6.99%.

Online loan search platforms

You can also broaden your search for the best $5,000 personal loan with online loan search platforms like Loans Canada and LoanConnect. Loan search platforms connect your financial profile to a network of lenders, making it easy to compare rates and terms from multiple providers. It’s free to apply, and you’re under no obligation to accept any offers. But keep in mind that your information will be shared with third-party lenders.

Related: Best personal loans in Canada

Credit score requirements for $5,000 loans in Canada

In Canada, credit scores range from poor (300) to good (around 660-759) to excellent (around 760-900). The credit score you need for a $5,000 loan in Canada varies between lenders. If you need $5,000 loans with bad credit in Canada, some online lenders cater to bad credit borrowers. Banks and credit unions typically look for applicants with good credit.

Compare $5,000 loans for bad credit

How much would a $5,000 loan cost?

How much does a $5,000 loan cost? That depends on factors like the interest rate, fees and loan term. Interest rates on personal loans in Canada tend to range between 6.99% and 35% with terms ranging from 3 – 60 months.

How much is a monthly payment on a 5000 loan?

Here’s a breakdown of the monthly payments for a $5,000 loan over 3 years and 5 years with 6%, 10%, 15%, 18% and 25% interest. This is just for illustrative purposes.

Interest rate	Monthly payment for 3 year loan term	Total cost after 3 years	Monthly payment for 5 year loan term	Total cost after 5 years
6%	$152.11	$5,475.95	$96.66	$5,799.84
10%	$161.34	$5,808.09	$106.24	$6,374.11
15%	$173.33	$6,239.76	$118.95	$7,136.98
18%	$180.76	$6,507.43	$126.97	$7,618.03
25%	$198.80	$7,156.77	$146.76	$8,805.40

Figure out your monthly payments using our Personal Loan Monthly Payment Calculator.

• How to use this calculator

  1. Enter $5,000 under Loan amount.
  2. Write the loan term in years (not months) under Loan terms.
  3. Enter the loan’s interest rate if there are no fees under Interest rate. Otherwise, write the annual percentage rate (APR), which includes interest and fees.
  4. Hit Calculate.
  5. Review your results.

How to apply for a $5,000 loan online

Follow these simple steps to apply for a $5,000 loan online:

1. Compare loan options. Find lenders that offer the loan type you need with rates, terms and payments you can afford.
2. Apply. After verifying that you meet the minimum requirements, apply online. Provide personal and financial details, proof of income and proof of residency.
3. Submit and wait for a decision. Some lenders offer conditional pre-approval without a credit check. To officially complete the application process, you’ll need to consent to a hard credit check. Wait to find out if your application has been accepted or denied.
4. If approved, receive your funds. Sign your loan documents and get funds by Interac e-Transfer, wire transfer or any other method your lender offers. Funds arrive the same or next business day.

How to find the best $5,000 loan in Canada

• Annual percentage rate (APR). APR is the interest rate and fees of your $5,000 loan. It gives a clearer picture of the cost than the interest rate alone, helping you compare offers.
• Loan amounts and loan terms. Most lenders offer $5,000 loans. Make sure your top choices offer the repayment amount and time period you need.
• Repayment flexibility. Many lenders let you pay off your loan ahead of schedule without penalty, but some may charge an early repayment fee to make up for lost interest revenue.
• Reputation of the lender. Check out customer reviews to learn more about Canadian lenders. Take note of any consistent records of If there’s a strong pattern of complaints, consider applying elsewhere.

Personal loan statistics

Data from the Finder: Consumer Sentiment Survey Q2 2023, shows that 20% of respondents planned to take out a personal loan within the next three months.

How much Canadians planned to borrow

While the majority of respondents (24%) planned to borrow $5,000-$9,999 within the next three months, 22% planned to borrow $10,000-$14,999, while 21% planned to borrow $1,000-$4,999.

Bottom line

In Canada, many lenders offer $5,000 loans for bad credit and good credit. The total cost of a $5,000 loan depends on your financial profile, credit history and the lender you choose. Improve your credit score to increase your chance of getting approved with favourable terms.

Frequently asked questions

• How do I get a $5,000 loan with bad credit?

  To get a $5,000 loan with bad credit, you can apply to online lenders. Online lenders have easier eligibility requirements than banks and credit unions.

• How do I get an emergency $5,000 loan with bad credit?

  To get an emergency $5,000 loan with bad credit, apply to a subprime lender who offers same-day funding, such as Spring Financial. Learn more about emergency loans.

• What income is needed for a $5,000 personal loan?

  Online lenders offering $5,000 personal loans have minimum income requirements ranging from $1,200 to $2,000 per month. Banks and credit unions might have higher minimum income requirements for $5,000 loans.