Whether you have bad or good credit, find out how much a $7,000 loan could cost you and how to get the best rate.
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Whether you’re paying for a new car, home improvements or some unexpected expense, there are plenty of reasons why you might need a $7,000 loan. Many financial institutions in Canada offer personal loans of that size including banks, credit unions and online lenders. There are also $7,000 loan options for those with bad credit. Keep reading to discover loan options, the cost of borrowing and more.
Where can I get a $7,000 loan in Canada?
You can find a $7,000 loan in Canada from banks, credit unions, online lenders and P2P platforms. Learn more about each option below.
Banks offer some of the lowest interest rates, but only to people with good to excellent credit scores. The application process is more involved than you’ll find with other types of lenders. If you want to take out a $7,000 personal loan from a bank, make sure your credit score is good or excellent and stay on top of your current loan repayments before you apply to show banks you’re a responsible borrower.
Credit unions also offer $7,000 loans, often with competitive rates. However, you may need to become a member to get a loan.
Online lenders are faster to fund loans than banks and credit unions. They tend to be your best bet if you have bad credit – or no credit at all – as they have more flexible eligibility requirements. However, online lenders have higher rates on average. To get a $7,000 loan from an online lender, you don’t need to submit as many documents, you can fill out the loan application online in just minutes, and you can usually expect to receive your loan funds either the same day or the next business day. Compare online lenders now.
Rather than funding your loan directly, peer-to-peer lending platforms connect you to everyday Canadian investors who are willing to fund your loan. The application process is similar to an online lender, but it can take 1-2 weeks to get your money since you’ll have to wait for investors to fund it. You’ll also need a credit score above 600 to apply.
Types of $7,000 personal loans
Personal loans come in a variety of forms, from unsecured loans and secured loans to cosigned loans and more. Here’s a look at the most common options to help you decide which type of $7,000 personal loan best suits your needs:
Secured loans generally come with lower interest rates than unsecured loans because they involve you putting up some asset you own, like your house or investments, as collateral. If you default on your $7,000 loan, your lender has the right to repossess the asset. Putting up collateral helps increase your chances of getting approved since there is less risk for the lender.
Unlike secured loans, unsecured loans don’t require any collateral. Instead, lenders offset the higher risk loan by charging higher interest rates. Unsecured loans are often offered by online lenders – the application and approval process is usually pretty quick, which means you could secure a $7,000 personal loan within the same day of applying.
Fixed-rate loans have an interest rate that stays the same throughout the entire loan term. The advantage to those loans is that your monthly payments stay the same so you can easily budget for your repayments. Banks, credit unions, online lenders and P2P lenders all offer fixed-rate loans.
Variable-rate personal loans have interest rates that change with the standard bank of Canada interest rate. Generally, variable rates have are advantages because they have lower starting rates than fixed. Banks and credit unions offer variable-rate personal loans.
Installment loans are a type of personal loan with more lenient eligibility requirements offered by some online lenders. Some lenders may accept non-employment income such as government benefits with no minimum credit score requirement. That makes installment loans good options for those looking to get a $7,000 loan with bad credit. Keep in mind though, that because the criteria to get approved is more flexible, you pay a higher interest rate. Learn more about the best installment loans.
With a $7,000 debt consolidation loan, you roll your existing debts — whether that’s credit card balances, bills or other loans — into one new loan with a fixed monthly repayment. The idea is that you can save money and potentially get out of debt faster because your new loan will have a better interest rate and loan term than all of your current debts. Learn more about the best debt consolidation loans.
How to get a $7,000 loan with bad credit
If your credit score is below 660, there are still $7,000 loans for bad credit available in Canada especially from online lenders that specifically work with people in these situations. Consider the following 5 steps if you need a $7,000 loan with bad credit:
1. Order a free copy of your credit report
Lenders use your credit report to evaluate your application. You can order a free copy of your full report from one of the major credit bureaus once a year. The process can take a few weeks though, so if you’re pressed for time, you can get your credit score within minutes from an online provider, like Mogo and Borrowell, who will do a soft credit check.
2. Compare your options
Because you’ll encounter higher interest rates on a $7,000 loan for bad credit, compare offers from multiple lenders so you can get the lowest possible rate for your situation. Mogo and Fairstone are examples of lenders that can give you a free quote without impacting your credit score.
3. Check that you meet the eligibility requirements
Besides looking at your credit score, lenders have various other eligibility requirements for $7,000 bad credit loans, like a minimum income threshold. While some lenders are more flexible than others, their lenient requirements come with higher interest rates.
4. Ask about fees and penalties
When researching your options, look into any extra costs beyond the loans interest rate. Fees that can drive up your loan’s costs include a late payment fee, additional NSF fee, origination fee, early repayment penalty and optional loan insurance.
5. Ensure you can manage a $7,000 loan
Make sure you can afford the repayments on a $7,000 loan with bad credit before agreeing to the loan. Falling behind on loan payments will only hurt your credit score more. Your goal is to get the shortest loan term possible so you pay less interest overall, while ensuring that the term isn’t so short that the monthly payments become too high to manage.
6. Avoid predatory lenders
People in bad financial situations are often targeted by predatory lenders. Avoid lenders that pressure you into signing and do not explain the terms of the loan clearly.
Be wary of lenders advertising $7,000 bad credit loans with guaranteed approval. A responsible lender will not guarantee approval. Instead, it’ll evaluate a borrower’s financial situation against clearly defined eligibility requirements before approving an application.
It may be possible to get a $7,000 loan with no credit check if you get a car title loan. This type of loan involves using your car as collateral. You can continue to use your car, but if you stop making loan payments, you could lose your car. Learn more about no credit check loans.
What are my $7,000 loan options if I have good credit?
If you have a good credit score of 660 or higher, you have plenty of options for $7,000 personal loans. A good place to start is with your current bank or credit union since they will be familiar with your finances. It’s also a good idea to compare offers from other banks and credit unions so you can find the lowest rate for your loan. With a good or excellent credit score you may be able to lock in an interest rate ranging from 6.99% to 15% on a personal loan.
Another way to compare your financing options is through an online loan search platform like Loans Canada or LoanConnect. With an online loan search platform, you fill out one application and get matched with lenders that want your business.
How to apply for a $7,000 personal loan
The first step to applying for a $7,000 personal loan is to shop around and compare your options. Although you already know how much you want to borrow, you’ll need to have an idea about how long you need to repay it.
Personal loans can typically be paid off over a period of 3 to 60 months. The longer the repayment term, the lower your monthly repayments will be. But you’ll also end up paying more in interest, making it more expensive overall.
When comparing options, it’s worth changing the length of the repayment term to see how it affects your monthly repayments. Make sure they will be affordable before you click through to apply.
Documents needed apply for $7,000 loans
When you’re ready to make your application, you’ll need the following details to hand:
Your name and date of birth
Your current address and address history for the past three years
Your employment details, including your salary
Your bank details
How do I qualify for a $7,000 loan?
As with any type of credit, to qualify for the best $7,000 loan interest rates you’ll need a good credit score. You’ll also need to be over the age of the majority in your province or territory (either 18 or 19 years old) and a Canadian resident.
In addition, you’ll need to demonstrate stable, full-time income and an acceptable debt-to-income ratio, which would be under 40% for traditional lenders.
How much is a $7,000 loan per month?
The table below shows some examples of how much you might pay per month on a $7,000 loan, depending on the interest rate and repayment term.
5% interest
10% interest
20% interest
1-year term
$599.25
$615.41
$648.44
2-year term
$307.10
$323.01
$356.27
3-year term
$209.80
$225.87
$260.15
4-year term
$161.21
$177.54
$213.01
5-year term
$132.10
$148.73
$185.46
6-year term
$112.73
$129.68
$167.67
7-year term
$98.94
$116.21
$155.44
Each repayment is made up of a portion of the amount borrowed (the capital), plus interest. At first, you’ll chip away at the capital relatively slowly, but by the end of the loan, each repayment will go almost entirely towards paying off the capital.
Personal loan payment calculator
Calculate the potential monthly payments on any $7,000 personal loan you’re interested in using our loan calculator below.
Personal loan monthly payment calculator
Calculate how much you could expect to pay each month on a $7,000 loan.
Write the loan term in years (not months) under Loan terms.
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.
Hit Calculate.
Review your results.
What credit score do you need to get a $7,000 loan?
To qualify for the most competitive personal loan interest rates, you’ll need an excellent credit score. If your credit score is below par, you may be offered a higher interest rate or be turned away completely.
Before applying for a loan, it’s worth using a free online service to check your credit score so that you won’t be in for any nasty surprises. If your score isn’t as good as it could be, take steps to improve it such as paying bills on time and correcting any errors on your credit report. Spacing out any credit applications by between three and six months will also help.
Could I get a cheaper loan with a guarantor?
If your credit score is preventing you from getting accepted for a personal loan of $7,000, another option to consider is a guarantor loan.
With this option, you’ll need to find a family member who is willing to step in to cover the loan repayments if you are unable to. Both you and your guarantor will be legally responsible for repaying the loan so it’s important that your guarantor understands the risks. Your guarantor will usually need to have a good credit rating and be over the age of the majority in your province or territory.
Keep in mind that while having a guarantor can increase your chances of getting approved for a loan, it also means their credit score may be damaged if you default on the loan. So make sure they fully understand the responsibility before you both sign.
What can the $7,000 loan be used for?
When applying for a loan, you’ll usually be asked to specify what you plan to use the funds for. You can use a $7,000 personal loan for a wide range of purposes, including to help pay for:
Home improvements
A wedding
A dream holiday
A new car
You can also use your loan to consolidate existing debt into one manageable, and hopefully cheaper, monthly payment.
Bottom line
In order to get low rates before applying for a $7,000 loan it helps to get your credit report in good shape and show lenders you’ll be able to repay the loan with a stable income. Even if you have bad credit, there are still loan options available to you. Compare loan products and interest rates to help you decide which lender is the best fit for you. And always remember to ask about any any extra fees before agreeing to the loan so you know exactly how much you have to repay.
Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio
Carmen Chai is a freelance writer at Finder, specializing in financial products. She is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. She has reported on personal finance, mortgages, and banking products for nearly a decade. See full bio
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