20+ bad credit loans in Canada: Find a lender

If you have bad credit, you may think loans are out of reach. That isn’t the case, though. While you may find yourself paying higher interest rates than other borrowers, if you can demonstrate you have the ability to repay a loan, there are lenders who will work with you.

Check out this guide to learn about the many bad credit loan options available to you.

Jump to:

• Personal loans (harder to get)
• Payday loans (easier to get)
• Cash advance apps (easier to get)

Compare bad credit personal loans in Canada

Borrow up to $10,000 and repay in installments.

Finder Score for personal loans

To make comparing even easier, we came up with the Finder Score. Interest rates, fees and features across 110+ personal loans are all weighted and scaled to produce a score out of 10. The higher the score the better the loan—simple.

Read the full methodology

Related: Best bad credit loans in Canada

Compare bad credit payday loans in Canada

Borrow up to $1,500 and repay in full by your next payday. This type of loan is very quick and easy to get, but it’s incredibly expensive, so it’s only suitable as a last resort.

Related: Best payday loans in Canada

Compare bad credit cash advances

Borrow less than $500 with no interest charges, but a monthly fee may apply. Repay either by your next payday or extend the due date.

Finder Score for personal loans

To make comparing even easier, we came up with the Finder Score. Interest rates, fees and features across 110+ personal loans are all weighted and scaled to produce a score out of 10. The higher the score the better the loan—simple.

Read the full methodology

Related: Cash advance apps in Canada

How do I get a loan with bad credit?

You can get a loan with bad credit by applying to an alternative lender. Banks and credit unions have strict eligibility requirements and, unfortunately, are not realistic or easy options when you have bad credit. Alternative lenders, meanwhile, place less importance on your credit score. You can apply online within minutes and get an instant decision.

1. Bad credit installment loans in Canada

Features

• Rates: 18% - 35%
• Loan amounts: $500 – $10,000
• Loan terms: 3 - 60 months
• Collateral required: Typically no
• Where to get it: Alternative lenders
• How to apply: Usually online
• Credit check required: Varies by lender, but it’s usually required
• Speed: Funding as soon as the same day

Related: Same-day loans in Canada

How to increase your chance of approval

• Apply to a loan search platform. Loan search platforms like Loans Canada and LoanConnect match you with suitable lenders based on one application.
• Show you have enough income. Demonstrate that you have enough income to repay a loan even with the debts and bills you already pay for monthly.

What to watch out for

• Steep interest rates. Alternative lenders of bad credit installment loans charge higher rates than banks because there’s a higher risk of loan defaults.
• Broker, surety or guarantor fee. Lenders of short-term installment loans under $1,000 may charge this fee, which is included in your loan repayments and can be in the hundreds.
• Scams. People who urgently need money are often targeted. If an offer is too good to be true or if you need to pay money upfront, it’s likely a scam.

2. Bad credit payday loans in Canada

Features

• Rates: $14 for every $100 borrowed, over 300% APR
• Loan amounts: $100 – $1,500
• Loan terms: Up to 62 days
• Collateral required: No
• Where to get it: Payday lender
• How to apply: Online or in person
• Credit check required: Varies by lender
• Speed: Instant approval and instant e-Transfer funding

Related: 24/7 e-Transfer loans

How to increase your chance of approval

• Demonstrate recurring income. Payday lenders will want to see that you have a steady income, even if your credit score isn’t the best.
• No NSF transactions. You’re less likely to get approved if your bank account has NSF transactions in the last 60 to 90 days.

What to watch out for

• Cycle of debt. Before taking out a payday loan, make sure you will have enough income left when you repay the loan. Otherwise, you might find yourself needing to borrow money again.
• Unlicensed lenders. Only apply to a payday lender that can show you their licence.

3. Bad credit cash advances

• Rates: No interest, but you may pay a subscription fee
• Loan amounts: $20 – $500
• Loan terms: Next pay cycle or flexible
• Collateral required: No
• Where to get it: Cash advance apps
• How to apply: Online
• Credit check required: No
• Speed: Instant for a fee, otherwise it’s a few days

How to increase your chance of approval

• Show steady income. Show that your bank account is receiving reliable income from sources like employment, government benefits or private pensions.
• Pay your bills. Your bank account should show the lender that you’re paying your bills on time.

What to watch out for

• Small loan amounts only. If you’re a first-time customer, you may get approved for small amounts only, sometimes less than $50.
• Fees. Cash advance apps advertise zero interest, but you may pay a monthly subscription fee. If you want instant funding, that could be another fee.

Other loans you can get with bad credit

• Car title loans. Use your paid-off car as collateral. You usually won’t need to go through a credit check.
• Credit card cash advances. If you have a credit card, you can get a cash advance from an ATM. Interest accrues daily from the moment you withdraw.
• Home equity loans. Using your house as collateral increases your chance of approval. However, defaulting can result in losing your home, so make sure this is a realistic and manageable loan option for you.
• Line of credit. If your financial situation is not that bad, a lender may be willing to give you a line of credit, which gives you flexible repayments. This is generally harder to get than other bad credit loans. Learn more about lines of credit for bad credit.

What can I use bad credit loans in Canada for?

Overall, there are no restrictions on how you can use bad credit loans. Once you submit your contract, your lender will deposit your funds into your account, and you can use the cash as needed.

Bad credit loans in Canada are most often used for urgent bills or expenses. Getting a loan when it’s not essential, especially if you have poor credit, is not recommended.

Signs of a legitimate lender of bad credit loans

Applying to a disreputable lender or scammer is a real risk online. To protect yourself, check out these green flags.

• The lender is licensed.
• The lender has an office address, phone number, email address, privacy policy, terms and conditions, social media profiles and customer reviews on third-party sites.
• The lender is transparent about the interest rates, fees and overall cost of the loan.
• The lender does not pressure you into signing a contract or borrowing more than you need.
• The lender does not pressure you into getting loan insurance. If you do decide to get loan insurance, you don’t make any payments upfront.
• The lender has a secure website.
• The lender is not charging you more than they’re legally allowed to. For personal loans, that’s a 35% APR. For payday loans, that’s $14 for every $100 borrowed.
• The lender does not guarantee approval. Learn more about guaranteed approval loans.

3 tips for finding the best bad credit loan for you

1. Don’t rush. Take the time to compare loan options and understand how much the loan will cost you. Don’t be pressured into quickly signing a loan contract.
2. Watch out for long loan terms. Generally, the longer the loan term, the more interest you pay on a personal loan. It’s especially costly when the loan has a steep interest rate.
3. Rebuild your credit first. If you can wait at least six months, rebuild your credit first. While it will take time and careful budgeting, improving your score means lower rates and a better chance of approval.

How to apply online

Alternative lenders offer a fast and simple application process:

1. Fill out a brief application. Connect your bank account through instant bank verification for quick approval.
2. Get a decision. Find out if you’re approved instantly or within 24 hours.
3. Review and submit your contract. Make sure you fully understand the terms and conditions, especially the interest and fees you’ll pay.
4. Get your money. Funds will be sent to you through e-Transfer or direct deposit. You can get an e-Transfer within minutes, while direct deposit can show up within several hours or the next day.

Related: Online loans in Canada

Bottom line

Bad credit isn’t the end of the line when it comes to taking out a loan. Private lenders offer options, although how much you’re able to borrow might be limited and you’ll likely face higher interest rates and fees. That said, you can get bad credit loans quickly if you’re in urgent need of funds and banks and credit unions are not a realistic option.