Looking for a personal loan but struggling to get approved by banks? Private lenders in Canada offer flexible borrowing options, often with faster approvals and fewer restrictions. The downside is higher rates.
Below, we compare the best private lenders, their pros and cons, plus alternatives to help you find the right fit.
Spring Financial: Private lender with fast funding
Spring Financial offers quick and easy access to personal loans, making it a solid choice for borrowers who need fast funding. The application process is fully online, with pre-approval available in minutes. While it's a convenient option for those with less-than-perfect credit, interest rates can be higher than traditional bank loans.
Fast funding
Online application
Accessible to borrowers with bad credit
High rates for bad credit
You may be offered a credit builder loan (The Foundation loan) instead of a personal loan
SkyCap is known for its excellent customer service, providing optional personalized support throughout the borrowing process. It offers flexible loan terms and quick approvals, making it a strong choice for those looking for a reliable private lender. However, interest rates may be higher than those of traditional lenders.
Strong customer support
Open to applicants no matter your credit history
Quick funding directly to your bank account
High interest rates (up to 34.99% APR) compared to traditional bank loans
Fig offers competitive interest rates starting at 8.99%, depending on your credit score. The lender provides a straightforward online application process, making it easy to access funds. However, since it's designed for those with good credit, approval can be challenging for applicants with lower scores.
Competitive rates
Get an offer without impacting your credit score
Easy online application
May require strong income verification
Fair or bad credit may not qualify
Loan amount
$2,000 – $35,000
APR
8.99% – 29.49%
Term
24 - 60 months
Min. credit score
700
Fees
NSF fee: $45
Turnaround time
Up to 5 business days
goPeer: Peer-to-peer personal loans for good credit
goPeer connects borrowers with individual investors, offering competitive rates for those with good credit. This peer-to-peer lending model can result in lower interest rates than traditional private lenders. goPeer advertises a quick approval process within 24 to 48 hours.
Competitive interest rates
Quick approval process
No impact on credit score for pre-qualification
Potentially high rates for low credit
Origination fee depending on how much you borrow
Loan amount
$1,000 – $35,000
APR
8.99% – 34.99%
Term
36 or 60 months
Min. credit score
700
Fees
Variable origination fee (included in APR) Unsuccessful payment fee of $50 No application or prepayment fees
Turnaround time
Response within 24 hours
Easyfinancial: Secured and unsecured bad credit loans
Easyfinancial provides both secured and unsecured loan options, making it easier for borrowers with bad credit to qualify. The lender offers fast approvals and a straightforward application process. However, unsecured loan rates can be high, and secured loans are subject to additional fees in addition to collateral.
Options for bad credit borrowers
Quick approvals
Borrow up to $100,000
Interest rates can be high
Secured loans are subject to additional fees
Loan amount
$500 – $100,000
APR
9.99% – 35%
Term
9 - 240 months
Min. credit score
300
Fees
you may come across non-sufficient funds fees, late payment fees, missed payment fees or admin fees
Turnaround time
Approval within 30 minutes
Magical Credit: Private lender with lenient income requirements
Magical Credit stands out for its flexible income requirements, making it a great option for self-employed individuals or those with non-traditional income sources. The application process is simple, and approvals are fast. However, loan amounts are typically smaller, and interest rates can be steep.
Accepts various income sources
Quick approvals
Simple application process
High interest rates
Lower loan amounts compared to other lenders
Loan amount
$1,500 – $20,000
APR
19.99% – 35%
Term
12 - 60 months
Min. credit score
300
Fees
A single administration fee of $194
Origination fee
$194
Turnaround time
Receive funds within as little as 24 hours
Alternatives to private personal loans in Canada
Loans Canada: Loan search platform with a large lender network
Loans Canada is a comprehensive loan comparison platform that connects borrowers with a vast network of lenders across the country. In addition to private loans, the platform provides access to various lending options, including personal loans, bad credit loans, and secured financing. The platform allows users to compare multiple offers in one place. However, approval and interest rates depend on the chosen lender.
LoanConnect specializes in helping Canadians find loans regardless of their credit score. The platform provides pre-approvals within 60 seconds for loans up to $60,000. It's a great choice for those with poor or fair credit who may struggle to find financing elsewhere. However, borrowers should carefully review lender terms, as interest rates can be high for those with lower credit scores.
KOHO offers a flexible cash advance feature that allows users to access small amounts of money without a credit check. This makes it an excellent option for those who need quick cash without impacting their credit score. The advance is repaid automatically from the user's KOHO account, making the process seamless. However, the loan amount of up to $250 is low compared to other lending options on the market.
No credit check
Fast access to cash
No interest
Limited loan amounts
May require a subscription for higher limits
Loan amount
Up to $250
APR
Starting at 0%
Term
Flexible
Fees
0% interest with a subscription fee starting at $2/month
Turnaround time
Immediately
What are direct private lenders for personal loans in Canada?
Direct private lenders for personal loans approve and fund loans themselves. They mostly operate online and aren’t affiliated with a major financial institution, such as a bank or credit union.
Applying online to a direct private lender is a good option if any of the following applies to you:
Banks or credit unions cannot approve you.
You need rapid approval and funding.
You’d prefer not to apply to a broker to avoid sharing your details to multiple third-party lenders.
The differences between bank loans and private loans in Canada
Bank loans
Private loans
Pros
Competitive interest rates
Regulated by the Office of the Superintendent of Financial Institutions (OSFI)
Well-known, well-established lenders
Fast approval and funding
Easier eligibility requirements
Completely online
Cons
May require a visit to the branch for an interview
Overall slower approval and funding
Stricter requirements
Generally higher rates
Some disreputable lenders operate in this space
How much do private lenders charge for personal loans?
The annual percentage rate (APR) for private lender loans typically fall between 6.99% and 35%. The rate you’ll get depends on factors like your credit score and debt-to-income ratio.
Low interest loans will be offered to applicants with good to excellent credit (660+) and a DTI under 40%.
Other costs that may come with private personal loans in Canada include origination fees (administrative payment for setting up the loan), late payment fees and NSF fees. Direct private lenders differ in what fees they charge, so check the terms of any loan before applying so you know what to expect.
Pros and cons of private lenders of personal loans
Pros
More options. Private online lenders are competing for your business in a space once dominated by Big Banks. Compare many lenders to find one that works for you.
Higher approval rate. Banks tend to have stricter approval criteria than private lenders, some of which even offer loans for people with poor credit.
Fast and easy to apply. You can usually apply online for private loans in Canada. If approved, you’ll typically get funds in 24-48 hours.
Flexible repayments. You can typically repay private loans in Canada online from any bank account, and you may even be able to choose between weekly, biweekly, semi-monthly or monthly repayments.
What to watch out for
High rates (depending on your credit). You may be stuck with a high interest rate, especially if you have bad credit.
Stay away from loan sharks. Some lenders use aggressive sales tactics to prey on borrowers who can’t get approved anywhere else. Never let anyone pressure you into getting a loan.
Other options may be better. A personal loan will increase your debt and saddle you with payments. Consider other ways to reduce costs and manage debt like debt consolidation loans, credit card balance transfers and credit counselling.
Below is an example of how much a $5,000 loan from a direct private lender may cost in monthly payments.
APR
Loan term
Monthly payment
Total loan cost
9.90%
1 year
$439.35
$5,272.16 ($272.16 total interest)
9.90%
3 years
$161.10
$5,799.65 ($799.65 total interest)
16.99%
1 year
$456.00
$5,472.00 ($472.00 total interest)
16.99%
3 years
$178.24
$6,416.60 ($1,416.60 total interest)
Eligibility requirements of private loans
Exact requirements will vary between direct private lenders, but generally you’ll need to meet the following requirements:
Be at least the age of majority in your province or territory (18 or 19 years old)
Be a Canadian citizen or a permanent resident
Have a valid Canadian address
Have a steady income
Meet credit score and income requirements
Documents
To apply for private lender loans, you’ll usually need to provide the following documents:
Valid government-issued ID. Driver’s licence, passport or permanent resident card.
Proof of income. Pay stubs, bank statements or your most recent Notice of Assessment.
Proof of residency. Utility bill, bank statement or credit card statement with your name and address.
Keep in mind, if the direct lender offers instant bank verification, you’ll send little to no documents.
How to compare private lenders in Canada
With many options online, how do you narrow down your choices? Consider the following features:
Loan amounts
Check the lender’s minimum and maximum lending amounts. Some private lenders in Canada offer loans as high as $50,000 or as low as $500, while others don’t go over $15,000 or under $1,000.
Loan terms
These vary among lenders. Minimum repayment terms can fall anywhere from around 6 months to 2 years. Maximum repayment terms can go as high as 5 years or more. A longer term may mean lower payments, but you’ll pay more interest over the life of the loan.
Interest rates
Keep an eye on the annual percentage rate (APR), which reflects the annual cost of the loan. Most private lenders offer fixed APRs that stay the same throughout the loan term. Learn more about personal loan rates.
Eligibility requirements
Like banks, private loan providers have minimum credit score and income requirements, while others are more flexible, evaluating applicants on a case-by-case basis. Keep in mind that lenient eligibility requirements tend to come with high interest rates.
Repayments
You may be able to choose between weekly, biweekly or monthly repayments, although some lenders don’t offer a choice. You may also be able to change the payment schedule, while others may be more restrictive.
Fees
NSF fees are common among direct private lenders, while origination fees (administrative fee to process your loan) and early repayment fees are less common. Before signing, make sure you understand the total cost of your loan, not just the interest rate.
Reputation and customer service
Check out real customer reviews before deciding on a private lender. Steer clear of private lenders that pressure you into signing, avoid clearly explaining the terms of your loan or that push you to get loan insurance. Loan insurance adds to the cost of your loan and should be optional.
Speed
Some direct private lenders of personal loans give approval and funding on the same day or the next morning at the latest, while others may take longer. If your need is urgent, learn more about emergency loans in Canada.
Can I get a private personal loan with bad credit?
There are private bad credit personal loans in Canada, but be prepared to pay a high interest rate. Bad credit borrowers are charged higher rates to offset the risk that they’ll default on the loan. The following tips may help you get approved if you have poor credit:
Get a secured personal loan. A secured personal loan requires collateral like your car or home to reduce the lender’s risk. Make sure you can afford repayments. If not, the lender can seize your asset.
Get pre-approved. Some direct private lenders like Mogo and Fairstone offer loan preapproval and a quote within minutes — without impacting your credit score. A full credit pull is typically required afterwards to complete your application.
Rebuild your credit before applying. Pay your bills on time and try to reduce your debt before applying for a loan. Doing this will boost your credit score and show lenders that you’re a responsible borrower.
Summary: Who should get private personal loans in Canada?
Consider getting a private lender loan if:
You’re struggling to get approved. Private lenders often have more lenient eligibility criteria than banks and credit unions, so you might get approved more easily.
You need fast, flexible funds. Private loans in Canada are typically disbursed in 24-48 hours and often come with a variety of repayment terms.
You have a low credit score. Some private lenders offer loans for people with less-than-perfect credit, although you may get a high interest rate.
You can manage the repayments. If you can’t afford your repayments, steer clear of private loans even if you meet the eligibility requirements.
Bottom line
Private loans in Canada are a good alternative to bank loans, especially if you have a hard time getting approval, need funds fast or want flexible repayment terms. However, private loans often come with high interest rates, so it’s important to compare lenders and fully understand the costs before committing.
Frequently asked questions about private lender loans
Private lender loans can usually be used for anything. You can use it to consolidate debt, buy a car, fund an education, pay for a major expense and more.
Private loans in Canada are safe as long as you apply to a legitimate direct lender. To determine whether a private lender of personal loans is legitimate, look for a business registration, office address, email address and phone number, and check for its presence on sites like the Better Business Bureau and Trustpilot.
Not necessarily. Private lender loans are generally faster and easier to get than bank loans, but in exchange you may be offered higher interest rates.
Gabriel Vito is a freelance personal finance writer for Finder. With over four years of experience, he has crafted helpful guides and articles covering various personal finance topics, including credit cards, investing and banking. Gabriel's work has been featured on Yahoo Finance, NASDAQ, GoBankingRates, and more. He has a Bachelor's Degree in English and is passionate about helping others navigate their financial journey. See full bio
Stacie Hurst is an editor at Finder, specializing in loans, banking, investing and money transfers. She has a Bachelor of Arts in Psychology and Writing, and she has completed FP Canada Institute's Financial Management Course. Before working in the publishing industry, Stacie completed one year of law school in the United States. When not working, she can usually be found watching K-dramas or playing games with her friends and family. See full bio
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