Small Personal Loans for April 2024

Get a small personal loan at one of the lenders verified by our specialists. On 23.04.2024 there are 2 options available to you. Increase your chances of getting a loan — fill out an application with a free credit rating check.
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Updated
04.04.2024
17:07
Best Quick Loan Today 23.04.2024*
Mr. Payday
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Rating by Finanso®
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The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
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300
650
1000
up to $10.000
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Coast Capital Savings
Personal Loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
$500-$50,000
Rate
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Effective interest rate on the product

7.5%
Term
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Loan term for the financial product

60 months
Reviews
Royal Bank of Canada
4.6
I appreciate the transparency in the loan terms provided by Royal Bank of Canada, with no hidden fees or charges.
Review
Royal Bank of Canada
4.4
RBC provided me with a flexible loan repayment schedule, making it easier to manage.
Review
Royal Bank of Canada
2.4
I encountered some hidden fees when repaying the loan with RBC, making it more expensive than I expected.
Review
Royal Bank of Canada
2
Unfortunately, the loan terms offered to me by RBC turned out to be less favorable than those of other banks.
Review
Royal Bank of Canada
4.2
It's very convenient to use RBC's online services to manage my loan and make monthly payments.
Review
Royal Bank of Canada
4.2
I obtained my home loan with RBC, and they were very flexible in setting terms that suited my financial capabilities.
Review

What is a Small Personal Loan?

A small personal loan is a financial tool designed to provide individuals with relatively modest sums of money, typically less than $5000, to address immediate or emergency financial needs. Unlike secured personal loan options that require collateral, most small loans fall into the category of unsecured loans or personal loans, meaning they do not necessitate any form of collateral and are approved based on the borrower's credit score. These loans play a crucial role in assisting individuals facing unexpected expenses, enabling them to navigate through challenging financial situations with access to quick funds.

Small personal loans in Canada are often accessible through various financial institutions, including banks, credit unions, and online lenders. The approval process is streamlined, allowing potential borrowers to apply online conveniently and, in some cases, receive the loan amount directly into their bank account without the need for a physical branch visit. The interest rates for these loans can vary widely based on the applicant's creditworthiness and the lender's policies, making it essential for borrowers to carefully consider the annual percentage rate (APR) to ensure manageable personal loan payments.

Features

  1. Loan Amounts. Typically starting at $100, small personal loans offer flexibility for borrowers requiring modest sums to address immediate expenses.

  2. Loan Terms. With durations often starting at three months, these loans provide short repayment timelines, allowing borrowers to quickly resolve financial challenges.

  3. Interest Rate. Ranging from 18%, the interest rates for small personal loans may vary based on factors such as credit score and lender policies.

  4. Accessibility. Easily obtainable from online lenders and some credit unions, small personal loans offer a convenient application process, allowing borrowers to apply from the comfort of their homes.

  5. Verification Process. The application process often involves providing personal details, contact information, proof of income, and sometimes online bank account verification for expedited processing.

Pros and Cons

Pros

Quick Access to Funds. Small personal loans offer rapid approval and funding, making them an ideal choice for individuals facing urgent financial needs.

Flexible Usage. Borrowers can use these loans for various purposes, including medical expenses, vehicle repairs, emergency home repairs, and day-to-day bills, providing versatility in addressing immediate financial concerns.

Convenient Application. The online application process for small personal loans is user-friendly, allowing borrowers to apply from the comfort of their homes without the need for physical branch visits.

Cons

Higher Interest Rates. Small personal loans often come with relatively higher interest rates compared to longer-term or secured loans. Borrowers with lower credit scores may face even higher rates due to perceived higher risk.

Short Repayment Period. The short-term nature of these loans, while advantageous for immediate financial needs, can lead to higher monthly payments, potentially straining the borrower's budget.

Prepayment Penalties. Some private lenders may impose prepayment penalties, adding extra fees if borrowers decide to pay off the loan early. A careful review of terms and conditions is crucial to understanding potential costs.

How to Get a Small Personal Loan

Apply for a Loan

  1. Assess Your Financial Needs. Before applying for a small personal loan, evaluate your financial requirements. Determine the amount needed and how it will be used to address specific expenses.

  2. Check Your Credit Score. Understand your creditworthiness by checking your credit score. While some lenders offer options for bad credit, a good credit score can enhance your chances of securing a loan with more favorable terms.

  3. Research Lenders. Explore various lending options, including banks, credit unions, and online lenders. Consider factors such as interest rates, loan terms, and customer reviews to choose a reputable lender.

  4. Gather Required Documents. Prepare essential documentation, including proof of identity, proof of Canadian residency, proof of income, and details about your bank account. Some lenders may also require information on existing debts.

  5. Apply Online or In Person. Many lenders offer the convenience of applying online. Fill out the application form with accurate and complete information. Ensure that you provide details about the purpose of the loan.

  6. Verification Process. Lenders may verify your identity, income, and credit history during the application process. Some may use online bank account verification for faster processing.

  7. Review Loan Terms. Carefully review the terms and conditions of the loan, including interest rates, repayment schedule, and any additional fees. Ensure that you fully understand the commitment you are making.

  8. Approval and Funding. Upon approval, the lender will provide details about the approved loan amount and funding process. In many cases, funds can be deposited directly into your bank account.

Requirements

  1. Permanent Canadian Address. Borrowers typically need to provide proof of a permanent Canadian address to establish residency.

  2. Photo ID. Lenders may require a valid photo ID, such as a driver's license or passport, for identity verification.

  3. Regular Income. Proof of a steady income source is crucial for loan approval. This may include pay stubs, bank statements, or other documentation verifying consistent earnings.

  4. Bank Account. A valid and active bank account is often a prerequisite for small personal loans. This account is where the loan funds will be deposited, and it may also facilitate automatic loan repayments.

  5. Credit Score. While some lenders cater to individuals with lower credit scores, a minimum credit score requirement is common. A credit score of 600 or more is often sought, but exceptions may exist for specific lenders.

  6. Eligibility Criteria. Lenders may set additional eligibility criteria related to existing debt payments, income level, and other financial factors. Meeting these criteria increases the likelihood of loan approval.

Conditions

  1. Loan Amounts. Lenders specify the minimum and maximum loan amounts they are willing to provide. Small personal loans typically start at around $100 and may go up to a maximum of $5000.

  2. Interest Rates. The interest rates for small personal loans can vary based on the borrower's creditworthiness and the lender's policies. Rates may start from 18%, and borrowers with excellent credit scores may secure lower rates.

  3. Loan Terms. Lenders determine the duration of the loan, often ranging from three months to a year. Shorter terms may result in higher monthly payments but lower overall interest costs.

  4. Fees. Borrowers should be aware of any associated fees, such as origination fees or application fees. Additionally, some lenders may charge late payment fees for missed deadlines.

  5. Repayment Schedule. The repayment schedule outlines when and how payments are to be made. Borrowers should review this carefully to understand the monthly payment amounts and due dates.

  6. Prepayment Penalties. Some lenders may impose prepayment penalties if borrowers decide to pay off the loan early. This involves additional fees, and borrowers should be aware of these conditions before committing to a loan.

  7. Specialized Loans for Bad Credit. Certain lenders specialize in offering loans to individuals with bad credit. These loans may come with higher interest rates to offset the perceived risk.

Best Places to Get a Small Personal Loan

  1. Spring Financial stands out as a top choice for small loans with an APR ranging from 9.99% to 46.96%. With a loan amount flexibility spanning from $500 to $35,000 and terms ranging from 6 to 60 months, borrowers can tailor their loans to meet specific needs. What sets Spring Financial apart is its swiftness — a simple online application can lead to pre-approval on the same day, and funds can be received as quickly as within the same day. The eligibility requirements are accessible, requiring a minimum income of $1,800 per month and a tenure of at least 3 months in employment.

  2. Mogo offers a seamless and efficient process for small loans, boasting an APR of 9.90% to 46.96%. With loan amounts ranging from $200 to $35,000 and terms extending from 6 to 60 months, Mogo provides flexibility tailored to borrowers' financial needs. What makes Mogo noteworthy is its commitment to customer-friendly practices. A free quote is accessible within three minutes, and the process does not impact credit scores. Additionally, Mogo distinguishes itself by offering a trial period, allowing borrowers to return the borrowed amount within 100 days and receive a refund of paid interest and fees, a rare feature in the lending landscape.

  3. Fairstone has positioned itself as a reliable choice for small loans, featuring an APR range of 19.99% to 39.99%. The loan amounts, ranging from $500 to $50,000, and terms from 6 to 120 months, provide borrowers with a wide spectrum of options. What sets Fairstone apart is its established presence in the financial landscape since 1923, backed by over 230 branches across Canada and ownership by a Schedule 1 bank. The speed of service is commendable, offering quotes within minutes without affecting credit scores and providing unsecured loans within 24 to 48 hours. Fairstone's flexible options cater to diverse borrowing needs.

  4. Easyfinancial stands out as a robust option for small loans with an APR ranging from 9.99% to 46.96%. With loan amounts stretching from $500 to an impressive $100,000 and terms spanning from 9 to 120 months, easyfinancial accommodates a broad range of financial requirements. Its established presence over 30 years, boasting over 400 branches across Canada, adds a layer of reliability. Quick approvals, as fast as 10 minutes, and same-day fund disbursement contribute to easyfinancial's appeal. The flexibility extends to the application process, available both online and in person, with an additional incentive of a 2% rate reduction when applying with a co-borrower.

Things to Pay Attention to

  1. Fees and Additional Costs. Be aware of any fees associated with the loan, such as origination fees, application fees, and late payment fees. Understanding the complete cost structure helps avoid unexpected expenses.

  2. Repayment Terms. Carefully review the repayment schedule and terms. Check for any prepayment penalties and assess whether the loan terms align with your financial capabilities.

  3. Loan Amount and Purpose. Determine the minimum and maximum loan amounts offered by the lender. Additionally, understand any restrictions on how the funds can be used to ensure they align with your intended purpose.

  4. Credit Score Impact. Inquire about the potential impact on your credit score. Timely payments can positively affect your credit history, while missed payments may have adverse effects. Clarify how the loan will be reported to credit bureaus.

  5. Eligibility Criteria. Thoroughly understand the eligibility criteria set by the lender. Ensure you meet the requirements related to income, credit score, and other factors to increase the likelihood of loan approval.

  6. Loan Terms and Conditions. Read the entire loan agreement, including terms and conditions. Pay attention to any clauses related to changes in interest rates, fees, and the lender's policies. Seek clarification on any unclear terms.

  7. Reputation of the Lender. Research the reputation of the lender. Look for reviews and testimonials from other borrowers to gauge the lender's reliability and customer service. Choose a reputable lender with a history of fair practices.

  8. Customer Support. Evaluate the quality of customer support offered by the lender. Prompt and helpful customer service can be crucial in addressing queries or issues during the loan process.

  9. Alternatives and Comparison. Explore alternative lending options and compare terms and conditions. Consider using loan comparison platforms to assess multiple offers and choose the one that best suits your needs.

  10. Security of Online Platforms. If applying online, ensure that the lender's platform is secure. Look for HTTPS in the website address and check for online reviews regarding the security of the lender's online application process.

How to Repay a Small Personal Loan

  1. Understand Repayment Terms. Familiarize yourself with the repayment terms outlined in the loan agreement. Take note of the monthly payment amount, due dates, and the total repayment period.

  2. Set Up Automatic Payments. Many lenders offer the option to set up automatic payments. This ensures that your monthly payments are deducted from your bank account on the specified due dates, reducing the risk of late payments and associated fees.

  3. Create a Repayment Schedule. If automatic payments are not available or preferred, create a repayment schedule. Mark the due dates on your calendar and set reminders to ensure timely payments.

  4. Prioritize Loan Repayment. Consider prioritizing the repayment of your small personal loan to avoid accumulating interest and potential late fees. Making timely payments can positively impact your credit score.

  5. Explore Additional Payment Options. If possible, consider making additional payments beyond the minimum required. This can help reduce the overall interest paid and expedite the repayment process.

  6. Monitor Bank Statements. Regularly monitor your bank statements to confirm that the scheduled loan payments are being deducted accurately. Address any discrepancies promptly by contacting your lender.

  7. Communicate with the Lender. If you encounter difficulties or anticipate challenges in making a payment, communicate with your lender in advance. Some lenders may offer flexibility or alternative arrangements in certain situations.

Reasons for Getting Rejected for a Small Personal Loan

  1. Low Credit Score. A low credit score is a significant factor in loan approval decisions. Lenders may view a low credit score as an indication of a higher-risk borrower, making it challenging to secure a loan, especially from traditional lenders.

  2. Insufficient Income. Lenders assess your income to ensure you have the financial capacity to repay the loan. If your income is deemed insufficient to cover the loan payments, it may lead to rejection.

  3. High Debt-to-Income Ratio. A high debt-to-income ratio, where a significant portion of your income goes toward existing debts, can signal financial strain. Lenders may be hesitant to extend additional credit in such situations.

  4. Incomplete or Inaccurate Documentation. Providing incomplete or inaccurate documentation during the application process can lead to rejection. Ensure all required documents, such as proof of income and identification, are accurate and up-to-date.

  5. Unstable Employment History. Lenders often prefer borrowers with a stable employment history. Frequent job changes or periods of unemployment may raise concerns about your ability to maintain a steady income for loan repayments.

  6. Recent Bankruptcy or Defaults. Recent bankruptcies, foreclosures, or defaults on loans negatively impact your credit history. Lenders may view these events as signs of financial instability, leading to rejection.

  7. Lack of Collateral. Unsecured personal loans do not require collateral, but if you are applying for a secured loan and lack valuable assets to use as collateral, it may impact the approval decision.

  8. History of Late Payments. A history of late payments on existing debts may raise concerns about your financial responsibility. Lenders prefer borrowers with a track record of timely payments.

  9. Multiple Loan Applications. Submitting multiple loan applications within a short period can signal financial distress to lenders. Each application results in a hard inquiry on your credit report, potentially lowering your credit score.

Alternatives

  1. Line of credit. A line of credit is a flexible financial arrangement that allows borrowing money up to a predetermined credit limit set by the lender. Unlike a traditional loan, where the borrower receives a lump sum, a line of credit allows for multiple borrowings as needed. Interest is only charged on the amount borrowed, and the borrower can repay and reuse the credit line as necessary. This financial tool provides convenient access to funds for various needs while offering repayment flexibility.

  2. Pawnshop loan. A pawnshop loan is a short-term, collateral-based borrowing option where individuals can obtain funds by providing valuable items as security. The borrower brings an item of value, such as jewelry or electronics, to the pawnshop, and the pawnbroker assesses its worth. Upon agreement, the borrower receives a loan amount based on the item's value, and the pawned item serves as collateral. If the borrower repays the loan within a specified period, they retrieve their item; otherwise, the pawnshop may sell it to recover the loan amount.

  3. Chequing account overdraft. A chequing account overdraft occurs when an individual withdraws more money from their bank account than the available balance. Banks may offer overdraft protection, allowing account holders to temporarily exceed their balance. The bank covers the shortfall, and the account holder incurs an overdraft fee and is typically charged interest on the overdrawn amount. Chequing account overdrafts provide a temporary financial cushion for small, unexpected expenses but may come with associated fees.

  4. Title loan. A title loan, also known as a car title loan, is a short-term borrowing option where a borrower uses their vehicle's title as collateral. The lender assesses the vehicle's value and offers a loan amount based on a percentage of that value. While the borrower retains possession of the vehicle, the lender holds the title. If the borrower fails to repay the loan, the lender may repossess and sell the vehicle to recover the outstanding amount. Title loans are often used for quick access to funds but come with the risk of losing the vehicle if repayments are not met.

Editorial Opinion

Small personal loans can serve as valuable financial tools for individuals facing unexpected expenses or needing quick access to funds. When used responsibly, these loans can provide a lifeline for covering urgent needs, consolidating debts, or managing short-term financial challenges. The flexibility of small personal loans, especially unsecured personal loan options, allows borrowers to address specific financial gaps without the need for collateral. However, borrowers need to approach these loans with caution, carefully considering interest rates, repayment terms, and potential fees. The risk of high interest rates, particularly in certain lending sectors, highlights the importance of thorough research and choosing reputable lenders.

Important

Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

How to Choose a Lender

  1. Make sure to confirm whether the lender is licensed to operate in your province. You can verify this information with your state regulator or attorney general.

  2. Check if the lender is a member of a reputable association, such as the Canadian Lenders Association (CLA). Membership in such organizations may provide an extra level of reliability.

  3. Carefully review all the terms and conditions of your payday loan contract.

  4. Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.

  5. Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.

  6. Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.

Methodology

At Finanso, we've carried out a comprehensive analysis of over 70 lenders, assessing them based on 35 different parameters across six key categories: accessibility of loans, customer relations, quality of service, interest rates, and transparency of conditions.

In each category, we carefully considered the most critical factors in selecting a lender. These factors include the interest rates, available loan amounts, minimum credit score, minimum income, application fees, and the speed at which funds are transferred.

At Finanso, we highly value our users, which is why we also focus on the quality of customer service, user reviews, and additional features that can aid our users in making a well-informed decision.

Our ultimate goal is to provide insightful recommendations and expert advice to assist you in selecting a lender that best caters to your specific needs.

FAQ

Do banks give $5,000 loans?

Yes, many banks offer personal loans with loan amounts as low as $5,000. Personal loans from banks provide borrowers with the flexibility to use the funds for various purposes, such as debt consolidation, home improvements, or unexpected expenses. The approval for a $5,000 loan from a bank depends on factors such as the borrower's credit score, income, and financial history. Individuals with a good credit score are more likely to qualify for the loan, while those with lower credit scores may face stricter eligibility criteria or higher interest rates.

Where is the easiest place to get a small loan?

The easiest place to get a small loan often includes online lenders and credit unions. Online lenders typically offer a streamlined application process, quick approvals, and convenient access to funds. Credit unions, being member-focused, may be more flexible in their lending criteria, especially for individuals with established relationships. It's essential to compare terms, interest rates, and fees from various lenders to find the most favorable option based on your financial situation and needs.

What is the smallest personal loan you can get?

The smallest personal loan amount varies among lenders, but it's common to find loans starting at around $100 to $500. Some lenders, particularly online and alternative financial institutions, may even provide loans for smaller amounts to address very immediate needs. The minimum loan amount often depends on the lender's policies and the type of loan product offered. Borrowers should carefully review terms and conditions to ensure the loan meets their specific requirements.

Loan Terms