Unsecured Personal Loans for April 2024

Get an unsecured personal loan at one of the lenders verified by our specialists. On 23.04.2024 there are 3 options available to you. Increase your chances of getting a loan — fill out an application with a free credit rating check.
Offers: 3
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™
0
300
650
1000
up to $10.000
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Mogo
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-$15,000
Rate
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Effective interest rate on the product

up to 46.96%
Term
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Loan term for the financial product

up to 60 months
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
i

Effective interest rate on the product

7.5%
Term
i

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 an Unsecured Personal Loan?

An unsecured personal loan is a popular financial tool in Canada, offering individuals and businesses the flexibility to obtain funds without the need for collateral. Unlike secured loans, which require borrowers to pledge valuable assets as security, unsecured personal loans are granted solely based on the borrower's creditworthiness. This means that while borrowers are not risking their valuable assets, the eligibility criteria for unsecured loans often involve stricter credit score requirements and other qualifications.

Unsecured personal loans come in various types to cater to diverse financial needs. One common type is the payday loan. Payday loans, while short-term and unsecured, typically come with high interest rates and are intended for immediate, small financial needs. Another variant is the debt consolidation loan, designed to combine multiple debts into a single, more manageable payment. Revolving credit lines, such as credit cards and lines of credit, represent a flexible form of unsecured borrowing where individuals can access funds up to a predetermined limit as needed.

Features

  1. No Collateral Requirement. One of the primary features is the absence of a collateral requirement. Borrowers don't need to pledge valuable assets, reducing the risk of losing personal property in case of default.

  2. Fixed Loan Amount. Borrowers receive a lump sum amount upfront, providing a clear understanding of the funds available for their financial needs.

  3. Fixed Interest Rates. Interest rates on unsecured personal loans are generally fixed for the duration of the loan term. This stability helps borrowers plan their budgets effectively.

  4. Monthly Payments. Borrowers are required to make regular monthly payments, including both principal and interest, throughout the loan term. This predictable structure aids in budgeting and financial planning.

  5. Repayment Period. Borrowers must adhere to a specified repayment period, making equal payments at regular intervals until the loan is fully repaid. This structured approach assists in debt management.

Pros and Cons

Pros

No Collateral Risk. The absence of collateral requirements means borrowers do not risk losing valuable assets if they default on the loan.

Financial Versatility. Unsecured personal loans can be used for a variety of purposes, including debt consolidation, unexpected expenses, home improvements, or any other personal financial need.

Easy Application Process. The application process for unsecured personal loans is typically straightforward and can often be completed online, providing convenience and accessibility.

Cons

Higher Interest Rates. Due to the increased risk for lenders in the absence of collateral, unsecured personal loans often come with higher interest rates compared to secured personal loan options.

Strict Credit Score Requirements. Lenders assess the borrower's creditworthiness as a crucial factor in the approval process. A credit score of 650 or higher is often required, making these loans challenging for individuals with lower credit scores.

Smaller Loan Amounts. Compared to secured financing options, unsecured loans typically involve smaller loan amounts. Lenders mitigate risk by lending conservative amounts.

How to Get an Unsecured Personal Loan

Apply for a Loan

  1. Assess Your Financial Situation. Review your current financial standing, including income, expenses, and credit score. Understand how much you need to borrow and what you can comfortably afford in terms of monthly payments.

  2. Check Your Credit Report. Obtain a copy of your credit report to understand your credit history. Address any discrepancies or work on improving your credit score if it is below the preferred threshold.

  3. Research Lenders. Explore various lenders, including traditional banks, credit unions, and online lenders. Compare interest rates, terms, and eligibility criteria to find the lender that best suits your needs.

  4. Gather Necessary Documentation. Collect essential documents, including government-issued identification, proof of income, and any other documents required by the lender. Having these ready in advance can expedite the application process.

  5. Understand Loan Terms. Thoroughly review the terms and conditions of the loan, including interest rates, repayment period, and any associated fees. Ensure you understand all aspects of the agreement before proceeding.

  6. Complete the Application. Fill out the loan application form provided by the chosen lender. Be accurate and honest in providing information about your financial situation and personal details.

  7. Await Approval. Once the application is submitted, wait for the lender's response. Many online lenders offer quick approval times, with some providing decisions within a day.

  8. Consider a Co-Signer (if necessary). If your credit history is less than ideal, having a co-signer with a stronger credit profile may increase your chances of approval. The co-signer agrees to take responsibility for the loan if you default.

  9. Review the Loan Offer. If approved, carefully review the loan offer. Pay attention to interest rates, repayment terms, and any additional fees. Ensure you are comfortable with the provided terms before accepting the offer.

  10. Accept the Loan and Receive Funds. Once you accept the loan offer, the lender will disburse the funds. Depending on the lender, this could happen through a direct deposit into your bank account or another specified method.

Requirements

  1. Good Credit Score. Many lenders require a credit score of 650 or higher for unsecured personal loans. A higher credit score improves your chances of approval and may lead to more favorable terms.

  2. Stable Source of Income. Lenders typically prefer borrowers with a steady and verifiable source of income. This ensures that you have the financial means to repay the loan.

  3. Proof of Income. Prepare documents such as pay stubs, tax returns, or bank statements to provide evidence of your income. Lenders use this information to assess your ability to make loan payments.

  4. Credit History. A clean credit history with a good payment record enhances your creditworthiness. Lenders will evaluate how you've managed debt in the past to gauge your reliability as a borrower.

  5. Age of Majority. Borrowers must be of the legal age of majority in their province or territory to qualify for an unsecured personal loan.

  6. Identification Documents. Government-issued identification, such as a driver's license or passport, is typically required during the application process.

  7. Loan Application Form. Complete the lender's application form accurately and provide all necessary information. Be transparent about your financial situation to facilitate a smooth application process.

  8. Co-Signer (if applicable). If your credit is less than ideal, some lenders may accept a co-signer with a stronger credit profile. The co-signer assumes responsibility for the loan if you are unable to repay.

Conditions

  1. Interest Rates. Lenders specify the interest rates associated with the loan. Unsecured personal loans generally have higher interest rates compared to secured loans due to the increased risk for the lender.

  2. Loan Amounts. Lenders will specify the maximum loan amount they are willing to offer. This amount is influenced by factors such as your creditworthiness and income.

  3. Repayment Terms. The loan agreement outlines the repayment period, indicating how long you have to repay the loan. Common terms range from 1 to 5 years, but this can vary among lenders.

  4. Fees and Charges. Lenders may charge origination fees or other associated costs. Review the loan agreement to understand any additional fees that may apply.

  5. Prepayment Penalties. Some lenders may impose penalties if you decide to pay off the loan before the agreed-upon term. Check for prepayment penalties in the loan terms.

  6. Late Payment Consequences. Understand the consequences of late payments, including potential fees and the impact on your credit score.

  7. Default Conditions. The loan agreement will outline the conditions under which the lender can declare the borrower in default. This could lead to legal actions and additional financial consequences.

  8. Grace Periods. Some lenders may offer a grace period for late payments. Understanding these provisions can be crucial in case unexpected circumstances affect your ability to make a timely payment.

Best Places to Get an Unsecured Personal Loan

  1. Fusion Credit Union distinguishes itself with a comprehensive array of loan options, accommodating both individual and substantial business financial requirements. The flexibility in loan terms, spanning from one to 25 years, empowers borrowers to choose a repayment period aligning with their financial circumstances. Although the starting APRs are competitive, potential borrowers should exercise caution regarding the possibility of higher APRs, even though the maximum APR of 10% is relatively moderate compared to some competitors. The credit union's commitment to a personalized approach, including daily human contact, coupled with modern conveniences like online applications and a mobile app, ensures a borrowing experience that is both personable and convenient.

  2. Desjardins stands out for its flexible loan offerings, catering to both minor and more substantial personal financial needs. The inclusion of perks and loyalty discounts enhances its attractiveness, particularly for long-term customers. The provision for same-day funding ensures rapid access to capital, making it a preferred choice for borrowers in urgent situations. With 24/7 customer support and regular human interaction, Desjardins emphasizes a strong commitment to customer service. Eligibility criteria, including a minimum credit score of 640 and residency in specific provinces/territories, ensure a targeted and accessible approach to personal loans.

  3. Eastern Loans emerges as an optimal solution for individuals seeking smaller loan amounts on a short-term basis. Boasting a consistent APR of 23% and a no-prepayment-penalty policy, the lending service emphasizes transparency and flexibility in the repayment process. The absence of a credit history prerequisite widens accessibility for a diverse range of borrowers. Eastern Loans' positive four-star TrustPilot rating attests to a satisfying customer experience, further complemented by same-day funding, ensuring a swift and relatively hassle-free borrowing experience for those with urgent financial needs.

  4. Easyfinancial serves as a vital bridge for borrowers facing challenges due to a lack of credit history. With the provision of same-day funding, the lending service offers prompt financial relief for urgent needs. While the APR range tends to be on the higher side, easyfinancial sweetens the deal with perks such as autopay and loyalty discounts. Offering a flexible loan term ranging from 9 to 120 months and no prepayment penalties, borrowers enjoy the freedom to settle their loans at a pace that suits their financial strategy.

Things to Pay Attention to

  1. Interest Rates. Understand the interest rates associated with the loan. Unsecured personal loans often come with higher rates compared to secured loans. A lower interest rate can significantly impact the overall cost of borrowing.

  2. Loan Terms. Review the repayment period and terms. Longer terms may result in lower monthly payments but could mean paying more in interest over the life of the loan. Shorter terms may have higher monthly payments but lower overall interest costs.

  3. Fees and Charges. Be aware of any fees or charges associated with the loan. This may include origination fees, late payment fees, or prepayment penalties. Assess how these fees may impact the total cost of the loan.

  4. Total Cost of Borrowing. Calculate the total cost of borrowing, considering both the principal amount and the interest accrued over the loan term. This provides a clear understanding of the financial commitment.

  5. Repayment Flexibility. Check if the lender offers any repayment flexibility, such as the option to make additional payments or pay off the loan early without penalties. This can be valuable for managing the loan effectively.

  6. Credit Score Impact. Understand how the loan may impact your credit score. Timely payments contribute positively to your credit history, while missed payments or defaults can have adverse effects.

  7. Late Payment Consequences. Review the consequences of late payments, including potential fees and the impact on your credit score. Some lenders may offer grace periods or alternative arrangements for unforeseen circumstances.

  8. Hidden Clauses. Carefully read the loan agreement for any hidden clauses or conditions. Ensure that you are aware of all terms and conditions to avoid surprises during the repayment period.

  9. Penalties for Early Repayment. If you plan to repay the loan before the agreed-upon term, check for any prepayment penalties. Some lenders may charge fees for settling the loan early.

  10. Comparison Shopping. Explore multiple lenders to compare interest rates, terms, and fees. This allows you to choose the loan that best aligns with your financial goals and offers favorable conditions.

  11. Lender Reputation. Research the reputation of the lender. Look for customer reviews, testimonials, or ratings to ensure you are dealing with a reputable and trustworthy financial institution.

How to Repay an Unsecured Personal Loan

  1. Understand the Loan Terms. Review the terms and conditions of the loan agreement thoroughly. Understand the repayment schedule, including the monthly payment amount, due dates, and the total repayment period.

  2. Create a Budget. Develop a comprehensive budget that incorporates your loan payments. This will help you allocate funds responsibly and ensure that you have enough money set aside for timely payments.

  3. Set Up Automatic Payments. Consider setting up automatic payments through your bank. This ensures that your loan payments are made on time each month, reducing the risk of late fees and maintaining a positive credit history.

  4. Prioritize Loan Payments. Make loan payments a priority in your budget. Ensure that the funds for the monthly payment are set aside before allocating money to other discretionary expenses.

  5. Make Extra Payments (if possible). If your financial situation allows, consider making extra payments towards the principal amount. This can help you pay off the loan faster and reduce the overall interest paid.

  6. Communication with Lender. If you encounter difficulties in making payments, communicate with your lender proactively. Some lenders may offer flexibility or alternative arrangements to help you navigate temporary financial setbacks.

Reasons for Getting Rejected for an Unsecured Personal Loan

  1. Low Credit Score. A low credit score is one of the most significant factors leading to loan rejection. Lenders often have minimum credit score requirements, and if an applicant's score falls below this threshold, the risk associated with lending may be deemed too high.

  2. Limited or Irregular Income. Lenders prefer borrowers with a stable and sufficient income to ensure they can meet their loan obligations. Limited income or irregular employment may be perceived as a risk, making lenders hesitant to approve the loan.

  3. High Debt-to-Income Ratio. Lenders assess the ratio of an applicant's debt to their income. A high debt-to-income ratio suggests that a significant portion of the income is already committed to existing debts, making it challenging for the borrower to take on additional financial obligations.

  4. Insufficient Credit History. Some lenders may reject applications from individuals with insufficient credit history. A limited credit history makes it difficult for lenders to assess the borrower's creditworthiness and predict their ability to manage debt responsibly.

  5. Recent Late Payments or Defaults. Recent late payments on existing debts or a history of defaults can significantly impact a credit report. Lenders may interpret this as a sign of financial instability, reducing the likelihood of loan approval.

  6. Frequent Job Changes. Job stability is crucial for loan approval. Individuals who frequently change jobs may be viewed as less reliable in terms of income stability, leading to concerns about the ability to repay the loan.

  7. Unstable Residential History. Frequent changes in residence may be viewed negatively by lenders. Stability in living arrangements is often associated with financial stability, and instability may raise concerns about the borrower's overall financial situation.

  8. Recent Bankruptcy. A recent bankruptcy filing can have a significant and immediate negative impact on creditworthiness. Lenders may consider individuals with recent bankruptcies as high-risk borrowers.

  9. Application for Multiple Loans. Applying for multiple loans within a short period, especially if several applications are denied, can raise red flags for lenders. It may suggest financial distress or a desperate need for credit.

  10. Unverifiable Information. Providing inaccurate or unverifiable information on the loan application, such as false income details or employment information, can lead to rejection. Lenders rely on accurate information for risk assessment.

Alternatives

  1. Title loans are a type of secured loan where borrowers use their vehicle's title as collateral. To obtain a title loan, the borrower temporarily transfers ownership of their vehicle to the lender while retaining possession and use of the vehicle. The loan amount is determined by the vehicle's value, and the borrower must repay the loan within a specified period. Failure to repay may result in the lender seizing and selling the vehicle to recover the outstanding debt.

  2. Secured credit cards are financial tools designed to help individuals with limited or poor credit histories build or rebuild their credit. To obtain a secured credit card, the cardholder must make a cash deposit, typically equal to the credit limit. This deposit serves as collateral, reducing the risk for the card issuer. The cardholder can then use the secured credit card for purchases, and responsible use, including timely payments, can positively impact their credit score over time.

  3. Secured lines of credit are financial arrangements where borrowers can access funds up to a predetermined limit, secured by collateral such as real estate or other valuable assets. This form of credit allows borrowers to draw funds as needed and repay them with interest. The collateral provides security for the lender, enabling them to offer lower interest rates compared to unsecured lines of credit. If the borrower defaults, the lender may seize the collateral to recover the outstanding debt.

  4. A Home Equity Line of Credit (HELOC) is a financial product that enables homeowners to leverage the equity in their homes as collateral for a line of credit. Unlike a traditional loan, a HELOC provides a revolving credit line, allowing borrowers to access funds up to a predetermined limit during a specified draw period, usually around 5 to 10 years. The homeowner can then use this line of credit for various purposes, such as home improvements, education expenses, or debt consolidation. The interest rates on HELOCs are often variable and tied to benchmark rates, making them subject to fluctuations.

Editorial Opinion

Unsecured personal loans serve as a versatile financial tool for individuals seeking funds without the need for collateral, allowing them to address various financial needs, from debt consolidation to unexpected expenses. The absence of collateral simplifies the application process, making it accessible to a broader range of borrowers. It's crucial for individuals to carefully consider the potential downsides, such as higher interest rates, stricter eligibility criteria, and the risk of loan rejection for those with lower credit scores. While unsecured personal loans offer financial flexibility, borrowers should weigh the advantages and disadvantages, considering their own financial circumstances and goals before deciding on this form of financing.

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

What is the limit on unsecured personal loans?

The limit on unsecured personal loans varies widely and is influenced by factors such as the borrower's creditworthiness, income, and the lending institution's policies.

Generally, lenders offer unsecured personal loans ranging from a few hundred to several thousand dollars. Some financial institutions may cap the loan amount at a specific limit, while others assess individual applications to determine the maximum loan amount based on the borrower's financial profile.

What is the risk of an unsecured loan?

The primary risk associated with unsecured loans stems from the absence of collateral. Since there is no valuable asset securing the loan, lenders face a higher risk of non-repayment. This risk is reflected in higher interest rates for unsecured loans compared to secured ones.

Additionally, individuals with lower credit scores may find it more challenging to qualify for unsecured loans, and those who do may face higher interest rates.

Borrowers should be mindful of the potential impact on their financial well-being, ensuring they can comfortably manage monthly payments and fulfill the terms of the loan agreement to mitigate the risk of financial strain.

What is the minimum credit score for an unsecured loan?

The minimum credit score required for an unsecured loan can vary among lenders.

Generally, a credit score of 650 or higher is often considered a baseline for eligibility. Some lenders may have more stringent requirements, while others may be willing to work with individuals with lower credit scores, albeit potentially at higher interest rates. Credit scores significantly influence the interest rates offered, and a higher score generally leads to more favorable loan terms.

It's advisable for individuals to check their credit scores before applying for an unsecured loan and take steps to improve their creditworthiness if necessary, potentially increasing their chances of approval and obtaining more favorable terms.

Loan Terms