Best Personal Loans For Good Credit In Canada For April 2024

We reviewed 76 popular lenders based on 17 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the five best lenders based on the weighting assigned to each category:

• Loan details: 20%
• Loan cost: 25%
• Eligibility and accessibility: 30%
• Customer experience: 15%
• Application process: 10%

Within each major category, we also considered several characteristics that would benefit those with bad credit in particular, including awarding an extra five points for lenders offering a low maximum APR, a low minimum credit score, a high maximum loan term and cosigner/borrower capability. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification options and mobile apps.

Where appropriate, we awarded partial points depending on how well a lender met each criterion.

• Bank of Montreal
• Fairstone Financial
• CIBC
• TD Bank
• LM Credit

Pros

• Better rates and terms than other forms of borrowing money
• Very flexible
• Offer quick cash (usually within about 24 hours) if you find yourself in an emergency
• Can boost your credit score if used correctly

Cons

• Easy to abuse and result in debt
• If not paid back properly, personal loans can jeopardize your good credit score
• Additional fees such as prepayment penalties
• Can increase your debt-to-income ratio

It’s fair to say that having good credit will give you the best deals on personal loans. However, you still need to shop around to find the best fit for you. Here is what you should be looking at when choosing a personal loan for good credit.

Rates: When shopping around for a personal loan you want to make sure you are offered the best rates. So do your research and compare the offers from different lenders.

The loan amount: The amount of the loan is also an important factor. Think about what you plan to use the personal loan for and how much you will need to borrow. This is especially important if you are someone who might get a bit carried away with borrowing;you don’t want to choose a loan you can’t afford to pay back and risk unsustainable debt obligations or default.

Loan terms and features: This is the small print that is just as important as the rate and amount. How long is the term? What are prepayment penalties? Is the payment schedule flexible? Does it come with any perks and features? There are all things you will learn if you comb through the loan contract carefully.

Your annual percentage rate (APR) will depend strongly on your credit score. The higher the credit score, the better rate you are likely to be offered. An excellent credit score is classified as a credit score between 720 to850. Credit scores in this category can expect an APR of around 14%. Good credit scores are those between 690 to719 and in this case, the APR will likely fall around 17%.

There are three main lenders that individuals with good credit can access when searching for a personal loan.

Banks: The most obvious one is a bank. This includes the “Big Six” Banks in Canada, such as the Bank of Montreal, Scotiabank, RBC, CIBC, National Bank and TD Bank. Keep in mind that sometimes the big banks often have higher interest rates. That being said, if you are already a customer with one of the big banks, then you might be able to qualify for a lower rate.

Credit unions: Another place to look for a personal loan is credit unions. Credit unions tend to have good rates and more flexible terms than big banks. However, in order to qualify for a personal loan from a credit union you need to be a member.

Online lenders: Since they don’t have physical buildings, online lenders don’t have the same overhead costs and can often offer better deals. It’s also easy to manage a loan online, but you do need to be comfortable with the online aspect over being able to speak to someone face-to-face at a local branch.

Related: Best Online Personal Loans In Canada

If you are not sure that a personal loan is the right fit for you, you can consider the following alternatives:

HELOC: A HELOC, or home equity line of credit, allows you to borrow money by using your home as a security. Similar to a line of credit account, you can take the money out as you need it.

Home equity loan: A home equity loan is similar to a HELOC in that you borrow money by using your home as a security. However, in this case, you receive all the money you are borrowing upfront.

Personal line of credit: A personal line of credit is a form of revolving debt. You are approved to borrow up to a specific amount and can use it as needed, as long as you continue to pay it back. It usually features a lower interest rate on your spending than credit cards.

Low interest credit card: Some credit cards have introductory periods of several months where the interest is very low. So, if you have a large purchase or expense and are confident that you can pay it back within that low-interest introductory period, this type of credit card could be a smart choice for you.

Related: Best Personal Loans For Bad Credit In Canada