How to Get a Loan with Bad Credit in Canada 2024

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Alexandre Desoutter updated on 21 December 2023


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Are you in need of a loan but worried about your credit?

Over 1 million Canadians face the challenge of having bad credit. Life circumstances sometimes require you to access extra cash by getting a personal loan, car loan or business loan. This can be difficult if you haven’t built a good credit history. However, there are ways you can access emergency loans with Canadian banks and lenders even if you have bad or poor credit.

We’ll answer your questions here about how you can get approved for a bad credit loan in Canada.

Where can I get a loan with bad credit?

You can apply for a loan with bad credit at a bank, credit union, loan agency or online lender. While some lenders approve loan applications regardless of credit score, alternative lenders (as opposed to traditional banks) are more likely to approve a loan applicant with bad credit. They may have higher interest rates than banks, so make sure to read all of the terms carefully.

If you use an alternative lender, you can often apply completely online. Usually, the full amount of the loan will be directly deposited into your bank account, and then you can repay it in regular installments.

Ready to explore bad credit loan options? You can right here.

How can I get a loan with bad credit?

Lenders and banks generally look at your credit score, bankruptcy and debt default history when evaluating your loan application. Some lenders will not conduct a credit check but will examine your income level and employment when determining your loan qualifications. This helps the lender weigh the risk involved when offering the loan.

A good way to qualify for a bad credit loan is to ask someone who has good credit to co-sign onto the loan with you and to approach a traditional lender. The lender will consider the higher of the two credit scores or will use the average of both. They will then offer more favourable borrowing terms and usually lower interest rates. This is also a great way to rebuild your credit score as the borrower with a lower score.

Where can I get an unsecured loan with bad credit?

An unsecured loan does not require offering any collateral (such as a car title). Many private lenders in Canada offer unsecured loans to borrowers with poor credit, but it can be very difficult to find a bank or credit union that does the same. Various lenders will offer different types of payment plans, interest rates and loan amounts.

Lender or PlatformAmountInterestTerms
Up to $50,0005.75% to 46.96% APR6 to 60 months
Loans Canada
Up to $50,0002.99% to 46.96% APR4 to 6 months
Up to $15,00029.9% to 46.9% APR12 to 60 months
Up to $15,00019% to 46.96% APR6 to 12 months
Up to $35,0009.9% to 47.72%3 to 60 months
Comparison of lending agencies in Canada

Should I use a bank or other lender for a bad credit loan?

You may find that it is easier to get approved by a private lender rather than a traditional bank for a bad credit loan. A benefit of using a private lender is that they could offer a bad credit loan without checking your credit. They may examine your income and other financial factors. Usually, bad credit loans come with higher interest rates because lenders are taking a bigger risk with their loan offers.

Many traditional banks deny loan applicants who lack good credit history or steady income. If a bank does approve a bad credit loan, it may offer better payment plans than alternative lenders. Regardless of which one you choose, make sure to read the loan conditions carefully to ensure you can pay it back within the allotted time frame.

How much money can I borrow with bad credit?

You may be able to borrow anywhere from $500 to $35,000. The amount of money you can borrow with poor credit depends on your financial profile and the level of risk your specific lender is willing to take.

Be aware of the potential for high-interest rates with a bad credit loan. Lenders determine the interest rate based on your income, the risk assessment and potentially your credit history. To repay the loan, many bad credit lenders allow you to repay with installments. Make sure to check the details of the terms before you agree to take the loan deal.

What are some costs to consider with a bad credit loan?

You’ll want to consider the interest rate on the loan. When you calculate how long it will take you to pay back the loan with the interest, decide whether this is a realistic amount for you to manage. Another issue to consider is that the loan could potentially lower your credit score even more. If you take out credit often, it can negatively affect your score.

Watch out!

Remember: your score can go down if you miss repayments on the new loan.

What are the pros and cons of a bad credit loan?

Here are some advantages and disadvantages to consider when weighing a bad credit loan:


  • Borrow cash quickly
  • Helps with an emergency expense
  • Can lower interest rates on other debt if you consolidate it into one loan
  • Can rebuild your credit score if you make repayments on time


  • High-interest rates
  • Fees and penalties
  • Smaller loan amounts
  • Can lower your credit score if you miss repayments

What is the easiest loan to get with bad credit?

The easiest types of bad credit loans for Canadians are payday loans, personal installment loans, car title loans and pawnshop loans. These loans may require you to pay them back within a short amount of time, and they may be smaller than other types of loans.

Loans such as car title loans and pawnshop loans are secured loans which require collateral that could be seized or sold by the lender if you don’t pay back the loan in time.

Can I get a personal loan with no credit check?

Yes, some lenders offer bad credit personal loans with guaranteed approval of $10,000. Some lenders may offer even more to the right applicant. Lenders who work with borrowers with bad credit do not always ask to check your credit. They may examine other financial factors such as:

  • Income
  • Employment status
  • Business size
  • Co-signer’s credit score (if you have someone to co-sign)
  • Amount of debt
  • Bankruptcy history

​​How can I get a car loan with bad credit?

It is possible to get a car loan even if you have bad credit. You can use a loan agency, a car credit agency, or a car dealership. Lenders may look at your income in order to determine whether or not you’ll be able to repay the auto loan. The minimum income that is commonly required is $1,800 per month.

Some private lenders offer guaranteed auto loans for bad credit. It can boost your likelihood to get a loan if you buy a used car and if you have someone to co-sign a loan with you. If your co-signer has good credit, the lender will use the higher credit score or will take the average of both credit scores when determining the loan terms. If you are unable to make a payment on the loan, the co-signer will be expected to pay.

Where can I get a small business loan with bad credit?

If you need a small business loan to help spur your company on, check out private loan agencies. Certain lenders offer up to $500,000 in loans. Make sure to verify the interest rates especially if you are applying for an unsecured loan. For example, APR can range from 5.9% to 29% for small business bad credit loans.

When you apply for a small business loan, it’s important to bring a business plan and sales projection information for your company. A thoughtful business plan and financial projections make your application more likely to be approved.

How can I get a debt consolidation loan with bad credit?

If your credit score is at least 580, some lenders offer a debt consolidation loan. You may be required to have a co-signer whose credit score could lower if you miss a repayment. Secured debt consolidation loans on bad credit will be easier to qualify for than unsecured loans. You can look into online lenders and credit unions to apply for a debt consolidation loan. This type of loan could save money in the long term if the interest rate is lower than the interest on your current debts.

Can I get an online loan with bad credit?

Yes, many loan agencies and private lenders offer online loan applications even if your credit score is less than desirable. This can be beneficial if you need cash quickly. You may be asked to show proof of identification and income. Make sure to carefully read the conditions of the loan to check the interest rate, repayment plan, term and any possible fees.

Ready to compare lenders? You can right here.

Can I get a mortgage with bad credit?

It is possible to find bad credit mortgages in Canada. Many banks have credit score minimums, but private lenders are more likely to approve a mortgage application with bad credit. You can use bad credit mortgage brokers if you need help applying. A potential caveat with a bad credit mortgage is that you may be required to pay a 20% down payment.

It’s a good idea to try to rebuild your credit score, save for a larger down payment and stabilize your income in order to lower the interest on your mortgage. Also, consider asking someone to co-sign which will lower the risk level of the mortgage and make your application more attractive to the lender.

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Alexandre Desoutter

Alexandre Desoutter has been working as editor-in-chief and head of press relations at HelloSafe since June 2020. A graduate of Sciences Po Grenoble, he worked as a journalist for several years in French media, and continues to collaborate as a as a contributor to several publications.


Can I get a loan if I have bad credit

author-profile-picture Alexandre Desoutter Our expert

Hi Keisha,

You can with the loaners listed at the top of this page. You can get an online quote by clicking on the button "Learn more".

Have a good day, the Hellosafe team.