Do you need to borrow money? Are you afraid that traditional banks and financial institutions will turn you down due to bad credit or a less-than-ideal financial situation?
Private lenders often provide personal loans and financing to individuals who would otherwise be deemed “too risky” by major banks. While private lenders typically charge higher interest rates, they can be a lifesaver for those who need money in a pinch.
Below, I’ll share some of the best private lenders for personal loans in Canada, so you can weigh your options and get the money you need.
If you walk into a major bank like RBC, CIBC, or BMO and ask for a small personal loan, you’ll likely be denied unless you have exceptional credit, good history with the bank, or collateral to cover the loan.
Major banks (and even smaller banks and credit unions, for that matter) take risk management very seriously and have a reputation for being incredibly picky regarding personal loans.
The 2008 financial crisis significantly affected personal loan approval, and BMO reported that it increased due diligence on loan applications by 25% in 2009.
Private lenders don’t have the same restrictions and are more likely to offer personal loans and financing to people turned down by traditional banks. Of course, there are a few trade-offs to be aware of, such as:
- Interest rates are typically higher than those offered by major banks
- Loan terms may be shorter
- Late payment fees can be harsh
Just be sure you know the loan terms and have a reliable plan to pay off the borrowed amount.
A quick Google search will reveal a long list of private lenders in Canada. Here are Wealth Awesome’s top three private lender picks to make your job easier.
- Best For: Short-term loans
- Learn More: loanconnect.ca
Loan Connect operates as an online middleman, linking consumers with private banks and lenders willing to lend to work with each applicant.
Loan Connect offers a quick user-friendly pre-approval process that’s far quicker than if you were to walk into a traditional bank or credit union (which could involve a long interview).
This helps you determine your approval prospects before investing too much of your valuable time.
Once you answer the platform’s basic questionnaire, Loan Connect will connect you with a selection of potential lenders, outlining their terms for easy, side-by-side comparison.
Once your loan is approved and your documents are signed and sealed, Loan Connect takes care of disbursement from there. Your funds are guaranteed within 24 hours via direct deposit, so you can move on with your life.
- Best For: Debt consolidation loans
- Learn More: Loanscanada.ca
Loans Canada connects borrowers with private lenders and is very similar to Loanconnect.
Its offerings range from home and auto refinancing options to asset financing for small-scale businesses and personal loans.
Once you reach the landing page, simply select the loan product you’re looking for, and complete a short questionnaire. Once complete, you’ll begin receiving personalized offers from private lenders within a day or two.
Loans Canada even steps in to help you pay off your debts by buying your current default loan, stopping any not-so-nice consequences like repossession from occurring.
Getting pre-approved for a personal loan is very easy and won’t take more than a few minutes of your time. You’ll receive offers whether you’ve got good, below-average, or even no credit.
Once you receive your offers, compare and contrast them to decide which fits your needs and finances best.
- Best For: Personal loans from fellow Canadians
- Learn More: gopeer.ca
goPeer Lending is one of Canada’s leading peer-to-peer online lending networks. Unlike Loans Canada or Loan Connect, which link you with small private banks and capital lenders, goPeer connects users with individuals who’ve offered to provide personal loans to their fellow Canadians.
To get approved for a goPeer loan, you’ll need to meet a few basic requirements:
- A credit score of 600 or higher
- At least 18 years old
- Earn at least $15,000 per year
- Have a Canadian bank account
- Have been a resident of Canada for at least three years
Although goPeer’s requirements are a bit stricter than my previous two picks, you could stand to get more favourable loan terms and/or request a larger loan.
goPeer provides loans that range from $1,000 to $35,000 with interest rates that range between 8% and 54%. The amount and rate you’re approved for depend on your overall creditworthiness and what your matched peer-to-peer lenders are willing to accept.
On a side note, goPeer can also be a good side hustle. Once you build your capital, you can apply as an investor on goPeer’s website and earn interest by offering loans to other applicants.
- Related Reading: Average Credit Score By Age In Canada
Loan Connect, Loans Canada, and goPeer are my top three choices for borrowers looking for a personal loan from a private lender. However, there are a number of other private lenders that are worth looking into as well if you want to compare more options.
- Best For: Variable-term personal loans
- Learn More: apply.smarter.loans
Like Loans Canada, Smarter Loans is an online marketplace that acts as a matchmaker between Canadians and a diverse range of private personal loan providers.
It offers a comparative tool that helps borrowers discover tailored loan products for their unique financial circumstances and requirements.
To start, you must fill out an online application form, which will ask for some fundamental details about your financial status and your specific loan needs.
After submission, your application gets evaluated by the Smarter Loans team, which then pairs you with an appropriate lender(s) within the Smarter Loans network.
You can compare various loan rates, terms, and aspects before deciding on the lender you’d like to borrow from. Once your chosen lender approves the amount, you can receive your funds in as little as 24 hours.
- Best For: Small business start-up loans
- Learn More: freedomcapital.com
Freedom Capital offers a wide range of personal and commercial loans to Canadians who are unlikely to receive loans from traditional financial institutions.
The lender specializes in commercial business loans for “risky” businesses and non-ideal mortgage loans for self-employed individuals, new migrants to Canada (with no credit score), or those who were recently divorced or separated.
However, Freedom Capital also offers small personal loans to everyday Canadians with no or low credit. Whether you need to cover costly medical bills, start-up capital for your small business, or a debt consolidation loan, this lender is worth a shot.
- Best For: Small loans with flexible repayment terms
- Learn More: skycapfinancial.com
SkyCap Financial provides small personal loans that range between $500 and $10,000. The lender’s motto is, “We say YES when banks say NO!” which is promising.
The lender offers quick applications, flexible repayments, and fixed interest rates, to make things simple and easy for its customers.
You can apply online easily, with no collateral needed.
If approved, you’ll receive funds within 24 hours, set up for automatic, scheduled payments. As a SkyCap borrower, you’ll also gain access to SkyCap University, a free financial education course that could help lower your interest rate.
- Best For: Personal loans for freelancers
- Learn More: magicalcredit.ca
Magical Credit offers loans between $1,500 and $20,000 with payment terms ranging between 12 and 60 months, guaranteeing a flexible solution.
It also accepts government subsidies and unconventional income sources, such as freelancing or working as a sub-contractor.
The company considers your entire financial picture, not just your credit score, potentially enabling those on income support to qualify. You apply online by detailing your income, expenses, and employment. Approved loans are typically funded within one business day.
- Best For: Small emergency loans
- Learn More: loanaway.ca
Loan Away offers financing that ranges between $1,000 and $5,000, which makes it one of the smaller lenders on this list. However, it also means getting approved could be even easier!
In fact, Loan Away boasts a 90% loan approval rate, which is incredibly high (even for bad-credit lenders).
Applications are processed daily, and Loan Away emphasizes your repayment capacity over credit scores. To secure a loan, apply online, complete the brief questionnaire, and wait 20 minutes for a response. Upon approval, expect funds in your account within 24 hours.
- Best For: Car loan from a private lender
- Learn More: carloanscanada.com
If you need to finance a car and you’re unsure of whether or not you’ll be approved, Car Loans Canada is worth looking into.
The company connects applicants with private lenders and small banks across Canada, so you can compare rates. It also advertises interest rates as low as 6.99%, which is similar to what you’d receive from a major bank.
When you apply online, Car Loans Canada will perform a soft credit inquiry with Equifax, which won’t hurt your score.
Once you provide some information about your income and trade-in value (if you already have a vehicle), you’ll be offered competitive rates from multiple lenders to compare and contrast your options.
- Best For: Same-day emergency loans
- Learn More: loanz.ca
Loanz is an online private lender that aims to provide accessible credit to Canadians through a swift application process. After completing a quick online form and detailing your income, you’ll be asked to connect your bank account to verify the details.
The only overtly denied applicants are those who have active collections or have filed for bankruptcy.
After reviewing and approving your loan offer, you can receive your funds in as little as 15 minutes, which is incredibly quick.
- Best For: Home equity loans for renovation
- Learn More: myprivatelender.com
Calgary-based Private Lender Inc. primarily focuses on mortgage refinancing and home equity loans. The lender provides funding to homeowners who would otherwise be denied or have trouble refinancing their homes through traditional banks.
- Best For: Personal loans
- Learn More: home.consumercapitalcanada.ca
Consumer Capital is a small online private lender that offers flexible personal loans between $1,500 and $12,500. Interest rates range between 19,99% and 34.99%, though, which is a bit high compared to some of the other lenders I’ve mentioned.
Credit cards often offer more favourable interest rates, so I recommend applying for a bad-credit credit card before trying this lender.
The good news is that applications are quick (it only takes about five minutes) and you can expect your funds within two business days if you’re approved.
- Best For: Large, short-term loans up to $100k
- Learn More: easyfinancial.com
From personal loans to auto loans, mortgages, and point-of-sale loans, Easyfinancial makes things… well easy.
Easyfinancial offers personal loans between $500 and $100,000, making them one of the larger private lenders on this list.
Repayment terms range between 9 and 24 months, which means you won’t have as much time to repay compared to other long-term lenders that offer up to 60 months to repay.
Easyfinancial offers to reduce your interest rate by 2% if you bring a co-applicant and also offers a $100 referral credit if you recommend friends and family members.
- Best For: Travel loans
- Learn More: sympleloans.ca
Toronto-based Sympleloans is a BBB-accredited online lender that offers between $5,000 and $50,000 personal loans with rates as low as 6.99%. The company offers a wide variety of personal loans for debt consolidation, investment, emergencies, purchases, travel, and more.
After completing the online questionnaire, you’ll receive a response and offers within two minutes. Once approved, you can expect the funds the next business day.
- Best For: Personal loans that provide access to larger loans
- Learn More: mogo.ca
Mogo is one of Canada’s fastest-growing fintech companies. Personal loans can be applied for within minutes online or using the Mogo app.
Mogo offers two perks that really set it apart from other private personal lenders:
- Level Up
- 100-day “Test Drive”
The Level Up feature allows consumers to access larger loans and greater capital as long as they make their loan payments on time.
The “test drive” gives borrowers 100 days to decide whether or not they enjoy their loan experience.
If you aren’t satisfied with your loan experience in the first 100 days, simply pay back the principal you borrowed, and Mogo will refund any interest and fees you’ve already paid.
- Best For: Long-term personal loans
- Learn More: apply.fairstone.ca
Fairstone offers loans between $500 and $50,000 with variable repayment terms of up to 10 years, which gives borrowers plenty of time to repay larger personal loans.
The lender provides diverse credit solutions, including secured and unsecured personal loans, home equity, car loans, and debt consolidation loans.
Borrowers can apply online or at a local branch. Just fill out a form and discuss your needs with a lending specialist (online or in person).
After providing financial, employment, and credit details, approved loans are disbursed into your account within 24-48 hours or provided via cheque, based on your preference.
- Best For: Small, short-term loans under $1,000
- Learn More: loanmenow.ca
LoanMeNow is a loan connection platform similar to Loan Connect. However, this lending platform focuses on small loans between $500 and $1,000 that are paid off in less than 84 days.
Interest rates are rather high, though, and can go up to 32%, so I wouldn’t use this particular lender unless you really need to.
If you’re looking for the best platform to compare and contrast personal loans from private lenders in Canada, I suggest Loan Connect. The application process is quick, easy, and won’t affect your credit.
You’ll receive personalized offers, which allows you to find the best deal for you. If you don’t like the terms, you’re not required to accept any of the offers.
Keep reading to see my full review of Loan Connect!