When you need a little extra cash, personal loans can be an attractive option. But it’s important to understand how personal loan interest rates work to make the right decision for you and your finances.
The best personal loan interest rates Canada depend on your credit score, the amount of money you need, and whether or not you’re looking for a secured or unsecured loan. The loan term and additional fees will also affect how much you pay overall. In addition, some lenders offer both fixed and variable personal loan interest rates. Fixed rate loans remain the same over the life of the loan while variable rates change throughout the term of the loan based on changes to the prime lending rate1.
Borrowing Smart: A Guide to Personal Loan Interest Rates in Canada
A variety of different lenders can offer personal loans in Canada. These include banks, credit unions, and online lenders. Each lender might have slightly different loan products, terms and conditions, and interest rates, so it’s important to shop around for the best rates.
Banks are typically the best source for personal loans in Canada. However, their requirements are strict and may not be suitable for all borrowers. Some banks have minimum borrowing amounts and only offer low rates for those with excellent credit scores and debt service ratios. Credit unions are often more flexible with their loan requirements and can provide competitive rates for some borrowers.
Peer-to-peer lenders can be another great option for some borrowers. They have lower operating costs than banks and can pass the savings to borrowers via low rates.