The short answer
- The best personal loan is the offer with the lowest total cost of borrowing that you qualify for and can repay on time. The lowest monthly payment is often the most expensive loan.
- On one $5000 loan, the offer with the lowest APR and the lowest payment cost $1772.73. The best offer cost $1417.49, a difference of $355.24.
- WizardLoans compares licensed Canadian lenders for $100 to $10000 over terms up to 60 months, and no legal loan can go above 35% APR.
- Seeing your matches uses a soft check, so comparing does not touch your credit score.
The best personal loans in Canada are the ones with the lowest total cost of borrowing for your credit profile, a term you can carry, and no fee that quietly lifts the APR. You find them by lining up several offers for the same amount and adding up what each one costs in dollars. WizardLoans is a free matching service that does that line up for loans of $100 to $10000 from licensed Canadian lenders.
This page does the comparison in the open. Below, three offers for the same $5000 loan are worked out to the cent, and the winner is not the one most people would pick. After that come the checks that decide every comparison: the fee, the term, the disclosure you get before signing, and the credit factors lenders look at.
Compare Your Offers: Soft Check Only, No Impact to Your Credit Score
Table of Contents
- What makes one of the best personal loans for you?
- Three offers on one $5000 loan: which is best?
- Why can the lowest APR still cost the most?
- How does a fee change the APR?
- What credit score do you need for a personal loan?
- Bank, credit union or online lender: where should you borrow?
- How does comparing with WizardLoans work, step by step?
- What should you check on the disclosure before you sign?
- Secured or unsecured: which personal loan is best?
- When is a personal loan not the best choice?
- Which offers should you walk away from?
- Can you compare personal loans in every province?
- Best personal loans: frequently asked questions
What makes one of the best personal loans for you?
A personal loan is best for you when it has the lowest total cost of any offer you qualify for, a payment that fits your budget, and terms you understand before you sign. Five numbers decide that, and every lender has to show them to you in writing:
- Total cost of borrowing: every dollar you pay above the amount borrowed, interest and fees together. This is the number that ranks offers.
- APR: the yearly rate with mandatory fees folded in. It compares offers of the same term fairly, and it can mislead when the terms differ, as the $5000 example below shows.
- Term: how many months you repay over. Each extra month lowers the payment and adds interest.
- Fees: setup or administration fees, NSF charges and any prepayment charge.
- Prepayment terms: whether you can pay extra or pay the loan off early without a charge.
Most lists of the best personal loans rank lenders. We rank offers, because the same lender can give two people very different ones. WizardLoans is not a lender, earns nothing extra from pushing one match over another, and shows the APR, term and payment on every match so you can run the numbers yourself.
Three offers on one $5000 loan: which is the best personal loan?
Of three typical offers on a $5000 loan, the cheapest is the 36 month loan at 17%, which costs $1417.49 in total, even though another offer has a lower rate and a lower payment. The figures below are illustrative arithmetic on standard amortized loans. Your own offers will carry the lender’s real numbers, and the method is the same.
| $5000 loan | Offer A | Offer B | Offer C |
|---|---|---|---|
| Interest rate | 11% | 17% | 29% |
| Setup fee | $250 | None | None |
| Term | 60 months | 36 months | 24 months |
| APR with the fee included | 13.26% | 17.00% | 29.00% |
| Monthly payment | $108.71 | $178.26 | $277.00 |
| Total interest | $1522.73 | $1417.49 | $1647.92 |
| Total cost of borrowing | $1772.73 | $1417.49 | $1647.92 |
Offer A looks best on the two numbers people check first. It has the lowest APR, 13.26% even after the fee, and the lowest payment by far. It is also the most expensive loan on the table: $355.24 more than Offer B, because five years of interest outweighs the lower rate.
Offer C is the surprise. At 29% it has a rate that looks alarming next to 11%, yet it costs $124.81 less than Offer A in total, because it is paid off in two years. Its $277 payment is the catch. If that payment would strain your budget, Offer C is not the best loan for you, whatever it costs.
The winner is Offer B, for anyone whose budget carries $178.26 a month. The rule behind it works on every comparison: rank offers by total cost, then pick the shortest term whose payment you can keep up with for its full length. If two offers land within a few dollars, take the one with free prepayment.
Why can the lowest APR still cost the most?
A low APR can still cost the most because APR is a yearly rate, and a longer loan charges that rate for more years. APR is the right tool for comparing two offers of the same length. Once the terms differ, only the total cost in dollars tells you which is cheaper.
Here is the same $5000 at one illustrative rate of 20%, repaid over five different terms:
| Term | Monthly payment | Total interest |
|---|---|---|
| 12 months | $463.17 | $558.07 |
| 24 months | $254.48 | $1107.50 |
| 36 months | $185.82 | $1689.45 |
| 48 months | $152.15 | $2303.29 |
| 60 months | $132.47 | $2948.17 |
Going from 24 to 60 months cuts the payment by $122.01 and adds $1840.67 in interest. The rate never changed. That is why the cost of a long term loan surprises people who only compared payments.
The rate still matters a great deal within one term. On the same $5000 over 36 months, total interest runs from $808.09 at 10% to $1689.45 at 20% and $3142.49 at the 35% legal maximum. Our low interest personal loans guide shows what each rate costs across amounts and terms.
How does a fee change the APR?
A fee raises the APR because you pay interest on the full loan while only receiving the amount left after the fee. Two loans with the same interest rate can therefore have different APRs, and the APR is the honest one.
Take a $3000 loan at 15% interest over 24 months. With no fee, the APR is 15% and the payment is $145.46. Add a $150 setup fee taken from the loan and the payment stays $145.46, but you only receive $2850. Measured against the money you actually got, the APR becomes 20.29%. The headline rate did not move; the price of the loan did.
Ask every lender for the APR and the total cost of borrowing on the same amount and term, and ask what each fee is for. The fees worth checking are:
- Setup or administration fee: charged once, often taken from the funds you receive.
- NSF fee: charged when a scheduled payment bounces.
- Late fee: charged when a payment is past due.
- Prepayment charge: charged by some lenders if you pay the loan off early. Many charge nothing.
What credit score do you need for a personal loan in Canada?
There is no single minimum score for a personal loan in Canada. Each lender sets its own, and online lenders in the WizardLoans network consider files from fair credit upward when the income is steady. Your score mostly moves the price and the amount you are offered, not only the yes or no.
Lenders weigh four things together:
- Credit score and history: recent missed payments and collections weigh more than old ones.
- Income: regular full time or part time employment income, confirmed through IBV bank verification.
- Debt load: how much of your monthly income already goes to other payments.
- Banking history: an active Canadian bank account with direct deposit.
A 600 to 650 score with steady employment income can still get offers. They usually come at a higher APR than a 720 file, so the best personal loans for a fair score are found by comparing more offers, not fewer. If your file needs work first, our guide to online loans for bad credit explains which factors lenders forgive, and the $5000 loan with bad credit guide works the same $5000 through a lower score.
Bank, credit union or online lender: where should you borrow?
A bank is usually cheapest for strong credit and larger amounts, a credit union suits members who already bank there, and an online lender is usually the realistic route to the best personal loans for fair credit and amounts of $100 to $10000. Each wins for a different borrower:
| Lender type | Best for | Trade off |
|---|---|---|
| Big banks | Strong credit, larger amounts, existing customers | Stricter approval, a hard credit check to apply, many do not lend small amounts |
| Credit unions | Members with a banking history there | Membership required, branch hours, slower decisions |
| Online lenders | Fair to good credit, amounts of $100 to $10000 | Prices vary widely between lenders, so comparing matters most here |
The mistake is seeing only one of these. With strong credit, get a quote from your bank and use it as your benchmark against online offers. With fair credit, compare several online offers, since the spread between them is where most of the savings sit. The personal loans in Canada hub covers what each loan type is for.
How does comparing with WizardLoans work, step by step?
Finding the best personal loans through WizardLoans takes one application of about three minutes, a soft check to show your matches, and IBV bank verification with the lender you choose. Approved funds often arrive within one business day. Here is each step with the time it takes:
- Apply once (about 3 minutes): enter the amount you need, from $100 to $10000, your income and the term you would like.
- See your matches (soft check): offers from licensed lenders appear with the APR, term and monthly payment. Nothing here affects your credit score.
- Run the comparison: multiply each payment by the number of months, subtract the amount borrowed, and rank the offers by that total cost, as in the $5000 table above.
- Verify income with IBV (about 60 seconds): the lender you choose sends a secure, read only link that confirms your employment income from your bank deposits. It cannot move money.
- Read the disclosure and sign: the lender shows the full cost of borrowing in writing before you agree. The hard credit check happens at this stage, for that one lender only.
- Get funded: approved funds are often deposited within one business day.
You are never obliged to accept a match. If none of the offers beats your bank’s quote, walk away; the comparison cost you nothing. For a closer look at what happens after you sign, read how personal loans work.
See Your Matches: $100 to $10000, Soft Check Only
What should you check on the disclosure before you sign?
Before you sign, check that the written disclosure shows the APR, the total cost of borrowing, the payment schedule, every fee and the prepayment terms, and that they match the offer you compared. Lenders must give you this cost of borrowing disclosure before the agreement is final, as the Financial Consumer Agency of Canada explains.
Lay two disclosures side by side and check them line by line:
- Amount received: is it the full loan, or the loan minus a fee?
- APR: is it the same figure you were quoted when comparing?
- Total cost of borrowing: this is the number to rank on.
- Number and size of payments: does the payment date fit your pay schedule?
- Prepayment: can you pay early, and is there a charge?
- Default charges: what a missed payment or an NSF costs.
If any number moved between the offer and the disclosure, ask why before signing. A lender that cannot explain it has told you what you need to know.
Secured or unsecured: which personal loan is best?
For amounts of $100 to $10000, an unsecured personal loan is usually the better choice, because it needs no collateral and puts nothing you own at risk. A secured loan is backed by an asset such as a vehicle, which can lower the rate on larger amounts, and the lender can take the asset if you fall behind.
Most people comparing the best personal loans for $100 to $10000 want a fixed rate, a fixed term and a known payoff date, which is what an unsecured online installment loan gives. The full side by side is in our guide to secured vs unsecured loans.
When is a personal loan not the best choice?
A personal loan is not the best choice when the payment would not fit your budget for the whole term, when a cheaper option covers the same need, or when the loan would only move debt around without a plan to stop adding to it.
- The payment is tight: borrow less, or do not borrow. Our guide to how much personal loan you can get helps you size the amount before you compare.
- Your bank beats every match: take the bank’s offer. The best personal loan for you does not have to come through us.
- You are consolidating card debt: a loan only helps if its APR is below the cards it pays off and the cards stay paid down afterwards.
- The need is small and short: an overdraft you can clear within weeks may cost less than any loan once fees are counted.
Which offers should you walk away from?
Walk away from any offer that asks for money before you are funded, will not show the APR in writing, prices above the 35% legal limit, or pushes you to sign before you have compared. Each one fails a basic comparison check:
- Money up front: real lenders take legitimate fees from the loan or build them into the APR. They never ask you to send money first to release a loan.
- A promise of approval before anyone looks at your file: no licensed lender can commit before assessing your income and credit.
- No APR in writing: a quote that is only a monthly payment hides the price.
- Anything above 35% APR: that is the criminal rate of interest set in section 347 of the Criminal Code. Lending above it is not legal lending.
- Pressure to decide today: a real offer survives a day of thought.
Can you compare personal loans in every province?
Yes. WizardLoans compares personal loans for borrowers in all ten provinces and three territories through the same online application, and the 35% APR ceiling applies nationwide. Each province also has its own consumer protection law covering disclosure and collection practices, and Quebec applies its own rules on top of the federal ceiling, so the disclosure you receive follows the rules where you live.
Your best personal loans checklist
Before you accept any offer, confirm these five points:
- You compared at least three offers for the same amount and term, or noted the difference in term.
- You ranked them by total cost of borrowing, not by payment or by rate alone.
- The payment fits your budget for every month of the term.
- The disclosure matches the offer, with every fee listed.
- You know whether you can pay the loan off early and what that costs.
Best personal loans: frequently asked questions
Is a bank loan always the cheapest option?
No. Banks often have the lowest rates for strong credit and larger amounts, but many do not lend small amounts and they decline more fair credit files. Get your bank’s quote as a benchmark and compare it against online offers on total cost of borrowing.
Can I get a personal loan with a 600 credit score?
Often, yes, if you have steady employment income that IBV bank verification can confirm. Expect a higher APR than a strong credit file receives, which makes comparing several offers more worthwhile.
Does comparing offers lower my credit score?
No. Seeing your matches on WizardLoans uses a soft check, which lenders cannot see and which does not change your score. A hard check only happens when you move forward with one specific lender.
How many offers should I compare to find the best personal loans?
Three is a practical minimum: your bank or credit union as a benchmark and at least two online offers for the same amount and term. Past five, the ranking rarely changes.
Can I pay off a personal loan early in Canada?
Usually, yes. Many lenders allow early repayment with no charge, and some charge a prepayment fee. The terms are listed on the disclosure, so check them before you sign, since free prepayment is worth money if your plans change.
What is the highest interest rate a lender can charge?
The criminal rate of interest in Canada is 35% APR, including fees, for personal loans like these. Every offer shown through WizardLoans sits at or below it.
Is WizardLoans a lender?
No. WizardLoans is a free matching service that compares licensed Canadian lenders. There is no cost to compare and you never have to accept an offer.
How much can I borrow through WizardLoans?
You can compare personal loans from $100 to $10000. The amount a lender offers depends on your income, your existing payments and your credit profile.
Ready to compare your own offers?
The best personal loans are picked on purpose, not taken first. Put your real numbers through the same test as the $5000 example: one application, your matches side by side, and the lowest total cost you can afford picked on purpose. More guides are collected in our personal loan guides and the personal loan FAQ.
Compare Your Best Personal Loan Offers: Free, Soft Check Only
About Our Editorial Team
Disclaimer: WizardLoans.ca is a free loan matching service, not a lender, and does not guarantee approval. Rates, terms, fees and funding times are set by third party licensed Canadian lenders and depend on your profile. All offers and figures on this page are illustrative arithmetic, not quotes from any lender, and every legal loan sits at or below Canada’s 35% APR criminal rate of interest. Borrow only what you can comfortably repay. See our disclosures.