Best Personal Loans In B.C. For May 2024

• easyfinancial: Best for No Credit History & Quick Funding
• Eastern Loans: Best for Smaller Loans & Short-Term Financial Support
• Fusion Credit Union: Best for Versatile Loan Amounts and Flexible Terms
• LendingMate: Best for Borrowers with Credit Scores Below 620
• Spring Financial: Best for No Credit History & Quick, Moderate Loans

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 10 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.

There are several places where you can apply for a loan in B.C., each option has their own advantages and disadvantages, which we break down below.

Banks

Pros

• Lower interest rates for those that qualify
• Reputable financial institutions that don’t engage in predatory lending
• Consumer protections and regulations are in place
• Fixed and variable rate options
• High lending amounts for those that qualify

Cons

• High lending qualification standards
• Hard to qualify if you have bad credit
• Loan approval is generally slow
• Typically must visit a branch to apply for and get approved for a loan
• Lack of diversity in loan terms and options

Credit Unions

Pros

• Favourable interest rates and terms for long-time members with good credit
• Reputable financial institutions working in your community
• Consumer protections and regulations govern their actions
• Fixed and variable interest rate options

Cons

• High loan qualification standards
• Must visit the branch to apply for and get approved for the loan
• Limited branch access that’s not nationwide
• Little to no options for those with bad credit
• Loan approval can be slow

Online Lenders

Pros

• Convenient application process that can be completed from anywhere with an internet connection where the lender is licensed.
• Quick approval after the application is received
• Many loan variations from micro loans to larger amounts at varying interest rates based on credit-worthiness
• Receptive to borrowers with bad credit

Cons

• High interest rates and penalties for missed payments
• Varying levels of live-person customer service availability
• More room for less-than-reputable or predatory lenders
• Less regulation and consumer protection than banks and credit unions

Peer-to-Peer Lenders

Pros

• Higher returns for investors
• A more accessible source of funding than conventional loans from financial institutions
• Lower interest rates due to lower origination fees and a lot of competition among individual lenders
• No reliance on banks or financial institutions

Cons

• No borrower protection
• Higher risk for investors
• Not available in all jurisdictions (and restricted in some)
• Sometimes lending is limited to specific groups
• No government or industry regulation

There are different types of personal loans available in B.C. all with a few notable differences and features.

Unsecured vs Secured Loans

Learn more: Secured Vs. Unsecured Personal Loans

Fixed vs. Variable-rate Loans

Eligibility Criteria

Specific eligibility criteria varies across lenders in B.C., but the following is generally what you can expect:

• Must be19 years old or older
• Must have a steady income
• Must be able to afford loan payments
• Must have a bank account
• Must be a Canadian resident or have a permanent resident card
• Must have a qualifying credit score (varies between lenders)

Debt-to-Income Ratio (DTI)

Your debt-to-income ratio is something a lender will look at to assess whether you qualify for the loan you applied for. Typically. lenders look for a debt-to-income ratio of 35% to 40% or less when looking to approve a loan. A ratio like this indicates you will likely be able to service your existing debt and still payback the loan you are applying for without any payments being missed or the loan you are seeking going into default.

Documents Required for Application

• Government-issued ID (driver’s license, passport, health card, etc.)
• Income verification (paystubs, T4s, etc.)
• Proof of debt or assets (bills, bank statements, etc.)

You may also need to supplement the above with the following:

• Birth certificate
• Social insurance number
• Certificate of citizenship
• Utility bills

If you are comparing personal loans, you will need to assess the following priorities for yourself:

• Budgeting
• Comparing Lenders
• Prequalification Importance
• Completing the Application

There are a variety of factors affecting how much you will pay for a personal loan in B.C.:

• Credit score. A high credit score of 660 or more will likely qualify you for a lower interest rate on a personal loan. Conversely, a lower credit score will mean you’ll pay a higher rate.
• DTI ratio. Though lenders require a debt-to-income ratio of 35% to 40% to approve you for a loan, if that same ratio is under 20%, you will likely qualify for a lower rate.
• Collateral. You’ll pay a lower rate if you are able to secure your loan by tying it to an asset like a car or a home. However, if you end up defaulting on the loan, your secured asset could be confiscated or repossessed.
• Loan term and amount. If you’re looking to pay less on your loan, take out a smaller loan for a shorter amount of time. Longer term loans for more money always cost more in interest in addition to the balance.
• Fees. Choose a lender that doesn’t charge as many fees to save money. Many lenders charge prepayment fees, origination fees, late payment fees and loan insurance, so make sure you read your loan contract thoroughly to understand what you are really paying.

In British Columbia, if a lender offers personal loans above 32% annual interest, they need to be licensed and are regulated by Consumer Protection B.C. These lenders must offer certain disclosures to the borrower. If these disclosures are not in the loan contract, the borrower is given cancellation rights that are not limited by time.

There’s also a one-day cooling off period, where the borrower can immediately cancel a loan contract they just signed for any reason within one day of signing the loan agreement. They are still required to pay back the money borrowed, but they aren’t subject to interest or charges.

The cancellation rights are extended to borrowers who encounter the following:

• The high-cost credit agreement doesn’t tell you about your cancellation rights.
• The agreement doesn’t have all the required contents.
• The high-cost credit grantor doesn’t meet specific requirements regarding their business practices. Learn more about these specific practices here.

There are several ways you can increase your chances of getting approved for a loan in B.C.

• Get preapproved. If you are able to get preapproved for a loan, not only will you better understand the circumstances that will lead to your eligibility, but you’ll be more likely to get approved.
• Pay down debt. Prior to applying for a personal loan, it’s best to pay down any outstanding debt you may have because this will increase your debt-to-income ratio and increase your chances of approval.
• Use a loan comparison tool. You can get a wider snapshot of the loan products available, including term, amount and contract details by comparing costs using a loan aggregator or comparison tool. This will insure that you will be able to get the largest loan for the cheapest monthly payment available.

Learn more: How To Get Guaranteed Approval For A Personal Loan In Canada

A serious loan application requires both a soft and hard credit check, so the lender can find out your credit score and assess your credit history. A soft credit check has no impact on your credit score, while a hard credit check will decrease your credit score only a couple points and as long as you make any outstanding credit payments, your credit score will likely rise again.

Of course, if you miss payments on your loan or ultimately default on your loan, this can do more permanent damage to your credit score which will be harder to restore to more respectable levels and will make it very difficult to get approved for loans and other credit products before your credit returns to normal.

There are several alternatives to getting personal loans from a traditional financial institution, like a bank.

Credit Unions

Credit unions certainly offer personal loans, but their standards for approval are similar to those of banks. You will likely need to meet with an advisor to apply for the loan and come into the branch to fill out the loan application in-person.

Online Lenders

Online lenders allow you to apply for a personal loan entirely online and approval generally only takes 24 to 48 hours with no in-person interaction necessary. There’s usually a good variety of loan styles and amounts available, but the annual interest rates are usually higher than those available in a bank and the terms can be punitive if you miss a payment.

Peer-to-Peer Lenders

Peer-to-peer lenders offer loans without the need for an intermediary financial institution. This method is about individual investors offering loans to borrowers and is potentially an option if borrowers can’t get a loan through traditional means. At the same time, individual investors in the peer-to-peer system will have their own individualized criteria for approving a loan. There are no guarantees for approval.

You can use personal loans in B.C. for a variety of purposes, including the following:

• Debt consolidation. Use a personal loan to consolidate all outstanding debts into one loan and one monthly payment with one, potentially lower, interest rate.
• Vehicle purchase. Use a personal loan to help purchase a vehicle, such as a car or boat.
• Home improvement. Use a personal loan for any renovation or home improvement costs.
• Student borrowing. Use a personal loan to fund your studies, as an alternative to government student loans.
• Emergency fund. Use a personal loan to cover any emergency expenses that may arise at any time when you don’t have the funds immediately at the ready.