Personal loans in Canada provide a lump sum you pay back over a specific term along with interest. You can use them for a number of purposes, such as consolidating debt or financing a home improvement project. They are typically available from banks, credit unions, and alternative lenders. Many of these providers have lenient requirements for borrowers with bad credit.

When you apply for a personal loan, you will need to provide basic information and documents, such as your income and identification. You should also check a lender’s reputation online to see if they are a good choice.

Demystifying Personal Loans in Canada: Everything You Need to Know

There are two types of personal loans: secured and unsecured. Secured personal loans require you to offer an asset, such as your car or house, as collateral against non-payment. This makes them safer to obtain, but they can come with higher rates. Unsecured personal loans are usually easier to obtain and tend to have lower rates, but they can be riskier because you don’t have an asset protecting your credit score from default.

You can find the best personal loans in Canada by comparing offers from different lenders. Some lenders offer a trial period, where you can test out their product before signing up. For example, Mogo lets you return the money you borrow within 100 days for a full refund of any interest paid. Alternatively, you can choose to work with a loan broker, which acts as an intermediary between you and the lender.