Best Online Personal Loans In Canada For This Year

 

Though interest rates have not moved since July of 2023, and inflation is slowly on the decline, many Canadians are still feeling the pressure of rising costs for goods and services across the nation. While things may be getting better from a bird’s eye view, many consumers aren’t feeling changes at the ground level.

If you’re wondering how to handle a rising cost of living and tackle outstanding debt quickly, an online personal loan may be an option for some. Forbes Advisor Canada has meticulously reviewed multiple types of lenders across Canada to come up with the five best online personal loans for March 2024. This guide also includes how these loans work and what you can expect, as far as interest rates based on your credit history.

What Is an Online Personal Loan?

An online personal loan is typically an unsecured loan that can be used for any purpose. Unlike a mortgage, online personal loans are not directly attached to an asset and as such, are very flexible.


In contrast to loans offered in person—also referred to as traditional loans—online loans often come with much faster application and approval timelines. As with any lending contract, the borrower will be provided with funds and will be required to pay back the borrowed amount within the agreed upon time period.

Methodology

We reviewed 82 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 8 best lenders based on the weighting assigned to each category:


Loan details: 20%

Loan cost: 35%

Eligibility and accessibility: 20%

Customer experience: 15%

Application process: 10%

Within each major category, we also considered several characteristics, including available loan amounts, repayment terms, APR ranges and applicable fees. We also looked at minimum credit score requirements, whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification options and mobile apps. We of course rated those lenders that allowed for online loan applications higher than those that didn’t.


Where appropriate, we awarded partial points depending on how well a lender met each criterion. It should go without saying that lenders that didn’t provide online applications for personal loans were excluded from consideration.

How Do Online Personal Loans Work?

Online personal loans work by providing funds, at an agreed upon interest rate and payback period, to a borrower. These funds can be used for any purpose the borrower deems necessary. Lenders of online personal loans may be banks and other financial institutions, payday loan companies or peer-to-peer lending platforms. Each of these lenders will offer different interest rates based upon the rate type chosen, (i.e. variable or fixed) your credit score and history and your income level.

How Do You Apply For an Online Personal Loan?

To apply for a personal loan online, you simply need to enter in your personal and financial information on the lender’s website. Once entered, you may be asked some questions regarding the type of loan you are looking for, its payment structure and other administrative details. Online lenders may also do a soft credit check to confirm your identity and ensure you are able to borrow from them.

FORBES

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