{"id":15514,"date":"2022-11-14T09:36:00","date_gmt":"2022-11-14T17:36:00","guid":{"rendered":"https:\/\/www.nerdwallet.com\/ca\/?page_id=15514"},"modified":"2024-05-06T14:16:31","modified_gmt":"2024-05-06T21:16:31","slug":"what-is-a-personal-loan","status":"publish","type":"page","link":"https:\/\/www.nerdwallet.com\/ca\/loans\/what-is-a-personal-loan","title":{"rendered":"What Is a Personal Loan?"},"content":{"rendered":"\n<p class=\"\">Personal loans, also known as consumer loans allow you to borrow funds from a lender to cover personal expenses or consolidate higher-interest debt. When you sign a personal loan agreement, you accept to pay back the funds plus <a href=\"https:\/\/www.nerdwallet.com\/ca\/banking\/what-is-interest-rate\">interest<\/a> on a set payment schedule.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How personal loans work<\/h2>\n\n\n\n<p class=\"\">When you take out a personal loan, you borrow money from a bank, credit union or alternative lenders \u2014 such as an online broker or payday lender that you must pay back with interest over agreed regular payments.<\/p>\n\n\n\n<p class=\"\">Personal loan amounts can vary widely. You can borrow $100 to $50,000 on varying repayment terms of six to 60 months, or longer in some cases. Personal loans can be <a href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/what-is-a-secured-personal-loan\">secured<\/a> \u2014 guaranteed with collateral or <a href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/what-is-an-unsecured-personal-loan\">unsecured.<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Common personal loan uses<\/h3>\n\n\n\n<p class=\"\">Most personal loans don\u2019t have strict rules around how the funds can be used. Common uses include:<\/p>\n\n\n\n<ul class=\"\">\n<li class=\"\">Consolidating high-interest debt.<\/li>\n\n\n\n<li class=\"\">Paying for unexpected expenses such as emergency car repairs.<\/li>\n\n\n\n<li class=\"\">Home renovations.<\/li>\n\n\n\n<li class=\"\">Large expenses like a vacation or wedding.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">How to apply for a personal loan in Canada<\/h2>\n\n\n\n<p class=\"\">Canadians have many ways to get a personal loan as long as they meet the lender\u2019s requirements and are aware of the application process.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What you need to get a personal loan<\/h3>\n\n\n\n<p class=\"\">Personal loan lenders generally require you to:<\/p>\n\n\n\n<ul class=\"\">\n<li class=\"\">Be the age of majority in their province or territory.<\/li>\n\n\n\n<li class=\"\">Present a government-issued identification.<\/li>\n\n\n\n<li class=\"\">Provide proof of a steady income and an active Canadian <a href=\"https:\/\/www.nerdwallet.com\/ca\/banking\/types-of-bank-accounts\">bank account.<\/a><\/li>\n\n\n\n<li class=\"\">Show a proof of residence.<\/li>\n\n\n\n<li class=\"\">Have a credit score.<\/li>\n<\/ul>\n\n\n<div class=\"c-block-in-house-promotion is-advert-style__image-small is-style-horizontal wp-block-nerdwallet-blocks-in-house-ad\">\n\n\t\t\t<div class=\"c-promotion-banner__partner-spotlight\">\n\t\t\t<img\n\t\t\t\tsrc=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/plugins\/nerdwallet-blocks\/assets\/images\/nerdwallet-bug.svg\"\n\t\t\t\talt=\"Nerdwallet Logo\"\n\t\t\t\/>\n\t\t\t<span class=\"c-promotion-banner__partner-spotlight--title\">\n\t\t\t\tPartner Spotlight\t\t\t<\/span>\n\t\t<\/div>\n\t\n\t<div\n\t\tclass=\"c-block-in-house-promotion__inner\"\n\t\tstyle=\"background-image: none;\"\n\t>\n\n\t\t\t\t\t<div class='c-block-in-house-promotion__image-wrapper'>\n\t\t\t\t<div class='c-block-in-house-promotion__image'>\n\t\t\t\t\t<img decoding=\"async\" class=\"c-block-in-house-promotion__icon-img\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2024\/04\/LoanConnect-Logo-Transparent-Background.png\" alt=\"Ad Icon\" \/>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\n\t\t<div class=\"c-block-in-house-promotion__content-wrapper c-block-in-house-promotion__no-image\">\n\t\t\t\n\t\t\t<h3 class=\"c-block-in-house-promotion__title\">Get Multiple Loan Offers in Under 60 Seconds!<\/h3>\n\t\t\t\t\t\t\t<p class=\"c-block-in-house-promotion__content\">\n\t\t\t\t\tA Leader in Personal Loan Solutions for Canadians!<strong> Pre-Approvals up to $50,000. Choose the rates &amp; terms that work for you<\/strong>. A Safe and Secure System that allows you to search a network of Canadian lenders.\t\t\t\t<\/p>\n\t\t\t\t\t<\/div>\n\n\t\t<div class=\"c-block-in-house-promotion__cta wp-block-button\"><a href=\"https:\/\/loanconnect.ca\/apply_now?pd=nerdwallet\" target=\"_blank\" rel=\"nofollow noopener noreferrer\" class=\"nw-cta track-click-mon wp-block-button__link wp-element-button\" data-placement=\"Promotional banner\">APPLY NOW<\/a><\/div>\t<\/div>\n<\/div>\n\n\n\n<p class=\"\">A good <a href=\"https:\/\/www.nerdwallet.com\/ca\/personal-finance\/what-is-a-good-credit-score\">credit score<\/a> is typically 660 and above. Credit scores help lenders determine whether the applicant is likely to repay the loan. A lender may also consider the applicant\u2019s debt load and refuse to offer the loan if there is too much pre-existing debt.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How to get a personal loan<\/h3>\n\n\n\n<p class=\"\">If you\u2019re applying for a personal loan with one of Canada\u2019s big national banks or a credit union, you can generally go into a branch and apply in person. Be sure to bring the required documents along. You may also have the option of applying online or over the phone.<\/p>\n\n\n\n<p class=\"\">Alternative lenders such as online loan brokers might allow you to apply online but expect you to scan and upload any required documents for verification. After you apply, the lender may instantly send a confirmation that your application was received, but take a few days until they decide the outcome. However, some lenders boast response times as quick as 15 minutes.<\/p>\n\n\n\n<div class=\"wp-block-group has-lightest-green-background-color has-background is-layout-flow wp-block-group-is-layout-flow\" style=\"padding-top:40px;padding-right:40px;padding-bottom:40px;padding-left:40px\">\n<p class=\"\"><strong>Nerd tip: <\/strong>When your personal loan application is approved, make sure to read the loan agreement carefully before you sign. Pay special attention to the amount of the loan, the interest rate, the term and additional fees. To avoid any surprises, enter these details into an online loan cost calculator and make sure you have an accurate understanding of the overall cost of your loan.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Where to get a personal loan<\/h2>\n\n\n\n<p class=\"\">Canadians can borrow money from various financial institutions based on their credit rating and the type of personal loan they choose to apply for.<\/p>\n\n\n\n<p class=\"\"><a href=\"https:\/\/www.nerdwallet.com\/ca\/banking\/big-5-big-6-banks-canada\"><strong>Big 6 banks.<\/strong><\/a> Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC) and National Bank of Canada (NBC) all offer personal loans. These banks have strict loan guidelines and generally prefer to offer loans to borrowers with good credit scores. Some banks may offer both secured and <a href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/what-is-an-unsecured-personal-loan\">unsecured loans.<\/a><\/p>\n\n\n\n<p class=\"\"><a href=\"https:\/\/www.nerdwallet.com\/ca\/banking\/what-is-a-credit-union\"><strong>Credit unions.<\/strong><\/a> Much like the big banks, credit unions tend to favour borrowers with good credit scores when approving unsecured and secured personal loans.<\/p>\n\n\n\n<p class=\"\"><strong>Private lenders.<\/strong> Sometimes called alternative lenders may not have to work within the same tightly regulated scope as traditional big banks. This flexibility allows them to offer private loans even to borrowers with shaky financial histories or lower credit scores \u2014 but that comes at a price. Private lenders typically charge additional fees and higher interest rates than traditional banks.<\/p>\n\n\n\n<p class=\"\"><strong>Online lending platforms and brokers.<\/strong> Another form of alternative lender is an online-only lending platform or loan broker. Once the borrower enters their personal, based on their needs and eligibility, they get several offers from different lending companies. Online lending marketplaces like <a href=\"https:\/\/www.nerdwallet.com\/ca\/personal-finance\/borrowell-review\">Borrowell<\/a> offer more options to choose from without having to manually apply to each one. However, they may also charge additional fees and higher interest rates than banks.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Considerations when comparing personal loans<\/h3>\n\n\n\n<p class=\"\">The devil is in the details. It\u2019s crucial to pay special attention to some areas of your loan agreement before signing it, including:<\/p>\n\n\n\n<ul class=\"\">\n<li class=\"\"><strong>Terms of repayment.<\/strong> The terms indicate how many months or years you\u2019re expected to take to pay back the loan. It also spells out how often you\u2019ll make payments, such as weekly, bi-weekly or monthly.<\/li>\n\n\n\n<li class=\"\"><strong>Interest rate.<\/strong> A lower interest rate can save you a substantial amount of money over the course of your loan. This section should also specify whether your <a href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/personal-loan-rates-canada\">loan\u2019s interest rate<\/a> is fixed (won\u2019t change over the term) or variable (changes based on the lender\u2019s <a href=\"https:\/\/www.nerdwallet.com\/ca\/banking\/prime-rate-in-canada-explained\">prime rate<\/a>).<\/li>\n\n\n\n<li class=\"\"><strong>Fees.<\/strong> Extra fees are more common with alternative lenders. They may also be difficult to understand, so don\u2019t be afraid to ask for clarification. Fees can include late payment fees, early prepayment fees and loan establishment fees \u2014 which can add up significantly as it can be a percentage of your overall loan.<\/li>\n\n\n\n<li class=\"\"><strong>Borrowing limits.<\/strong> Each lender has a minimum and maximum amount that you can borrow. Check the loan agreement for the amount you\u2019re borrowing and make sure it\u2019s not more than you need \u2014 or can afford to pay back.<\/li>\n\n\n\n<li class=\"\"><strong>Collateral requirements.<\/strong> Some lenders may give you the option of providing an asset as collateral to secure your loan, which could result in a lower interest rate. Unsecured loans are easier to get but typically have higher interest rates.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Alternatives to personal loans<\/h2>\n\n\n\n<p class=\"\">If your application isn\u2019t approved, or you\u2019re wary of borrowing a large lump sum, these alternatives to taking out a personal loan may be worth considering.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Personal line of credit<\/h3>\n\n\n\n<p class=\"\">A <a href=\"https:\/\/www.nerdwallet.com\/ca\/banking\/what-is-line-of-credit\">personal line of credit<\/a> is similar to a personal loan in that you\u2019re borrowing money, but instead of a lump sum, you can borrow only as much as you need at a time. This borrowing option can potentially save you money because you\u2019ll only pay interest on the money you withdraw from the account \u2014 not on the full amount you\u2019re approved to borrow.<\/p>\n\n\n\n<p class=\"\">With a <a href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/personal-loan-vs-line-of-credit\">line of credit<\/a>, you\u2019ll need to make minimum required payments, and you can pay back the full amount owing at any time. However, these flexible repayment terms can make it tempting to overspend or take longer than you really need to pay off what you owe.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Credit cards<\/h3>\n\n\n\n<p class=\"\"><a href=\"https:\/\/www.nerdwallet.com\/ca\/credit-cards\/best-credit-cards-in-canada\">Credit cards<\/a> are another alternative to personal loans. With a credit card, you charge purchases to the card and enjoy an interest-free grace period of about 21 days. When the payment is due, you can pay the minimum required amount or up to the full balance on your statement.<\/p>\n\n\n\n<p class=\"\">However, credit cards come with high interest rates \u2014 typically much higher than those of personal loans. If you don\u2019t pay off the balance in full each month, the high interest rate can cause your debt to grow very quickly.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Borrow from family or friends<\/h3>\n\n\n\n<p class=\"\">Borrowing money from family or friends is an age-old option. Your loved ones may not even charge you interest, which could save you a significant amount. However, defaulting on the debt or missing repayments could cause a major rift in a relationship.<\/p>\n\n\n\n<p class=\"\">It\u2019s a good idea to make your agreement official by writing down the terms of this loan and agreeing how and when you\u2019ll repay it \u2014 and what will happen if you\u2019re late.<\/p>\n\n\n\n<div class=\"wp-block-nerdwallet-blocks-faq c-block-faq\" itemscope itemtype=\"https:\/\/schema.org\/FAQPage\"><div class=\"c-block-faq__wrapper\"><div class=\"c-block-faq__header\"><h2 class=\"c-block-faq__title\"><\/h2><\/div><div class=\"c-block-faq__section-list\">\n<div class=\"wp-block-nerdwallet-blocks-faq-section\"><div class=\"c-block-faq-section c-block-accordion-wrapper\"><div class=\"c-block-accordion__header\"><h3 class=\"c-block-accordion__title\">Frequently asked questions about personal loans<\/h3><\/div><div class=\"c-block-accordion-list\">\n<div class=\"c-block-faq-item c-block-accordion-item c-block-accordion-item--active\" itemscope itemprop=\"mainEntity\" itemtype=\"https:\/\/schema.org\/Question\"><div class=\"c-block-accordion-item__header\"><div class=\"c-block-accordion-item__title\" itemprop=\"name\">What is a personal loan and how does it work?<\/div><\/div><div class=\"c-block-accordion-item__content\" itemscope itemprop=\"acceptedAnswer\" itemtype=\"https:\/\/schema.org\/Answer\"><div class=\"wp-block-nerdwallet-blocks-faq-item\" itemprop=\"text\">\n<p class=\"\">Personal loans, also known as consumer loans allow you to borrow funds from a lender to cover personal expenses or consolidate higher-interest debt. When you take out a loan from a bank, credit union or an alternative lender, you must pay back the borrowed money with interest over agreed regular payments.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"c-block-faq-item c-block-accordion-item c-block-accordion-item--active\" itemscope itemprop=\"mainEntity\" itemtype=\"https:\/\/schema.org\/Question\"><div class=\"c-block-accordion-item__header\"><div class=\"c-block-accordion-item__title\" itemprop=\"name\">What documents do I need to apply for a personal loan?<\/div><\/div><div class=\"c-block-accordion-item__content\" itemscope itemprop=\"acceptedAnswer\" itemtype=\"https:\/\/schema.org\/Answer\"><div class=\"wp-block-nerdwallet-blocks-faq-item\" itemprop=\"text\">\n<p class=\"\">The documents required for a personal loan application are:<\/p>\n\n\n\n<ul class=\"\">\n<li class=\"\">Completed application form.<\/li>\n\n\n\n<li class=\"\">Government-issued identification.<\/li>\n\n\n\n<li class=\"\">Proof of address.<\/li>\n\n\n\n<li class=\"\">Proof of income or employment.<\/li>\n<\/ul>\n<\/div><\/div><\/div>\n<\/div><\/div><\/div>\n<\/div><\/div><\/div>\n\n\n\n\n\n\t<section class=\"c-block-card-grid container\"\n\t\t\t>\n\t\t\t\t\t<h4 class=\"c-block-card-grid__title\">\n\t\t\t\tDIVE EVEN DEEPER\t\t\t<\/h4>\n\t\t\n\t\t<div class=\"c-block-card-grid-scroll column-four\">\n\t\t\t<div class=\"c-block-card-grid-scroll__column\">\n<div id=\"post-13022\" class=\"c-block-card post-13022 page type-page status-publish has-post-thumbnail hentry content-classification-personal-finance topic-personal-finance cluster-personal-finance\">\n\t<div class=\"c-block-card__inner c-block-card__inner--large\">\n\t\t\t<a class=\"c-block-card__image-wrapper\" href=\"https:\/\/www.nerdwallet.com\/ca\/personal-finance\/canada-post-mymoney-loan-goes-national\" rel=\"bookmark\">\n\t\t<img loading=\"lazy\" width=\"435\" height=\"290\" decoding=\"async\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2022\/10\/GettyImages-1157640216-435x290.jpg\" class=\"c-block-card__image wp-post-image\" alt=\"Canada Post MyMoney Loan Goes National: What to Know Before You Borrow\" \/>\t<\/a><!-- .c-entry__thumbnail -->\n\t\t\t<div class=\"c-block-card__content-wrapper\">\n\t\t\t\n<h4 class=\"c-block-card__title\">\n\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/personal-finance\/canada-post-mymoney-loan-goes-national\" rel=\"bookmark\" class=\"c-block-card__title-link\">\n\t\tCanada Post MyMoney Loan Goes National: What to Know Before You Borrow\t<\/a>\n<\/h4>\n\n\t<div class=\"c-block-card__content\">\n\t\t<p>The MyMoney Loan offers up to $30,000 in financing with a max of seven years for repayment, but be sure you account for high interest rates before applying.<\/p>\n\t<\/div>\n\n\t<div class=\"c-block-card__authors\">\n\t\t\t\t<div class=\"nw-written-by-layout-inline\">\n\t\t\t\n\t\t\t<div class=\"nw-written-by-layout-inline--wrapper\">\n\t\t\t\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/clay-jarvis\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2022\/03\/IMG_20220329_114424-150x150.jpg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Clay Jarvis<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div><!-- .c-card__content-wrapper -->\n\t<\/div>\n<\/div><!-- #post-13022 -->\n<\/div><div class=\"c-block-card-grid-scroll__column\">\n<div id=\"post-15538\" class=\"c-block-card post-15538 page type-page status-publish has-post-thumbnail hentry content-classification-loans topic-personal-loans cluster-personal-loans\">\n\t<div class=\"c-block-card__inner c-block-card__inner--large\">\n\t\t\t<a class=\"c-block-card__image-wrapper\" href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/personal-loan-rates-canada\" rel=\"bookmark\">\n\t\t<img loading=\"lazy\" width=\"460\" height=\"192\" decoding=\"async\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2022\/11\/Personal-Loan-Rates-in-Canada-feature-image-e1668454556700-460x192.jpg\" class=\"c-block-card__image wp-post-image\" alt=\"Personal Loan Rates in Canada\" \/>\t<\/a><!-- .c-entry__thumbnail -->\n\t\t\t<div class=\"c-block-card__content-wrapper\">\n\t\t\t\n<h4 class=\"c-block-card__title\">\n\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/personal-loan-rates-canada\" rel=\"bookmark\" class=\"c-block-card__title-link\">\n\t\tPersonal Loan Rates in Canada\t<\/a>\n<\/h4>\n\n\t<div class=\"c-block-card__content\">\n\t\t<p>Personal loan interest rates can be either fixed or variable. Your rate depends on factors like your income, credit score, term, type of loan and more.<\/p>\n\t<\/div>\n\n\t<div class=\"c-block-card__authors\">\n\t\t\t\t<div class=\"nw-written-by-layout-inline\">\n\t\t\t\n\t\t\t<div class=\"nw-written-by-layout-inline--wrapper\">\n\t\t\t\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/clay-jarvis\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2022\/03\/IMG_20220329_114424-150x150.jpg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Clay Jarvis<\/a><a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/sandra-macgregor\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/07\/Sandra-MacGregor-e1626212852416-40x40.jpg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Sandra MacGregor<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div><!-- .c-card__content-wrapper -->\n\t<\/div>\n<\/div><!-- #post-15538 -->\n<\/div><div class=\"c-block-card-grid-scroll__column\">\n<div id=\"post-15760\" class=\"c-block-card post-15760 page type-page status-publish has-post-thumbnail hentry content-classification-loans topic-personal-loans cluster-personal-loans\">\n\t<div class=\"c-block-card__inner c-block-card__inner--large\">\n\t\t\t<a class=\"c-block-card__image-wrapper\" href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/what-is-an-unsecured-personal-loan\" rel=\"bookmark\">\n\t\t<img loading=\"lazy\" width=\"460\" height=\"192\" decoding=\"async\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2022\/11\/Unsecured-Personal-Loan-feature-image-e1668469043796-460x192.jpg\" class=\"c-block-card__image wp-post-image\" alt=\"What is an Unsecured Personal Loan?\" \/>\t<\/a><!-- .c-entry__thumbnail -->\n\t\t\t<div class=\"c-block-card__content-wrapper\">\n\t\t\t\n<h4 class=\"c-block-card__title\">\n\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/what-is-an-unsecured-personal-loan\" rel=\"bookmark\" class=\"c-block-card__title-link\">\n\t\tWhat is an Unsecured Personal Loan?\t<\/a>\n<\/h4>\n\n\t<div class=\"c-block-card__content\">\n\t\t<p>An unsecured personal loan doesn\u2019t require collateral and typically has a faster approval process. However, it may come with higher interest rates.<\/p>\n\t<\/div>\n\n\t<div class=\"c-block-card__authors\">\n\t\t\t\t<div class=\"nw-written-by-layout-inline\">\n\t\t\t\n\t\t\t<div class=\"nw-written-by-layout-inline--wrapper\">\n\t\t\t\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/sandra-macgregor\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/07\/Sandra-MacGregor-e1626212852416-40x40.jpg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Sandra MacGregor<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div><!-- .c-card__content-wrapper -->\n\t<\/div>\n<\/div><!-- #post-15760 -->\n<\/div><div class=\"c-block-card-grid-scroll__column\">\n<div id=\"post-15712\" class=\"c-block-card post-15712 page type-page status-publish has-post-thumbnail hentry content-classification-loans topic-personal-loans cluster-personal-loans\">\n\t<div class=\"c-block-card__inner c-block-card__inner--large\">\n\t\t\t<a class=\"c-block-card__image-wrapper\" href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/personal-loan-vs-line-of-credit\" rel=\"bookmark\">\n\t\t<img loading=\"lazy\" width=\"460\" height=\"192\" decoding=\"async\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2022\/11\/Personal-Loan-vs-Line-of-Credit-feature-image-e1668461522356-460x192.jpg\" class=\"c-block-card__image wp-post-image\" alt=\"Personal Loan vs. Line of Credit: How to Choose\" \/>\t<\/a><!-- .c-entry__thumbnail -->\n\t\t\t<div class=\"c-block-card__content-wrapper\">\n\t\t\t\n<h4 class=\"c-block-card__title\">\n\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/personal-loan-vs-line-of-credit\" rel=\"bookmark\" class=\"c-block-card__title-link\">\n\t\tPersonal Loan vs. Line of Credit: How to Choose\t<\/a>\n<\/h4>\n\n\t<div class=\"c-block-card__content\">\n\t\t<p>The difference between a line of credit and a loan is that a loan is borrowed as a lump sum, while a line of credit can be used and repaid on an ongoing basis.<\/p>\n\t<\/div>\n\n\t<div class=\"c-block-card__authors\">\n\t\t\t\t<div class=\"nw-written-by-layout-inline\">\n\t\t\t\n\t\t\t<div class=\"nw-written-by-layout-inline--wrapper\">\n\t\t\t\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/sandra-macgregor\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/07\/Sandra-MacGregor-e1626212852416-40x40.jpg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Sandra MacGregor<\/a><a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/clay-jarvis\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2022\/03\/IMG_20220329_114424-150x150.jpg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Clay Jarvis<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div><!-- .c-card__content-wrapper -->\n\t<\/div>\n<\/div><!-- #post-15712 -->\n<\/div>\t\t<\/div>\n\t<\/section>\n\n","protected":false},"excerpt":{"rendered":"<p>A personal loan allows you to borrow money from a bank, credit union or alternative lender. The loan accrues interest and has a set repayment schedule.<\/p>\n","protected":false},"author":27,"featured_media":15520,"parent":15647,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"page-templates\/article-sidebar.php","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"apple_news_api_created_at":"","apple_news_api_id":"","apple_news_api_modified_at":"","apple_news_api_revision":"","apple_news_api_share_url":"","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":"[]","apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":"","_nw_pros_cons_block_schema":""},"content-classification":[337],"topic":[338],"cluster":[339],"pp_author":[24],"acf":[],"apple_news_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Personal Loans Work in Canada - NerdWallet<\/title>\n<meta name=\"description\" content=\"A personal loan allows you to borrow money from a bank, credit union or alternative lender. The loan accrues interest and has a set repayment schedule.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.nerdwallet.com\/ca\/loans\/what-is-a-personal-loan\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Personal Loans Work in Canada - NerdWallet\" \/>\n<meta property=\"og:description\" content=\"A personal loan allows you to borrow money from a bank, credit union or alternative lender. The loan accrues interest and has a set repayment schedule.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.nerdwallet.com\/ca\/loans\/what-is-a-personal-loan\" \/>\n<meta property=\"og:site_name\" content=\"NerdWallet Canada\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/NerdWallet\" \/>\n<meta property=\"article:modified_time\" content=\"2024-05-06T21:16:31+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2022\/11\/personal-loan-feature-image-e1668448682619.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2121\" \/>\n\t<meta property=\"og:image:height\" content=\"885\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@NerdWallet\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"7 minutes\" \/>\n\t<meta name=\"twitter:label2\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data2\" content=\"Sandra MacGregor\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/loans\/what-is-a-personal-loan\",\"url\":\"https:\/\/www.nerdwallet.com\/ca\/loans\/what-is-a-personal-loan\",\"name\":\"How Personal Loans Work in Canada - NerdWallet\",\"isPartOf\":{\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/#website\"},\"datePublished\":\"2022-11-14T17:36:00+00:00\",\"dateModified\":\"2024-05-06T21:16:31+00:00\",\"description\":\"A personal loan allows you to borrow money from a bank, credit union or alternative lender. 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