Frequently asked questions
Frequently asked questions
Clear answers to what Canadians actually ask about personal loans, credit scores, debt consolidation, and how Prêtwise works. We are not a lender — we compare and inform, for free.
Personal loans
What is a personal loan?+
It is a lump sum you borrow and repay in regular instalments over a set period, at a fixed or variable rate. The funds are not tied to any asset, so you can use them for an unexpected cost, a project, or to consolidate higher-cost debt.
What interest rate can I expect?+
In Canada, the effective annual rate on a personal loan generally runs from about 7% to 35%+, depending on your credit score, income, and the lender. Strong credit can reach below 10%; weaker credit pushes rates noticeably higher.
How much can I borrow?+
Personal loans often range from $1,000 to $50,000. The actual amount depends on your income, existing debts, and debt-to-income ratio. Lenders want to see that the new payment stays affordable within your budget.
Do I need good credit?+
Good credit helps you get better rates, but it is not an absolute requirement. Some lenders serve people with fair or poor credit, usually at a higher rate. Always compare the total cost before you commit.
How fast will I get the money?+
It ranges from a few hours to a few business days depending on the lender and when you are approved. Online lenders often fund by direct deposit faster than traditional institutions.
Can I pay off my loan early?+
Often yes, and paying it off sooner reduces the interest you pay. Check your contract for any prepayment penalty before making an extra payment.
Credit score
What is a good credit score in Canada?+
Scores range from 300 to 900. Generally, 660 and up is considered good, 725+ very good, and 760+ excellent. The higher your score, the better the rates and amounts you are offered.
How can I check my score for free?+
Your data is held by Equifax and TransUnion, Canada’s two credit bureaus. You can get your report from them for free, and many banks and apps show your score at no cost.
Does comparing lenders on Prêtwise affect my score?+
No. Browsing and comparing lenders on Prêtwise has no impact on your credit score. A real credit check (a “hard” inquiry) only happens when you apply directly with a lender.
How can I improve my score quickly?+
Pay every bill on time, keep your credit utilization under 30%, avoid opening several accounts at once, and fix any errors on your report. Gains take a few billing cycles to show up.
What lowers my score?+
Late payments, high utilization, many hard inquiries close together, accounts in collections, and a short credit history all weigh on your score.
Debt consolidation & debt
What is debt consolidation?+
It means combining several balances — credit cards, loans, lines of credit — into a single loan with one monthly payment. The goal is to lower your average rate and simplify your budget.
Is it a good idea for me?+
Consolidation helps most when the new rate is lower than the average of your current debts and you do not run the balances back up afterward. If cards are at 20%+ and the consolidation loan is well below that, the savings can be significant.
Consolidation or a consumer proposal?+
A consolidation loan pays your debts in full at a better rate. A consumer proposal, filed through a Licensed Insolvency Trustee, reduces the amount you owe but marks your record. Consolidation suits manageable debt; a proposal suits a heavier situation.
Avalanche or snowball method?+
The avalanche targets the highest-rate debt first (lowest total cost); the snowball clears the smallest balance first (faster motivation). Both work — pick the one you will stick with.
How do I know if my debt is too high?+
A good gauge is your debt-to-income ratio: lenders often grow concerned above 40%. If you can only make minimum payments or you borrow to cover essentials, it is time to act.
Fast loans & micro-loans
What is a micro-loan?+
It is a small amount, often $300 to $2,000, funded quickly for an unexpected expense. That speed comes at a cost: rates and fees are higher than a standard personal loan. Only borrow what you can repay in the short term.
Are there e-Transfer loans?+
Yes. Some online lenders send funds by Interac e-Transfer, sometimes the same day. Always check the effective annual rate and fees, which are often high on this kind of fast financing.
I need emergency cash — what are my options?+
Depending on your situation, a small personal loan, a cash advance, or a line of credit can cost far less than a payday loan. Compare the total cost before choosing the fastest option.
Are payday loans worth it?+
Rarely. Their cost, expressed as an annual rate, often exceeds 300%, and they can create a cycle of debt. Rules and fee caps vary by province. Explore alternatives first.
How do I spot a loan scam?+
Be wary of any lender that demands upfront “fees,” guarantees approval with no checks, pressures you, or communicates unprofessionally. A legitimate lender in Canada never asks for payment before funding a loan.
Applying, eligibility & provinces
What documents do I need to apply?+
Typically: valid ID, proof of income (pay stubs or bank statements), proof of address, and your bank account details for the deposit. Self-employed applicants often provide notices of assessment or financial statements.
Can I check eligibility without affecting my score?+
Yes. Our eligibility checker gives you a sense of your options from a few details, with no hard inquiry. An inquiry only happens when you formally apply with a lender.
Do the rules differ by province?+
Yes. Consumer credit is regulated provincially: payday loan fee caps, for example, vary from one province to another (Quebec, Ontario, Alberta, B.C., etc.). Always check the rules that apply where you live.
Can I get a loan as a newcomer to Canada?+
Yes, even without a long Canadian credit history. Some lenders and programs are built for newcomers; building credit early (a secured card, on-time payments) widens your options.
About Prêtwise
Is Prêtwise free?+
Yes, completely. Comparing lenders, using our tools, and reading our guides costs nothing. We never charge you a fee.
Is Prêtwise a lender?+
No. Prêtwise is not a lender and does not issue loans. We are an independent platform that compares Canadian lenders and explains credit in plain language, so you can choose with confidence.
How do you make money?+
We may receive a referral fee from a lender when you choose to visit them from our site — at no extra cost to you. It does not change the rate a lender offers you and does not influence our transparent presentation of the options.
Do you provide personalized financial advice?+
No. We offer general information and comparison tools, not advice tailored to your situation. For a personalized recommendation, consult a licensed advisor.
How do you choose the lenders you show?+
We present a transparent list of Canadian lenders with their amounts, rates, and provinces served. You choose — we never auto-route anyone to a specific lender.
How do I contact you?+
Have a question about a guide, a tool, or a lender? Write to us and we will get back to you quickly.