Are you interested in finding out how many people take out personal loans in Canada? Do you want to know which lenders are among the most popular?
Then you’ve come to the right place!
Many people need some extra money every once in a while to pay the bills, buy products they like or need urgently, and so on.
But the thing is:
Most people also need these assets as soon as possible. And that’s where online lenders come into the picture.
So, we dug deep into the latest personal loan statistics for Canada.
Here’s a preview of what we found:
Fascinating Personal Loan Rates and Canada Loan Stats (Editor’s Choice)
- Around 41% of surveyed Canadians took out a personal loan to buy a car.
- 35% of Generation Z Canadians plan to get a personal loan in 2021.
- 13% of Canadians get personal loans to pay off their credit cards.
- More than three million Canadians have home equity lines of credit.
- In 2019, 73% of Canadians had some type of outstanding debt.
- Around 15% of Canadians use personal loans for debt consolidation.
- Men (28.72%) are more likely to get a personal loan than women (18%).
Canadian Personal Finance Statistics
1. 26% of Canadian plan to take out a loan in 2021.
2020 was incredibly difficult for many business owners and ordinary Canadians feeling the pandemic’s financial strain. According to personal loan statistics for Canada from 2021, roughly 7.3 million (one-quarter) of Canadians intend to get a loan in 2021.
Around 12.84% plan to get a personal loan, while 2.21% plan to take out a business loan. Finally, 10% are planning on getting both.
2. With 28.72%, men are more likely to get a personal loan than women.
In 2021, Canadian men are more likely to get a loan than women (18%). Also, almost one-third of men said that it is either likely (19%) or very likely (12%) to get a personal loan.
3. 35% of Generation Z Canadians plan to get a personal loan in 2021.
Over one-third (35%) of Gen Z Canadians have plans to take out a personal loan. Millennials are just behind them, with 32%. Generation X are third, with 17%. But while gen Z are the ones that are planning to get a loan, Millennials are the ones who think that they are more likely to need one.
With only 8.29%, Boomers are least likely to be looking for funds.
Why is that?
Because they’re financially stable and far less in a need of emergency funds.
4. 29% of Canadians in the province of Saskatchewan plan to get a personal loan.
As per the personal loan statistics for Canada from 2020, almost a third of Saskatchewanians said they plan to get a loan.
After Saskatchewan, the provinces with the highest percentage were Quebec (27%) and Alberta (25%). Canadians who earn between $100,000 and $190,000 are more likely to get a small personal loan.
5. According to Statistics Canada, the household debt ratio rose 170.7% in 2020.
(Source: BNN Bloomberg)
In Q3 2020, Canadian household debt as a percentage of disposable income stood at 170.7%, up from 168.8% in Q2.
With the restrictions from the pandemic causing people to stay at home and spend less, Canadian households were able to pay some of their consumer debt. During the lockdowns, household savings reached a record high of $90.1 billion.
6. There are around six million Canadian owners with mortgages.
(Source: Canadian Mortgage Trends)
Out of 9.91 million Canadians who are homeowners, six million have mortgages. In 2020, mortgage borrowing reached record high numbers, with households adding around a whopping $108 billion of mortgage debt. The home loan interest rates in Canada average at 3.14%, up by 0.05% from the average recorded in 2018.
7. In 2019, 73% of Canadians had some type of outstanding debt.
Personal loan statistics for Canada from 2019 show that nearly three-quarters of Canadians had some type of outstanding loan and outstanding debt at some point. Additionally, around one-third of Canadians believe that they have too much debt.
8. 19% of all household debt comes from lines of credit.
(Source: CBA & Canada)
The majority of Canadians are responsible borrowers who use credit wisely. After the mortgage, a home equity line of credit (HELOC) is the largest contributor to household debt in Canada.
Some of the reasons why borrowers use HELOC are home renovations, debt consolidation, education, and training expenses. Alarmingly, although HELOCs are widely used, many borrowers appear to lack awareness of the terms and conditions.
9. According to personal loan statistics for Canada, more than three million Canadians have home equity lines of credit.
(Source: CBC & Canada)
According to a survey by the Financial Consumer Agency of Canada (FCAC), around 35% of Canadians have a home equity line of credit.
19% of them said that they had borrowed more than they intended. The average line of credit interest rates in Canada depends on how they’re set up. Usually, though, they’re based on the lender’s prime interest rate.
Canada Personal Loan Rates
10. Around 41% of surveyed Canadians took out a personal loan to buy a car.
Buying a car is the number one reason why Canadians take out a personal loan. Other reasons to take out a personal loan include debt consolidation, mortgage, home improvements, etc. The average auto loan interest rates in Canada start at 4.38%.
However, we have to point out that this does not necessarily mean everyone will get this rate. When it comes to deciding Canada interest rates, lenders consider the credit score, the debt-to-income ratio, employment stability, and the current state of the economy.
11. The total, funds advanced, residential, and insured mortgages in October 2020 equaled $13.423 billion, at a 2.2% interest rate.
(Source: 150 Stat Canada)
According to the Canadian loan interest rates, the corresponding numbers in February 2021 were $8,885 billion, at an interest rate of 2.06%.
The figure for variable rate, funds advanced, residential, and insured mortgages, was $1,827 billion, at an interest rate of 2.10% in October 2020. In February 2021, it amounted to $1,293 billion, at an interest rate of 1.77%.
12. Around 15% of Canadians use personal loans for debt consolidation.
Consolidating your debt means combining multiple debts into one single debt. According to Finder’s survey, 15% of Canadians using personal loans to do just that.
Why do they do that?
It’s quite simple:
The hope to get lower interest rates. Since personal loan interest rates in Canada depend on the lender, they range considerably between 10% and 45%.
13. 13% of Canadians get personal loans to pay off their credit cards.
(Source: Finder & Statista)
Paying off their credit cards is the fourth most common reason why Canadians take out personal loans. As we mentioned earlier, the most common reason for a loan is vehicle purchase, followed by financing a mortgage and debt consolidation.
Check this out:
According to Statista, Canada issued a massive 79.6 million credit cards in 2018. Currently, there are many low-interest-rate cards on the personal loans market. The average credit card interest rate in Canada on over 30 of them is 13%.
All in all, personal loans are one of the most popular financial tools among Canadians, as the latest personal loan statistics for Canada reveal.
The thing is:
Personal loan rates in Canada are pretty competitive, and they offer the opportunity to cover a variety of expenses.
The good news is:
There are many lenders in Canada that offer this type of product that will certainly meet your unique needs.
The interest rates will ultimately depend on the lender that you end up choosing, as well as your credit score and debt-to-income ratio. The average personal loan interest rate is between 15% and 45%.
The average Canadian owed up to $73,532 in 2020. In fact, according to Equifax Canada, the total consumer debt increased by 2.8% to $1.99 trillion in Q2 2020.
The average credit loans percentage on a 24-month personal loan is 20%-30%. Your credit score is one of the largest determining factors. The higher your score, the lower your rate will be.
There are a variety of Canadian lenders that offer different types of loans. According to the latest personal loan statistics for Canada, the most common are mortgage loans, short-term loans, cash loans and advances, unsecured personal loans Canada, and secured loans.