Compare offers on total cost of borrowing, not the advertised rate
The advertised rate is the price of one component of a loan, not the price of the loan. Total cost of borrowing is what you pay in interest plus every fee, measured against the amount you actually receive and the schedule you actually pay. Two offers quoting the same rate can land in different places if one adds an origination or administration fee, if interest is compounded differently, or if one stretches repayment over a longer term so you pay more interest in total.
loanmoose.ca is not a lender and does not make credit decisions. It matches and compares. That matters here, because every number on an offer you receive comes from the lender that underwrites you, and the version that counts is the written disclosure you are given before you sign.
The Financial Consumer Agency of Canada explains how personal loans work in Canada and what lenders must disclose to you, including the cost of borrowing. Treat that disclosure as your source document when you compare, not a marketing page.
How to read two offers side by side
Put the two documents next to each other and pull the same six items out of each:
- Amount advanced. Not the amount you asked for — the amount that lands in your account, after any fee is deducted.
- Total cost of borrowing. The full dollar figure the lender is required to disclose, not the rate.
- Rate and how it is applied. Fixed or variable, and how often interest is compounded.
- Term and amortization. How long you are committed, and how long the balance actually takes to clear at the scheduled payment.
- Payment schedule. Weekly, biweekly, semi-monthly or monthly. Frequency changes the total interest even at the same rate.
- What happens if you pay early or late. Prepayment privileges, penalties, and any fee triggered by a missed or late payment.
Only then look at the rate. If one offer has the lower rate but a longer amortization, a fee you did not expect, or no prepayment privilege, it may cost more by the time you are finished. Someone shopping for the cheapest interest personal loan is usually comparing one number. The comparison that protects you uses the total.
The options you are actually comparing
Most offers in Canada fall into a handful of structures, and each one is priced and regulated differently. The table below contrasts them on the things that move total cost.
| Option | What secures it | What drives the cost | Rule or limit to check |
|---|---|---|---|
| Unsecured installment loan | Nothing — priced on your credit file, income and existing debts | Rate, lender fees, term length, payment frequency | Provincial licensing and disclosure rules; the federal criminal rate ceiling |
| Secured loan or home equity line of credit | Your home or another asset | Loan-to-value, appraised value, your credit file, fixed or variable pricing | At federally regulated lenders, a home equity line of credit is generally limited to 65% of appraised property value, with total secured lending usually capped at 80% |
| Payday loan | A post-dated cheque or pre-authorized debit | A flat cost per $100 advanced, not an annual rate | Generally up to $1,500 for a term of 62 days or less; federal cap of $14 per $100 advanced where a province licenses the model; lower provincial caps apply where they exist |
| Revolving credit draw | Nothing, or your home for a secured line | Interest rate, and how long you carry the balance | Revolving credit has no fixed payoff date unless you set one |
| Mortgage or refinance | Property | Contract rate, amortization, term, compounding | Canadian fixed-rate mortgages are compounded semi-annually by law; federally regulated lenders generally work to a total debt service ratio ceiling of about 44% and qualify an uninsured mortgage at the greater of the contract rate plus 2 percentage points and 5.25% |
Which terms are actually negotiable
Negotiability depends on the lender, the product and how your file looks to the underwriter. It is a conversation, not a right, and nothing obliges a lender to move. In general, the following are the terms most often open to discussion, and the ones after them usually are not.
Usually worth asking about:
- The interest rate, or the margin on a variable-rate product.
- Fees the lender controls, such as an administration or origination fee.
- Term and amortization, where the lender offers more than one.
- Payment frequency.
- Prepayment privileges — the right to pay extra, or pay the balance off, without a penalty.
- Whether security is required, and whether a co-signer or guarantor can be added.
Usually not negotiable:
- The criminal rate of interest. The Criminal Code s. 347 on the Government of Canada's Justice Laws website sets the criminal rate of interest at 35% per year. No lender can agree to a higher effective rate with you.
- Payday lending caps. Where a province operates a licensed payday lending regime, the federal Payday Lending Regulations (SOR/2024-114) cap the cost of borrowing at $14 per $100 advanced. Some provinces set a cap lower than $14 per $100, and the lower cap applies. Quebec does not license payday lending, which effectively prohibits the model there.
- Which regulator supervises the lender. Lending in Canada is licensed provincially, so the regulator and the rules differ depending on where you are and who is lending.
- Underwriting thresholds at federally regulated lenders, such as the total debt service ratio ceiling those mortgage lenders generally work to.
Benchmarks are not offers
The Bank of Canada publishes the policy interest rate, the prime rate, conventional mortgage rates and Government of Canada benchmark bond yields. These are benchmarks, not offers, and no lender is obliged to lend at them. When you see a rate quoted in a comparison table, check whether it is a benchmark, an advertised starting rate, or the rate you have actually been approved for. In most cases it is one of the first two.
The lowest rate personal loan at any given moment is a marketing position held by somebody, not a number you can rely on receiving. The lowest rates are only available to the most qualified applicants. If your file does not look like that applicant's file, the number you are offered will be different, and that is the number to compare with.
What decides your price
Before you can compare two offers fairly, you need to know which parts of your profile are driving the price. The main ones:
- Repayment history and current balances. Canada has two national credit reporting bureaus, Equifax Canada and TransUnion Canada. Lenders read one or both.
- Recent derogatory items. A consumer proposal stays on a credit report for 3 years after completion, or 6 years from filing, whichever comes first. A first bankruptcy stays on a credit report for 6 years after discharge.
- Income and affordability. A lender compares your income to your existing debt payments, not only to your score.
- Security. A secured loan is priced against an asset, so asset limits become borrowing limits. At federally regulated lenders, a home equity line of credit is generally limited to 65% of appraised property value, with total secured lending usually capped at 80%.
- Product type. A payday loan is generally up to $1,500 for a term of 62 days or less, and its cost of borrowing is expressed per $100 advanced rather than as an annual rate, so comparing it to an installment loan on rate alone tells you nothing useful.
If you are comparing across the market to find the best loans Canada offers for a file like yours, extract the same six items from every offer. Anything that cannot give you all six is not a comparable offer.
A short checklist before you sign
- Confirm the total cost of borrowing in dollars, and that it matches what you were quoted.
- Confirm the amount advanced after any fee is deducted.
- Confirm whether the rate is fixed or variable, and what it moves with if it is variable.
- Confirm the term, the amortization and the payment schedule.
- Confirm the prepayment terms in writing.
- Confirm who regulates the lender and where a complaint goes. Complaints about federally regulated financial institutions go to the Financial Consumer Agency of Canada; provinces license and supervise most other lenders.
- Confirm there is no penalty you cannot live with if a payment is late.
When the answer is not another loan
If every offer you receive prices your file as high risk, the more useful comparison may be between borrowing and not borrowing. A consumer proposal or a bankruptcy is not a product you shop for; only a licensed insolvency trustee can administer one. For decisions of that size, the right answer depends on your individual circumstances, and regulated professional advice — from a licensed insolvency trustee, a licensed credit counsellor or a lawyer — is worth more than another rate table.
At every stage, the number that matters is the total cost of borrowing against the amount advanced. Everything else is presentation.