Loans

Car loans, personal loans, credit cards

Canadian Loan and Credit Calculators

Personal lending in Canada includes car loans, personal lines of credit, student loans, credit cards, and home equity lines of credit (HELOCs). Interest rates vary dramatically: car loans typically range from 5–9%, personal loans from 7–15%, credit cards from 19.99–29.99%, and HELOCs at prime plus 0.5–1.5%.

Unlike mortgages, most Canadian consumer loans use monthly compounding. The Bank of Canada overnight rate (currently 2.75%) directly affects variable-rate products like HELOCs and lines of credit. Credit card interest compounds daily on unpaid balances, making them the most expensive form of borrowing.

Federal student loans in Canada now charge interest at the prime rate (no additional spread) and the interest paid qualifies for a non-refundable tax credit. The Repayment Assistance Plan (RAP) can reduce or eliminate payments for borrowers facing financial hardship.

Frequently Asked Questions

What is the best way to pay off debt?

Two proven methods: the avalanche method (pay highest-interest debt first, mathematically optimal) and the snowball method (pay smallest balance first, psychologically motivating). Either is better than paying only minimums.

Is a HELOC better than a personal loan?

HELOCs offer lower rates (prime + 0.5–1.5%) because they are secured by your home. However, they put your home at risk and the variable rate can increase. A fixed-rate personal loan offers certainty but at a higher cost.

How long to pay off a credit card paying only minimums?

On a $5,000 balance at 19.99% with 2.5% minimum payments, it takes over 30 years and costs more than $7,000 in interest — more than the original balance.