Secured Loans · Canada
Secured Loans in Canada
A secured loan is a loan backed by an asset, called collateral, that the lender can claim if you do not repay. In Canada that asset is often home equity, a vehicle or savings, and the pledge usually lowers the cost compared with an unsecured loan. The trade-off is that default can mean losing the asset, so the decision deserves care.
- Product family Secured Loans
- Availability Canada-wide, licence-dependent
- Cost basis Lender-set, within federal limits
- Where it is regulated Federal ceiling + provincial rules
What makes a loan secured
A secured loan is backed by an asset the lender can claim if you do not repay. That asset, called collateral, lowers the lender's risk, which usually means a lower cost than an unsecured loan. The catch is that the risk does not disappear; it moves to you. Default can mean losing the thing you pledged.
Common kinds of collateral in Canada
- Home equity. The largest and cheapest source for many borrowers, and the most serious to lose.
- A vehicle. Common for car loans and for some personal loans.
- Savings or investments. Some lenders will lend against a deposit you hold with them.
- Business assets or equipment. Used when the borrowing is for a business.
Secured versus unsecured
An unsecured loan relies on your promise and your credit history alone. It is simpler, and nothing you own is directly on the line, but it usually costs more and the amount offered may be smaller. A secured loan can unlock a larger amount, and sometimes a yes where an unsecured application would be declined.
If your home is the collateral, the limits matter. A home equity line of credit at a federally regulated lender is generally capped at 65% of appraised property value, with total secured lending usually limited to 80%. The OSFI Guideline B-20 explains the underwriting approach those lenders use, and the FCAC — debt and borrowing guidance is a good place to review how different debts behave.
Questions to ask before you pledge an asset
- Can you keep repaying if rates rise or your income dips?
- What exactly happens if you miss a payment?
- Could you borrow less and keep the asset out of it?
- Is the cost genuinely lower once every fee is counted?
How LoanGoose helps
LoanGoose is a loan matching and comparison service, not a lender. We do not lend, set rates or approve anyone. We help you understand the categories of secured borrowing so you can compare them with unsecured options. Whether pledging an asset is wise depends on your circumstances, and a licensed professional should be part of that decision.
LoanGoose is a loan matching and comparison service, not a lender. The lowest rates are only available to the most qualified applicants.
What it costs
| Rule | Figure | What it means | Publisher |
|---|---|---|---|
| Home equity line of credit limit (federally regulated lender) | 65% of appraised value | Total secured lending against the property is usually capped at 80%. | Office of the Superintendent of Financial Institutions |
| Mortgage qualification — total debt service | about 44% | A stress-test rate above the contract rate is applied too (Guideline B-20). | Office of the Superintendent of Financial Institutions |
| Criminal rate of interest (federal ceiling) | 35% per year | Above this, an agreement is a criminal offence. | Government of Canada (Justice Laws) |
No amount, term or rate is attached to any link on this page. Anything a lender offers you depends on your file and their own criteria.
What you need before you compare
- Your goal in one sentence. The amount, the date you need it, and the date you can repay it.
- Your real monthly surplus. What is genuinely left after every fixed cost — not what you hope is left.
- A current picture of your credit file. You can request a free copy of your report from each national bureau, and correcting an error is free.
- Every existing debt and its rate. Consolidation maths only works when you can see the whole board.
- The total cost of each option. Compare total repayment, not the headline rate.
- A check that the lender is licensed. Federally regulated banks fall under FCAC; provincial regulators license most other lenders.
Rules where you live
| Province or territory | Payday lending status | Local page |
|---|---|---|
| Newfoundland and Labrador | Licensed regime — federal cap applies | Secured Loans in Newfoundland and Labrador |
| Prince Edward Island | Licensed regime — federal cap applies | Secured Loans in Prince Edward Island |
| Nova Scotia | Licensed regime — federal cap applies | Secured Loans in Nova Scotia |
| New Brunswick | Licensed regime — federal cap applies | Secured Loans in New Brunswick |
| Quebec | Payday lending not licensed | Secured Loans in Quebec |
| Ontario | Licensed regime — federal cap applies | Secured Loans in Ontario |
| Manitoba | Licensed regime — federal cap applies | Secured Loans in Manitoba |
| Saskatchewan | Licensed regime — federal cap applies | Secured Loans in Saskatchewan |
| Alberta | Licensed regime — federal cap applies | Secured Loans in Alberta |
| British Columbia | Licensed regime — federal cap applies | Secured Loans in British Columbia |
| Yukon | Province-dependent | Secured Loans in Yukon |
| Northwest Territories | Province-dependent | Secured Loans in Northwest Territories |
| Nunavut | Province-dependent | Secured Loans in Nunavut |
Provincial rules change. Confirm the current position with the regulator before relying on it — see the sourced rules table.
Compare secured loans options
This is a matching step, not an application with us — we are not a lender. Checking does not commit you to anything, and no amount, term or rate is promised here.
LoanGoose is a loan matching and comparison service, not a lender. We do not make loans, set rates or make credit decisions. We may earn a commission when you click or apply through our links. The lowest rates are only available to the most qualified applicants.
Questions people actually ask
What can I use as collateral for a secured loan?
Homes, vehicles, savings and investments, and business equipment are all common. The lender wants an asset it can value and sell if you default. Some lenders accept only certain types, so ask before you apply rather than after.
Is a secured loan cheaper than an unsecured loan?
Usually, because the collateral lowers the lender's risk. That does not make it cheap in every case, since fees and terms vary widely. The <a href="https://www.canada.ca/en/financial-consumer-agency/services/loans/personal-loans.html">FCAC — personal loans</a> page explains the total cost disclosure you should compare across offers.
What happens if I default on a secured loan?
The lender can take and sell the asset to recover what you owe. If the sale does not cover the debt, you may still owe the difference, and collection activity can follow. That is why pledging a home deserves far more caution than pledging a savings account.
Can I get a secured loan with poor credit?
Often yes, because the asset carries the risk. The cost will usually be higher than for a borrower with a strong file, and some lenders will consider only certain kinds of collateral. Compare the total cost carefully before you agree to anything.
Should I use my home as collateral?
Only if you are confident the payments stay affordable if rates rise or your income dips. A home equity line of credit at a federally regulated lender is generally capped at 65% of appraised property value, with total secured lending usually limited to 80%. The <a href="https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-b-20">OSFI Guideline B-20</a> describes that approach.
How is an unsecured loan different?
An unsecured loan relies on your credit history and income alone, with nothing you own pledged against it. It is simpler and safer for you, but it usually costs more and the amount available may be smaller. The <a href="https://www.canada.ca/en/financial-consumer-agency/services/debt.html">FCAC — debt and borrowing</a> guidance covers how these debts behave.
Where to go next
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Personal Loans
Compare personal loan offers from Canadian lenders and see what fits your budget.
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Payday Loans
How payday loans work in Canada, what they cost, and why cheaper options are worth checking.
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Cash Advances
What a cash advance really costs, and how it differs from a short-term loan or an instalment loan.
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Instalment Loans
Compare instalment loans with fixed payments spread over a set schedule you agree to up front.
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Short-Term Loans
Compare short-term loan options in Canada and see how repayment timing drives the real cost.
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Loans for Bad Credit
How borrowing works when your credit history is uneven, and what to check before you apply.
All loan types · Borrowing by province · Calculators
Sources for this page
- OSFI Guideline B-20 — residential mortgage underwriting —
- Criminal Code s. 347 — criminal rate of interest —
- FCAC — debt and borrowing —
Every figure on this page is attributed to the publisher above. Where a value could not be verified against the publisher's own publication, it is left out rather than estimated.