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What can $1,500, $5,000, $10,000, and $20,000 Personal Loans Do for You?

by Vinicius Rocha

What can $1,500, $5,000, $10,000, and $20,000 Personal Loans Do for You?

Table of contents:

Most common types of personal loans

Unexpected circumstances happen all the time in life. Things like emergency car repairs, health issues, and other non-budgeted expenses can come seemingly out of nowhere and squeeze the monthly financial budget that you worked so hard to maintain. At times, these expenses can rack up fairly quickly and go beyond the amount you can reasonably afford to spend at a given time all at once. For these reasons, a loan that is priced at a fair rate can be an option to bridge your short-term financial needs without having to eat into your other necessary expenditures such as rent, food, gas, etc.

In our day-to-day lives, people take out loans for a variety of reasons. Some of the most common ones are for financing big-ticket items such as a house (mortgages) or a car (auto loans). However, these tend to be secured loans where the underlying asset (i.e., the house or the car) serves as collateral that can be seized by the bank to recoup its capital if the borrower fails to pay. There are also unsecured personal loans that people can use for more immediate purposes. Some examples of these uses include:

  • Medical or dental expenses

  • Childcare expenses

  • Education expenses

  • Wedding expenses

  • Home repair costs

  • Legal fees

  • Debt consolidation

For all these and more, Magical Credit offers a portfolio of lending products that provides customers between $1,500 to $20,000. Prospective borrowers evaluate and select these loans based on their particular set of circumstances. However, it is not always obvious which loan is right for your needs. The guide below is therefore designed to simplify this decision and ensure that borrowers are making the right decision for themselves.

Choosing a loan: What’s the difference?

To put it bluntly, a $1,500 loan can look a lot different from a $20,000 loan or even a $10,000 in terms of your repayment timelines, monthly repayment amount, and other key terms. As such, you should ensure that the loan you obtain is aligned directly with your needs and repayment capacity. To help with this decision, check out the table below:






1-2 years

2-3 years

3-5 years

3-5 years

Potential Uses

  • Medical issues

  • Debt consolidations

  • Minor repairs

  • Medical issues

  • Debt consolidations

  • Minor to large car repairs

  • Minor house repairs

  • Legal fees

  • Serious medical issues

  • Debt consolidations

  • Major car or house repairs

  • Weddings

  • Funerals

  • Serious medical issues

  • Debt consolidations

  • Major car or house repairs

  • Weddings

  • Funerals

Bank Credit Requirements


Mid to High



How do you know which loan is right for you?

$1,500 Personal Loan

As detailed above, the $1,500 loan is for relatively smaller expenses of an urgent nature. In a situation where a borrower is facing a need for an unforeseen expense or if a borrower finds themselves falling slightly short of required funds, a $1,500 principal should be sufficient to fulfil those immediate cost obligations. Some of the particular uses of this loan may include:

  • Less serious or non-critical medical issues

  • Dental care (chipped tooth, root canal, etc.)

  • Less serious or non-critical medical problems for pets

  • Minor car repairs (new set of tires, bumper, windshield replacement, radiator, etc.)

  • Minor home repairs (small fixes and upgrades)

One of the most common sources of relatively minor debt requiring personal loans of amounts around $1,500 includes car repairs and expenses. On average, car owners spend about this much money a year on repairs and expenses ranging from winter tire installation and oil changes to wiper blade and brake pad repair, engine air filter changes, and fluid top ups.

Another common source of this type of expense for Canadians is back to school supplies and expenses, which can cost the average Canadian family just under $1,500 a year. These expenses cover the cost of items such as new clothing and stationary, with more expensive items, such as new computers and hardware, running these costs notably higher as well.

For these types of costs, a bank may be a potential option. However, most large banks do not offer loans for a sum of $1,500 or lower. From the bank’s perspective, loans of that size may simply not be profitable enough for them given the additional administrative and regulatory costs they have to face.

It is here where Magical Credit can step in to offer competitive loans with smaller sums and flexible repayment timelines. If you are facing an urgent expense where you are just short of the required funds, contact us today and our team would be pleased to support you in your unique financial needs.

$5,000 Personal Loan

For borrowers with slightly larger expenses of an urgent or semi-urgent nature, a $5,000 loan may be more suitable than a $1,500 one. A $5,000 may also be appropriate if you are thinking of paying back creditors or consolidating your debts. The concept of “debt consolidation” refers to a borrower taking out a single loan to pay off all outstanding debts. Once the individual debts are paid off, the borrower then makes regular principal and interest payments on the large loan, thereby saving time each month, as well as (potentially) money as debt consolidation loans offer lower rates than a credit card for instance. Some other uses for a $5,000 principal include:

  • Medical emergencies that are not covered by insurance

  • Advanced dental procedures (such as braces)

  • Major car repairs caused by an accident or inclement weather

  • Home repairs (furnaces, boilers, vinyl siding, renovations, etc.)

  • Legal fees (divorce proceedings, personal injury, etc.)

  • Funeral expenses

When it comes to loans of around $5,000, one of the most common sources of this type of expense centers around travel expenses. Between the costs of food and beverages, lodging, and transportation, travel expenses can cost quite a bit of money, and may require personal loans to help ease booking and organization concerns. Depending on the type of expenses, these costs can be tax deductible at the end of the year.

While the above expenses are a guideline, borrowers may have other practical purposes that require a sum closer to $5,000 than $1,500. Ultimately, it is up to the borrower to determine how much they need based on what they can afford to pay from their disposable income and the funding shortfall they will encounter. At the $5,000 level, banks will certainly be inclined to lend to prospective borrowers either as a personal loan where they provide a lump sum or as a revolving line of credit which can be drawn down, paid back, and drawn down again up to a maximum limit. However, the process with a large bank can often be longer as several approvals have to be obtained.

If you are looking for a quick $5,000 loan without having to jump through multiple hoops, Magical Credit can support that via our instant approval $5,000 loan products. Applications take 5 minutes (or even less) and funds can be received within 24 hours.

$10,000 Personal Loan

A $10,000 loan can be useful if borrowers are facing a large expense that has to be paid upfront or if they want to consolidate a significant amount of high-interest debt. This type of loan should ideally not be used for smaller expenses such as minor repairs to homes or cars, or minor medical or dental processes. A $10,000 can incur quite a large interest cost per month, and so should only be used by borrowers who have a comfortable source of income that can cover monthly payments, but cannot afford to pay the $10,000 right away. Some of the uses of a $10,000 personal loan may include:

  • Large home improvement projects such as renovations or major repairs like roofing

  • Major medical processes not covered by insurance

  • Children’s education or tuition costs

  • Wedding expenses

  • Funeral expenses

  • Debt consolidations of $6,000 or over

A perfect example of expenses that can run up to $10,000 for the average Canadian is the broader category of moving expenses, and all the individual types of costs this process can amass over time. Between transportation and storage of furniture and travel expenses to legal and procedural fees such as cancelling a lease, maintaining your home, and incidental costs such as replacing expired licenses, moving expenses may require larger personal loans to keep the process running smoothly and according to schedule. These types of expenses are usually tax deductible.

There can certainly be other instances where a borrower may need $10,000 (or more) that are not covered above. It cannot be emphasized enough though that sums like these must be treated with caution. Lenders such as the big banks only lend $10,000 or over on an unsecured basis to borrowers with healthy credit profiles, stable incomes and strong credit scores. Loans are given out either as a term loan or a revolving line of credit depending on borrower needs and preferences. If you are in need of a $10,000 loan but do not have quite the credit profile that fits bank parameters, reach out to our Magical Credit team and we will be glad to assist you!

$20,000 Personal Loan

Like the $10,000 loan, the $20,000 loan is also a product that can be used for big-ticket items where a cash payment needs to be made upfront. However, this is an even bigger commitment than $10,000, so borrowers need to be double sure that they will be able to service the debt obligations (principal plus interest). Loans of this size should only be obtained when there is truly a need for such a large expenditure. Some instances of this may include:

  • Large home improvement projects such as renovations

  • Major medical processes not covered by insurance

  • Children’s education or tuition costs

  • Wedding expenses

When it comes to personal loans of this type of scale, there are a number of financial commitments that can create this kind of debt for the average Canadian. One of the most common sources of this type of debt includes education expenses and fees, including the cost of secondary and post-secondary tuition, as well as interest on student loans and school supplies.

In addition, a common source of debt requiring personal loans of up to $20,000 is credit card debt, which affects almost every single Canadian living in the country. The ability to pay back credit card debts, especially of this scale, is crucial, as rising interest rates and compounding debts can evolve into serious financial burdens if left unattended.

Given that $20,000 is a substantial principal amount, banks in Canada will likely only lend to borrowers who have demonstrated exceptionally strong credit profiles. If you need to get a $20k loan but don’t have a credit score that fits bank criteria, we at Magical Credit are here to help. Our team takes a prudent needs-based approach to credit evaluation. While we strongly believe in providing second chances to borrowers in need, we also work with you to ensure that you are able to make your repayments on time to help bolster your credit score over time.


  1. What type of loans do banks offer in Canada?

In Canada, you can get a variety of personal loans depending on your needs and credit profile. The most common types of loans you will see are:

  • Term Loans: A lump sum provided upfront by a lender that then has to be repaid over a set time period as specified in the loan agreement.

  • Revolving line of credit: A line of credit works similarly to a credit card where there is a set limit on how much can be drawn down. Once a LOC is drawn, the available utilization drops by the same amount and is replenished when the borrower makes a repayment.

  • Home equity line of credit: A HELOC uses the equity accumulated in a borrower’s home as collateral for a revolving line of credit. All things equal, this usually has a lower rate of interest than an unsecured revolving LOC as there is less risk involved for the lender.

  1. What are personal loan rates in Canada?

Rates on personal loans can vary widely depending on the borrower’s credit profile and the lender in question. There are also specific conditions of the loan that can impact the interest rate charged on the loan. Some of these conditions include:

  • Term: Longer loan terms generally come with a higher rate of interest than shorter loan terms because the lender is lending out capital for a longer period of time (which introduces greater uncertainty).

  • Security: Unsecured loans are typically more expensive than secured loans as in a secured loan, there is recourse for the lender to recoup their money in the event that the borrower defaults on payments.

  1. How much can a bank loan out?

The answer here is that it depends. Banks make a decision based on the borrower’s personal credit profile, total asset base (cash in the bank, properties, etc.) and relationship with the bank. Based on all of the above factors, banks can lend up to $25,000 or even more in many cases if a borrower has a strong history with the bank and a strong credit score and/or history of repayment.


Magical Installment Loans: We offer installment loans in the amount of $1,500- $20,000 that have a 12-60 month term with an APR 19.99% min - 46.8% max. On $1,500 borrowed for a 1 year term at 3.9% per month, the total cost of borrowing including a $194 fee is $896.00. The total amount to be paid back with interest and fee is $2,396.00. AB License #349796 and BC License #83626

NOTE: Our installment loans are open, so you can pay off your loan at any time with no penalty. You will only pay interest up to the date you pay it off.

Magical Cash Loans - Ontario, British Columbia, Northwest Territories, Nunavut, and Yukon Residents only: We offer Magical Cash Loans in the amount of $100-$1,500.00. The cost of borrowing is $15.00 per $100.00 for each $100.00 borrowed. On a $1,000.00 loan for 14 days, the cost of borrowing is $150.00. The total to payback is $1,150.00 which is an annual percentage rate of 391.07%. ON License #4741412. BC License#85919.

The Loan must be paid in full by the end of term, no extensions or exceptions, no automatic renewals. Failure to pay your debt on time will impact your future credit with Magical Credit Inc. and other credit lenders. All delinquencies will be reported to the Credit Bureaus.

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