What Is An Online Loan?
An online loan is a loan that can be secured online quickly and securely. It includes:
- The principal (the amount of the loan)
- The interest or APR (the amount the lender charges for lending the money)
- The term the loan will be paid back
- Conditions of the loan agreement, including fees or penalties
- The total amount of the loan (principal, interest, and fees)
Types of Lenders
Basically, an online loan represents financing that includes the loan amount plus interest and any additional ancillary fees. You can get quick instant same day loan products or cash loans from several types of lenders, as follows:
- Traditional banks offer cash loans but require a higher credit rating and take longer to approve the funding.
- Loan companies offer more flexible financing and some provide bad credit loans for borrowers with less than stellar credit.
- Peer-to-peer lending or P2P lending is a new way to borrow cash loans. Borrowers apply for loans where a business or person invests in the borrowers. Therefore, P2P cash loans are provided by individual investors, not an institutional lender or bank.
What you choose in a lender will depend on your credit score and the amount of time you can wait for funding.
Best Online Loan Products
An online loan may be one of several loan products including the following:
- Car title loan – A loan where you receive urgent financing, using your car’s title to secure the loan amount. The lender can seize the car if you cannot pay back the loan. You can drive the vehicle while the lender has the title.
- Quick instant same-day loan – Financing, such as payday loan or personal loan that is approved online the same day of the application.
- Installment loans – Loans with longer terms that are used to pay for various purposes, such as vehicle financing, business funding, emergency repairs, and vacation funds.
- Home equity loan financing – This type of online loan product allows you to consolidate debts, make home improvements, or pay for large-ticket purchases.
- Business loans – Online cash loans cover businesses in various ways. Some unique offerings include merchant cash advances, with payments deducted from a business’s credit and debit card receipts. Other business loans represent short term loans that allow companies to use the money to replenish their stock for seasonal sales activities.
- Bad credit loans may be secured online as well. Some of these loans require a guarantor who can pay off a debt if the payer cannot meet the obligation.
- Unsecured loans are based primarily on the applicant’s credit score and debt-to-income (DTI) ratio, as the loan is not collateralized to cover the loan in case of default. Usually, the interest rate on these loans is higher.
- Secured cash loans may represent a home equity loan, car title loan, or auto loan, all which use an asset or collateral that can be seized by the lender in case of default.
You have a lot of options to choose from when choosing cash loans online. Make sure you choose a product that works the best for you.
Selecting Cash Loans Online
When deciding on online loans in Canada, you need to consider:
- The Interest rate or APR(Annual Percentage Rate) charged for the loan. Usually, this rate is determined by your credit rating.
- The Term for the loan – how long it will take to repay money loans online.
- The Factors used for approval. While some lenders consider your credit score first, others may look more closely at your debt-to-income ratio and your earnings.
- What it will cost you to totally pay back certain featured loans online with monthly payments.
Prepare yourself before submitting a loan application online. Check out the terms of the loans you are reviewing to make sure you get the best loan rate and repayment schedule.
Popular Reasons Canadians Take Personal Loans or Installment Loans Online
Most of the people who take out cash loans online do so to meet unexpected expenses, such as a car repair, home repair, or to consolidate debt. People who must take out these loans often have work and family obligations and a fairly busy lifestyle. If they have an emergency expense that cannot wait until payday, they check out a convenient loan solution. When they apply for loans online, they can have the funds they need the same or next business day.
What You Need to Gather to Apply for Online Cash Loan
To apply for an online loan, you generally should provide:
- Your credit score. Make sure you have any inaccuracies removed from you credit report before applying for online loans in Canada.
- Current work status or an income source to repay the loan amount.
- Your monthly income or job earnings.
- Amount of your current debt.
- Your location.
Once you have all the required details and information, you can put your loan application through easily online. Usually, the lender will also ask for a bank statement if your employer makes direct deposits into your account. After careful review of your application, you can get approved for funding as soon as the same day or the next day at the latest.
Applying for a Business Loan Online
When you apply for one of the business loans online, you will need:
- Your Canadian Business Number (CBN) for your business – This number is used for business tax purposes in the same way an S.I.N. is used for personal tax reasons.
- Your business checking account statement and banking details, including account number and routing details.
- A business plan (in some cases)
- Articles of Incorporation or Articles of Incorporation, if applicable
- The exact reason you need the loan or how you plan to use the financing
- Your debit and credit card sales volume (for a merchant cash advance)
- Your inventory or stock requirements (for short-term loans covering upcoming sales or seasonal marketing activities)
The above information and lists gives you an idea what to expect when applying for business loans or personal loans online. Always check with the lender first to see what he or she needs from you to process your application.
The Borrower’s Credit Report
The credit report is usually the main factor used in approving personal loans online. The credit report, which includes your credit score, tells the lender whether or not you can repay the loan. To build good credit, you need to:
- Regularly pay your bills each month (make sure you don’t miss payments)
- Maintain a low debt-to-income (DTI)
- Carry 3 or 4 credit cards – no more, and use the cards only when needed
- Consolidate your credit cars debt and make one payment at a lower rate of interest
- If you take out one of the bad credit loans, again, regularly make your payments and see if you can refinance the amount at a lower rate after about a year.
Online Personal Loans vs. Payday Loans
There is a distinction between online personal loans and payday loans. Payday loans generally carry a higher interest rate and are paid back in 1 or 2 installments by the next payment period or following 2 payment periods for your job.
Online personal loans, when used for urgent expenses, usually come with longer terms and have a lower interest rate.
Secured Loans vs. Unsecured Loans
Online cash loans may be secured (collateralized) or unsecured. If they are unsecured, they normally feature a higher rate of interest. That is because they are not supported by an asset – something a lender can seize if the borrower defaults on the loan.
Examples of secured loans include car title loan financing, home equity loan products, and auto financing.
What You Should Know about Bad Credit Loans
You can take out online cash loans if you have bad credit. However, Borrower Beware! Some lenders who provide bad credit loans are predatory lenders and charge exorbitant interest rates. Plus, these lenders usually do not report your payments to the credit bureaus and can sink you further into debt.
Before you take out one of the bad credit loans online, make sure that the lender specializes in this type of loan product and is considered credible. For example, some lenders offer guarantor loans for borrowers with bad credit. These loans allow you to apply for a loan with someone who has a good credit score and history (a guarantor). If you default on the loan, the guarantor assumes the debt, per the loan agreement.
If you find a lender that regularly works with bad credit borrowers, you can take out the loan, but, normally, at a higher interest rate or APR. After making regular payments for a year, see if you can refinance the loan amount at a lower rate of interest. You can often use this approach when you take out an auto loan.
Tips on Getting Online Loan Approval
To ensure you get approved for cash loans online, you need to:
- Choose the loan type you need.
- Choose a lender who will work with you. (For example, if you need to take out one of the bad credit loans, make sure the lender specializes in this type of financing.)
- Borrow the money for the right reason or for a specific purpose. Don’t be frivolous when it comes to applying for personal loans of any kind. Keep to a budget so you can pay the loan back and use it for your exact financial requirements.
Where to Loan Online in Canada
- GODAY Fast Cash – Click and Go – A payday Loans source that allows you to borrow money loans online and receive the loans the same day. You usually pay back the loan, to avoid the high interest incurred, before or by your next payday.
- MOGO is a company that offers personal and quick online loans in Canada as well as a Visa card that rewards you with Bitcoin on purchases. You can also trade the cryptocurrency on the MOGO platform. The card also supports environmental measures against climate change and global warming. Specifically, the company advocates carbon offsets, credits applied for emission reductions that may be sold to other parties to compensate for emissions.
- LOANS Canada provides several kinds of personal loans and unsecured loans online. By going through the funding company, you can get online loans in Canada at a reasonable rate in a fast amount of time. Cash loan products featured by LOANS Canada include:
- Unsecured personal loan financing
- Debt consolidation loan (used to pay off credit card debt)
- Car repair loan
- Guarantor (Cosigner) loan – one of the types of bad credit loans
- Consumer proposal payoff loan
- Credit rehab savings loan
- Small business loans
- Car loan
If you need to get loans online fast and conveniently, LOANS Canada gives you the means and access to do so.
- CashMoney offers quick instant same-day loan products from $500 to $10,000. Apply for a cash loan, inserting your province first to get further details and rates. Therefore, you can get an online loan in Canada and in other provinces. The lender is well-known for its short-term loans online and personal loan products.
- LendDirect offers unsecured loans in the form of its highly popular line of credit loan products. A line of credit works like a credit card. Once approved, you receive a credit limit. Use only the amount of credit you need, then pay it back in quick and easy payment. Other Canadian lenders offer personal loans, like installment loans, which do not offer this type of flexibility.
- 24Cash gives bad credit loans a good name, as the cash loan provider offers personal loans without checking the applicant’s credit score. It’s easy to go online with 24Cash. Just apply for loans online and you can get funded in a day. The lender gives you access to quick online loans and keeps your personal details confidential and safe.
- Refresh Financial offers a credit builder loan so you can build your credit and apply for loans online, including personal loans with monthly payments. The company features credit builder loans from $1,250 to $25,000 and an APR of 19.99%. Terms span from 36 to 60 months. A credit builder loan helps you improve your credit score, allowing you to make a monthly payment to a secured savings account. Your payments are reported to the major credit agencies during the loan term. At the end of the payment period, you will receive the accumulated savings in the secured account.
- MagicalCredit offers bad credit loans in Canada, looking past an applicant’s credit score for loan qualification. The company provides some of the best online loans for low-income households, accepting non-traditional sources of income, including government subsidies, such as unemployment insurance, child tax credits, and pensions.
- FreshStart offers personal loans, allowing applicants to apply for loans online anytime, day or night. The company does not offer payday loans, but personal money loans online for up to $15,000. The funding is fast and hassle-free. You can get approved over the phone or by text from just about anywhere in Canada.
- iCash offers online loans for Canadian customers for unexpected cash emergencies, such as repairs, car breakdowns, and medical costs. Unsecured loans are offered that do not require documents or long approval times. You can get the cash you need through this quick online provider quickly and conveniently.
- LoanConnect matches you with a loan provider so you can get personal loans, installment loans, or short term loans online when you need the funding. When you access the platform, you just need to search lenders to get the customized loan you need. Get loans online for up to $50,000 in as little as 5 minutes. If you apply early, you can receive your funds the same day. Loan terms range from 6 to 60 months with APR rates as low as 10%.
- LoanMeNow offers online loans for BC, Ontario, and other Canadian customers who need to pay for an unexpected expense. The loan provider does not cover loans for self-employed borrowers, as payments are withdrawn from an applicant’s regular payroll. Standard repayment terms cover 3 months (or a minimum of 84 days and a maximum of 90 days.) You can choose from 12 weekly payments, 6 bi-weekly payments, or 6 semi-monthly payments. The site features money loans online up to $1,000.
- MoneyMart is a quick online loan website that features installment loans and cash advances. You can apply for loans online and get funded the same day. Installment loans range from $1,000 to $15,000 while cash advances are available that span from $120 to $1,500. Flexible repayment options for installment quick online loans extend from 12 to 60 months. Cash advances or payday loans have 1 to 62-day repayment terms.
- SkyCap Financial allows loan applicants to take out installment loans for up to $10,000 with repayment terms of up to 3 years. Get loans online fast and conveniently using the site’s quick 5- minute personal loans application. Get processed and approved the same day. The company offers short-term loans online that include bad credit loans that begin at $500.
- Eastern Loans offers payday loans that are easy, fast, and secure to apply for online. The money online loans process goes through the same day with reimbursement scheduled for 3, 6, or 12 installments over a 3-month period. The unsecured loans are provided with no hidden fees and money for the cash loan is deposited directly into the borrower’s account. It is also withdrawn from the same bank account, based on the applicant’s next payday.
- Consumer Capital Canada offers personal loans from $500 to $12,500 – small installment loans that begin at 19.99% APR financing. You simply apply for the money loans online for your approved amount and payment terms. The loan provider also features balance increases on current financing.
- Fairstone customers can receive funding for point-of-sale financing, auto loans, and personal loans from $500 to $50,000. Loans are designed for borrowers with fair to good credit scores. You can get loans online or through Fairstone’s branches to consolidate debt or to cover unexpected costs. Fairstone offers lower interest rates than most non-bank lenders and has almost a century of lending experience in Canada.
- Cash4You offers loan money loans online in the form of installment loans and payday loans. You can get loans online from $1,000 to $15,000. Receive payday loan funding for up to $1,500 direct-deposited to your bank account. You only have to pay one simple payment on payday.
- LendingMate highlights guarantor loans online with monthly payments and offers online financing for Ontario and BC residents. To be a guarantor for a Lending Mate loan, the applicant must be 19 to 75 years old and, preferably, own their home. They should have a proven history of paying their bills on time and have a high credit rating. Guarantors assume a borrower’s payments in case he or she cannot pay the loan amount. You can borrow up to $10,000 for these types of bad credit loans. Most borrowers with bad credit who have a guarantor receive approval.
- EasyFinancial provides best online loans in the form of unsecured loans, secured personal loans, creditplus savings loans, small business loans, and retail funding. You can receive a personal loan for as much as $15,000 for debt consolidations, bill payments, auto or home repairs. Loan terms run from 9 to 60 months. Depending on the loan product, you can get loans online for as much as $45,000.
- Progressa provides debt consolidation so borrowers can rebuild their credit and improve their lifestyles. The company features a way for people to stop paying on bad credit loans and get their financial house in order. The company offers a debt relief solution, featuring loans online with monthly payments that cover your credit card payoffs.
- FlexMoney offers borrowers personal loans online that feature a fast and easy application process. Funds are offered for personal loans from $500 to $15,000 for terms up to 5 years. Therefore, FlexMoney offers a “flexible” way to obtain online loan funding.
List of Banks in Canada that Offer Personal Loans
- Royal Bank of Canada – The largest bank in Canada, RBC serves over 16 million customers. The bank’s headquarters are based in Toronto.
- Toronto-Dominion Bank – This Canadian multi-national bank was founded in 1855 and is based in Toronto. Some of its subsidiaries include TD Canada Trust, TD Bank, TD Securities, TD Auto Finance, and TD Asset Management, Inc.
- Bank of Nova Scotia or Scotia Bank is headquartered in Ontario. It is one of Canada’s Big Five banks.
- Bank of Montreal – This investment bank was founded in Montreal, Quebec in 1817 as Montreal Bank. Some of its subsidiaries include BMO Harris Bank and BMO Global Asset Management.
- Citi Canada – Also called Citibank Canada, This bank is the Canadian subsidiary of the U.S. multinational financial corporation, Citigroup. Its headquarters are in Toronto.
- TD Canada Trust – This commercial bank is part of the Toronto-Dominion Bank of Canada. The business features a wide range of financial services/products to over 10 million customers.
- Canadian Imperial Bank of Commerce – A multinational bank and financial services business based in Canada, the financial institution offers both chat and phone support and credit card services.
- First National Bank of Canada – The bank offers Banking without Borders (BwB) through its banking partnerships in Canada, enhancing its banking services and support for customers.
- National Bank – The financial institution traces its roots back to the mid-1800s in Quebec. It was established and incorporated in 1859 as Banque Nationale. It is the 6th largest commercial bank in Canada with branches in most of Canada’s provinces. It serves 2.4 million customers.
- HSBC Canada – Formerly called Hongkong Bank of Canada, HSBC Bank is a subsidiary of a multinational banking and financial services business, HSBC. It is headquartered in Vancouver, Canada, and was founded on July 1, 1981.
- General Bank of Canada – General bank is noted for its term financing products and support services for entrepreneurs. GBC operates as a subsidiary of First Canadian Insurance Corporation. It is headquartered in Edmonton, Alberta.
- BDC Bank – The Business Development Bank (BDC Bank) of Canada is a Crown corporation and national development financial institution owned by the Canadian Government. It was founded in 1944 in Montreal, Canada.
- ICICI Bank Limited – This privately owned financial institution headquartered in Vadodara, India – Indian owned, is corporate-based in Mumbai, India. ICICI Bank Canada only provides personal loans to current customers. Secured personal loans are not available to new customers.
You can get cash loans online in one of various forms. Choose from business loans, payday loans, personal loans, quick instant same day loan products, a home equity loan, auto financing, bad credit loans, or car title loan financing. There is a loan for just about everyone out there. Just make sure you regularly check your credit score. Doing so will make getting any type of funding quicker and easier.
Frequently asked questions
How do I apply for a loan online?
To apply for cash loans online, you should know your credit score and have all your income information handy.
You should also be at least 18 years of age.
You should regularly check your credit score and check for errors on your credit report to ensure you get the best interest rate if you do have to apply for financing.
You will need to supply the lender with a routing number and your bank account number so you can receive the funds electronically.
You can also arrange to have withdrawals for payments made from the same account.
What is a Guarantor Loan?
If you do not have a credit history or your credit score is lower, you can apply with a guarantor for a loan. A guarantor is someone who is added to a lending agreement who will pay the loan debt if you default on the loan. He or she should be at least 19 years old, have a good credit score and a good credit history.
What are My Chances for Getting Approved for Cash Loans Online?
You stand an excellent chance of getting approved, provided you:
- Have a good credit score
- Choose a lender who will work with you (in the case of bad credit)
- Have a specific purpose for your loan request
- Figure out first how much you can afford to pay back
- Show proof of income
- Present an ID (driver’s license) for proof of identification
Once you figure out the type of loan you need, make sure you know what you will need to submit a loan application. Different loan types have different requirements. So, you should find out the requirements before proceeding with the process.
When Is the Best Time to Apply for Online Loans?
You can apply for online loans anytime, 24/7. However, if you want to get approved the same day, it is best to apply early in the morning. In some cases, the earlier in the day you apply, the more likely you may even see funds in your bank account either in the afternoon or as soon as the next morning. The sooner in the business day you apply, the better.
Which Is Better to Get - An Online Personal Loan or a Payday Loan?
If you need quick cash and wish to pay a lower interest rate, you usually will do better if you apply for a personal loan online. However, if your credit is rather poor and you just need to get money for emergency cash for an urgent repair or to pay a late payment, such as a light bill, you can get a payday loan, as long as you have a job that will cover the loan payments.
Online personal loans normally have longer terms than payday loans. While you usually have to pay a payday loan back right away (as it is considered an advance), a personal loan has longer loan terms (usually about 12 months).
How Long Will It Take to Pay Back My Loan?
Usually, it takes one or two pay periods to pay back a payday loan, as these loans carry high interest rates and are only designed to advance money to borrowers for emergencies. If you take out one of the personal loans online, you can arrange to pay back the loan from one year to three years, on average. Make sure you are not assessed a penalty for paying back the loans early, as the sooner you pay off the loan, the less you are charged in interest.