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Easiest Place to Get A Loan

Like many other nationals, Canadians live freely in debt. Except for the wealthy, loans are an essential part of many people. Be it loans to pay for mortgages, or finance auto deals, or student loans to go to School. Even credit cards are used in day-to-day purchases. According to a 2017 report published by the Bank of Canada, Canadians owed a whooping TwoTrillion Dollars. Mortgage loans take up close to ¾ of the total debt. The report further indicates that the country’s debt to income ratio stood at 170%. An estimated 8% owe over 350% of their total income and are facing bankruptcy. Using loans to spend beyond your reasonable limit is a dangerous, bottomless pit that can lead you into financial bankruptcy.  However, responsible borrowing culture can help you stay ahead of your finances and build a good credit history.

When choosing the right loan, there are a lot of factors that need to be put into consideration. This article discusses the most accessible places to get a loan, the categories of loans, requirements, and what qualifies or disqualifies you from getting a loan.

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Written by: Big Piggyy

Rating

3.3/5

Loan Term

14 days -60 months

Est. APR

% 390 - 445

Loan Amount

$100 - 15,000

Rating

3.3/5

Loan Term

14 days - 60 months

Est. APR

% 173.81 - 495.36

Loan Amount

$50 - $10,000

Rating

3.9/5

Loan Term

12 - 60 months

Est. APR

% 46.93

Loan Amount

$100 - $15,000

Rating

4.3/5

Loan Term

90 -150 days

Est. APR

% 26

Loan Amount

$500 - $850

Rating

4.8/5

Loan Term

6 - 60 months

Est. APR

% 19.99 - 36.99

Loan Amount

$500 - $15,000

How to Choose a Loan

First Know the Purpose 

Your reason for collecting the loan will determine what lender you should go to and what type of loan you should apply for.

 

Interest Rates 

Different lenders have different interest rates. Therefore, when choosing a loan, ensure you consider this by comparing other lenders and their corresponding interest rates. Also, ensure you examine their Annual Percentage Rate (APR) and their monthly rate.

 

Repayment Plans 

Your choice of the repayment plan will be the determinant factor of the payment frequency (how often) and how soon you will pay off this loan. You have the option of choosing between weekly, bi-weekly and monthly.

 

Additional Fees 

This is very important. Ensure you ask your lender if there are any other fees. Generally, most lenders do add extra cost. Therefore, make sure your lender is not charging you beyond what the law allows them to.

 

Background Check

Ensure you make a background check about your lender. Check their track record on how they treat their customers. It will provide you with insight that will ease your decision-making process.

 

Requirements to Qualify for a Loan

Loan requirements broadly vary from lender to lender and also depend on the type of loan you choose. Below are some of the basic requirements that you need to provide during your loan application process.

  • Proof of Income. Most lenders will demand you to have a job for at least three successive months. Having a job will guarantee a regular income source to support the repayment plan.
  • You must have an active bank account. Most lenders also demand you provide evidence that you have an active bank account for at least three months. This evidence will prove that you’ve received income for the last three months, further verifying your employment and income stability.
  • It would be best if you had a verifiable means of Identification(ID). A verifiable ID, like a Driver’s License, will serve as proof of your name, age, permanent address, Social Insurance Number, etc.
  • Good credit history.
  • Proof of citizenship or Permanent residency

 

Types Of Loans

 

Mortgage Loans

A mortgage loan is a type of loan that’s accredited against an immovable asset. A mortgage loan is classified as a secured loan. This type of loan is generally approved for substantial investments, e.g., a personal home, business or commercial properties, equipment, etc. The lender (usually banks and investment cos) hold the asset as collateral until the total loan amount plus interest is repaid. The requirements are stringent and extensive.

The interest rate on mortgage loans is usually low.

 

Instant Loan or Cash Advance 

An instant loan, also known as Cash Advance, is a type of short-term loan where the merchant will extend a high-interest, unsecured loan solely based on your income. The process involves the borrower writing a post-dated cheque with the merchant as the beneficiary or its electronic equivalent to give the lender admittance to your account.

A typical payday or cash advance loan is a small-dollar loan not exceeding $1500 with a very short-term repayment period due in a single lump payment. In places like Alberta, Manitoba, British Columbia, New Brunswick, and Ontario, payday loan settlement can take up to sixty-two days.

Exorbitant fees and high-interest rates (as high as 400+% p.a) often characterize payday loans. However, their accessibility and low requirements bar make an excellent option to consider in time of emergency.

 

Short Term Loan

A short-term loan is a category of borrowing extended to individuals and entities for a short duration to fulfill immediate needs. For individuals, it can be in the form of payday loans, credit cards, etc., while for companies, it can be in trade credit, bank overdraft, etc.

 

The loan tenure usually falls between 6-12 months for individuals and 1-2 years for companies. 

The annual interest rates are usually set high. This is to make up for the short tenure restrictions. Applicants with lower credit scores pay higher interest rates compared to those with higher scores.

 

Secured and Unsecured Loan

 

A secured loan is a type of loan that requires collateral—usually a tangible and immovable asset or a car.An unsecured loan does not require any collateral.
It has extensive and meticulous application procedures. To allow the lender to conduct a thorough evaluation of the property.The process is usually quick and straightforward. It takes a day or less to approve.
The interest rates are lower. For this reason, secured loans are more attractive and affordable.The interest loan for an unsecured loan is usually higher.
The borrower takes on more risk.The lender has a greater risk.
The loan amount is usually higher. The loan amount is small—usually from a few hundred or thousands.

 

Places You Can Get a Loan

 

Banks or Credit Unions 

Banks and Credit Unions are the standard options if you have an excellent credit score and want to obtain a large sum. They have more extensive requirements and stringent procedures.

 

Private Lenders 

If you are looking to get a quick loan and have a decent credit history, Private Lenders are the best choice for you. Compared to traditional lenders, private lenders have less strict requirements. 

 

Loan Brokers 

These are the middlemen of the lending institution. They are in contact with multiple lenders. They can help you find the best deal with a relatively good interest rate and affordable fees.

 

Online Lenders 

One of the benefits of technology is it optimizes processes and increases efficiency. This puts the borrower in direct contact with the lenders without necessarily going to a physical location. The borrower will fill the application form online, attach the necessary documents and submit it. Once your application is approved, you will receive the money directly in your bank account. This process usually takes a day or less. 

 

LENDEROFFERINTEREST RATETERM
Loans Canada$1 – $50,0002% – 47%3 – 6 Months
Consumer Capital$500 – $12,50020% – 35% Negotiable
Fairstone$1 – $50,00020% – 40%6 – 120 Months
Lenddirect$1 – $15,00020% – 47%Negotiable
LendingMate$2,000 – $10,00043%12 – 60 Months
Mogo $300 – $35,0006% – 48%3 – 60 Months

Some of the best places to get a loan online with their respective interest and repayment terms.

 

Conclusion

The list of lenders is endless. What differentiates most of them is the interest rate, fees, the amortization period, and the maximum amount they offer. As a borrower, ensure you do your due diligence before choosing a lender. Take what you can afford to pay back without defaulting. This way, you build an excellent credit history to help you negotiate a higher loan amount with a lower interest rate in the future.

Big Piggyy

"Show me the MONEY!!!" – Jerry Maguire

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