Personal Loans: Overview
Personal loans are a way to borrow money, which you must repay over a specific period. You must repay the loan in full, including any interest and applicable fees, in a series of regular installments.
Personal loans are used to cover a wide range of expenses, such as car repairs, medical bills, rent, emergency expenses, and much more.
You may obtain personal loans at traditional banks and credit unions. Online lenders are an alternative source, especially for those who lack a credit history or have a low credit score. Therefore, online lenders serve consumers with less-than-perfect credit scores and histories, closing a gap in the market.
There are a few requirements to qualify for personal loans:
- You must be at least 18 years of age.
- You must be a Canadian citizen or permanent resident.
- You must have a permanent address.
- You must provide proof of a consistent income.
- You must have a valid Canadian bank account that has been active for at least 90 days.
Minimize your NSF transactions and ongoing payday loans or short-term loans to maximize your chances of approval.
Make sure that you understand the terms and conditions of your loan. The costs associated with a personal loan include the amount borrowed plus interest and any applicable fees.
Personal Loans: Types
Personal loans come in a wide variety of flavours, each serving a distinct need in the market. Debt consolidation loans are best for those who are struggling with multiple different debts, while co-signed loans are best for those who may need a co-signer on their loan due to a less-than-perfect or nonexistent credit history, and so on. Find out all about the different types of personal loans out there.
Unsecured Personal Loans
Unsecured personal loans do not require any collateral. That means you don’t risk losing any asset, if you default on your payments. However, you are still required to pay back the loan in full.
Secured Personal Loans
Secured personal loans require an asset as collateral, which means you risk losing that asset in case of defaulting on your payments. However, lenders may offer lower interest rates on secured personal loans due to lower risk. The lower risk is associated with their ability to seize the collateral in case of default and recoup their losses.
Debt Consolidation Loans
A debt consolidation loan can be a great way to combine your debts into a single monthly payment, which is also likely to have a lower interest rate. If you’re struggling with multiple different creditors, this could be one option to simplify the repayment process.
Co-Signed Loans
If you lack a credit history or have a low credit score, a co-signer can help you access funds and loans you otherwise might not be able to access. If you default on your payments, this will impact both the co-signers’ credit scores.
Fixed-Rate Loans
Fixed-rate loans feature the same interest rate throughout the repayment period, making them an attractive option for those who prefer a predictable repayment schedule and want to budget in advance.
Variable-Rate Loans
The benefit of a variable-rate loan is that the interest rate may decrease due to market conditions, but the risk of a variable-rate loan is that the interest rate may also rise due to market conditions. Therefore, it’s preferable to keep these loans short-term.
Personal Lines of Credit
A personal line of credit allows you to borrow money repeatedly, much like a credit card. You only pay interest on the amount that you borrow. This type of credit is best for those who have large or ongoing expenses.
Buy Now, Pay Later Loans
Buy now, pay later loans allow you to complete a purchase without paying the full price upfront. You will pay the remainder of the balance over a series of regular installments. Typically, the full amount will be due within six weeks of the purchase.
Cash Advance Apps
Cash advance apps allow you to borrow cash quickly, but they typically come with a monthly fee and high interest.
Payday Loans
Payday loans allow you to borrow money until the next payday. The drawback of payday loans is high interest and fees.
Pawnshop Loans
Pawnshop loans allow you to exchange an asset for cash, but you may lose the asset if you default on your payments. In addition, pawnshop loans come with high fees and interest.
Applying for a Personal Loan
Applying for an unsecured, fixed-rate personal loan with LendProConnect is as easy as 1-2-3! Follow the steps below:
- Fill out our quick online application.
- Get approved.
- Have your funds deposited directly into your bank account as soon as the next day!
Apply online now via LendProConnect. We will connect you with online lenders anywhere in Canada.
Get Your Personal Loan Anywhere in Canada
You can obtain personal loans via LendProConnect and our trusted network of online lenders anywhere in Ontario, including Toronto, Oakville, Hamilton, Brantford, Ajax, Bowmanville, Markham, Cambridge, Niagara Falls, Kitchener, Kingston, Thunder Bay, Richmond Hill, Vaughn, Mississauga, Ottawa, Sudbury, Barrie, Oshawa, Niagara Falls, and more. Additionally, you can obtain personal loans in Alberta, Nova Scotia, Saskatchewan, New Brunswick, British Columbia, and other Canadian provinces. Apply online now.
