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Frequently asked questions about canadian personal loans

Whether you need a loan for a specific purchase or to consolidate debts, to use our loan comparator, simply enter your postal code to search the offers available in your location. Then enter your employment status, monthly income and credit level?. The system will use your responses to automatically display offers that are available to you. From those offers, check the range of loans to find a lender who can cover all of your needs. Be sure to check the interest rate in order to choose the lender with the lowest interest. When you have made your final choice, click on “Apply”.

Generally, private lenders offer second-resort loans. They are more flexible and have broader eligibility conditions than conventional banks. However, the interest rates are much higher than those of the banks, so it is better to go to a conventional bank first, and only turn to a private lender in case of refusal.

The approval process involves several factors. The lender will check your credit rating, your job stability, and your debt ratio by comparing your debt ratio to your income. They will also look at what assets you have, minus any loans you have on those assets. Lastly, they’ll consider your professional status, that is, your job.

Generally, lenders do not ask for collateral for loans of $15,000 or less. For loans above $15,000, you’ll need to provide an asset as collateral. For example, if you apply for a loan to purchase a car, the lender will use that car as security for payment.

A payday loan is an advance on your pay of up to $1500 that you must repay on your next payday. Interest rates can be as high as 35%. If you are unable to repay, you will have to pay additional fees and interest. It is strongly advised not to take out a payday loan. A personal loan allows you to borrow much larger amounts of up to $50,000. In addition, you can repay over a period of 24 to 120 months at a potentially lower rate.

There are several private lenders available in Canada that offer access to financing for borrowers with less than optimal credit scores. The ‘best’ lender is contingent entirely on your personal needs. Different lenders offer varying terms and structures for bad credit personal loans.

Payment frequency is the regularity with which you have to make payments on your outstanding debt. There are several types of payment frequencies that lenders can offer you, but the most common ones are monthly, biweekly or weekly.
A personal loan can certainly help you build your credit provided that you make all payments on time and that your lender reports to credit bureaus such as Equifax and TransUnion. Different agencies calculate your credit score in different ways, but the most common factor is your history of successful, timely debt repayment. As such, if you make your payments on time, the credit bureau records that as a positive in your favour and your score subsequently increases over time. Credit bureaus also reward you for using a wide variety of loans responsibly. If you hold an existing credit card, then a personal loan is counted as a different type of loan and thus viewed favourably (as long as payments are all made on time).

To calculate the monthly interest, you first convert that annual rate to a monthly rate by dividing it by 12. For example, if you have a loan with an annual interest rate of 12%, your monthly interest rate would be 1% (because 12% divided by 12 months equals 1%). Then, to calculate the interest you owe each month, you multiply your outstanding loan balance by this monthly interest rate. So, if you have a $10,000 loan, your first month's interest would be $100 (because $10,000 times 1% equals $100). Keep in mind that this method only applies to simple interest calculation. If you want to take into account the compounding effect of interest being charged on interest, you can use our personal loan calculator.

A credit building loan is a type of loan designed to help individuals build or improve their credit score. Here's how it works: when you take out a credit building loan, the lender places the loan amount in a savings account instead of giving it to you directly. You then make regular monthly payments, including interest, back to the lender over a set period of time. These payments are reported to credit bureaus, which helps you build your credit history.

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