Fast online personal loans Canada

Sometimes, personal expenses can exceed our income and even savings, requiring us to find a solution to cover the extra cost. Personal loans are one of the most effective and least expensive ways to get extra cash. 

Depending on your personal loan type, you can receive a cash advance from $100 and up to $50,000. However, navigating these loans is tricky as personal loans carry varying interest rates based on factors like your credit score and type of personal loan. 

Therefore, this guide will provide all you need to know about personal loans, alongside how to choose the best one in Canada. By the end of this post, you should be equipped with enough information to make a smart decision on where and how you get your emergency cash. 

Read on! 

What is a Personal Loan?

Personal Loans in Canada involve borrowing money from a lender to cover expenses and then agreeing to pay back the funds alongside interest on the repayment date. These loans can cover personal expenses like home renovation, dream wedding, or debt consolidation and must be replayed with interest on a specified date. 

You can get this cash advance from credit unions, banks, or payday lenders like Credit Club. You can receive from this request from $100 to $50,000 depending on the elder, type of personal loan, your credit history, and more. 

The repayment period also varies based on the loan agreement, but it typically ranges from two weeks to 60 months. It's also worth noting that personal loans can be Secured (requiring collateral) or Unsecured. 

Unsecured Vs. Secured Personal Loans

Most personal loans in Canada are categorized as unsecured loans, which require no collateral to acquire. The name unsecured is based on the risk lenders face in case of default, as there's no asset to compensate for the absent payment. 

Due to the nature of this type of loan, most lenders typically offer smaller amounts to manage the risk in case of late repayment. 

Some examples of unsecured personal loans include:

• Student loans
• Credit Cards loans 
• Payday loans
• Peer-to-Peer (P2P) Loans
• Installment loans

On the other hand, secured loans require you to pledge collateral such as your car, home, or any other asset. This item must be equivalent to the loan amount taken, allowing the bank to repossess it if you fail to repay during the agreed period. 

Some examples of secured Personal Loans include:

• Home Equity Loans (HELOCs)
• Auto title loans 
• Boat or Recreational Vehicle Loans
• Business Loans 
• Savings-Secured Loans

Since unsecured loans have more risk due to the absence of collateral, they typically have higher interest rates than secured loans. Nevertheless, they remain a reliable option for receiving emergency cash. 

Factors to Consider When Taking Personal Loans in Canada

When seeking a personal loan in Canada, it's crucial to pick based on your financial capacity and current condition. While the ideal loan can vary depending on your specific needs, assets, and repayment capacity, there are four important elements worth considering:

1. Interest Rates

Interest rates are one of the most critical factors to examine when evaluating the best personal loans in Canada. The interest rate directly impacts the total cost of borrowing and can significantly affect your monthly payments and overall loan affordability. 

For instance, imagine you're applying for a $10,000 personal loan with a 12% interest rate and a 5-year term. The total loan amount over the term would be $13,347 in this scenario. 

However, if you were to choose a loan with a higher interest rate, say 16%, the total loan amount would increase to $14,591. Therefore, carefully comparing interest rates from different lenders is essential to secure the most favourable loan terms.

2. Repayment Flexibility

Flexibility in loan repayment is essential, as it allows you to tailor your repayment strategy to your financial situation. Also, examine the loan terms to determine whether the lender permits flexible repayment options. 

It would be best to look for a loan that accommodates lump-sum payments and installments. This flexibility can be a valuable asset in managing unexpected expenses or fluctuations in your income.

3. Charges

Besides the interest rate, it's vital to consider any additional fees associated with the loan. These include application fees, origination fees, prepayment penalties, and late payment fees. 

These fees can vary significantly among lenders and can substantially impact the overall cost of the loan. To ensure you find a competitive loan, calculate the total cost of borrowing by combining the interest rate and any applicable fees. 

By doing so, you'll gain a comprehensive understanding of the financial commitment associated with the loan and can make an informed choice.

4. Excellent Customer Service

Personal loans often involve interactions with lenders, even if most of your application and management are online. In this case, examine the quality of the lender's customer service since a friendly and helpful representative can make your borrowing experience smoother and more enjoyable. 

When considering a lender, inquire about their customer service options and responsiveness. If you ever need to speak with a representative over the phone, they must be approachable and efficient in addressing your inquiries or concerns. A lender with excellent customer service can provide peace of mind throughout the loan application and repayment process.

Common Uses of Personal Loans

Personal Loans in Canada come in different forms due to their customizability, allowing you to take them for different reasons. Some of these include:

1. Renovation

Renovations often fix the home's design or add new areas to the property to raise its value for resale. Irrespective of your reason, personal loans for renovation can come in handy, typically known as Home Equity Loans. 

This type of loan is calculated based on the value of your home minus the remaining mortgage needed to be paid, allowing you to use your home to borrow. While interest rates with home equity loans are low, some people take the rates lower by signing the property as collateral. 

2. Vehicle Purchase

Auto loans are personal loans that let you borrow money from a bank or alternative lenders to purchase a car. In this case, the care is typically set as the collateral, meaning the bank can repossess it whenever you fail to repay the debt. 

3. Education

Student loans are among the most common personal loans, as 50% of Canadian students graduate with some form of debt. Since it's also an unsecured loan, there's no collateral needed, and in some cases, students pay no interest as long as they enroll in a full-time study. 

4. Surprise Cost

It's common for unforeseen expenses, such as needing a new fridge, car brakes, etc. In this case, personal loans provide you access to additional funds to settle these balances and pay at a more convenient time. 

These loans for handling unexpected expenses can be obtained through payday lenders like Credit Club. With this financial institution, you can receive up to $1500 and repay on your next payday or at an agreed date. 

5. Debt Consolidation Loans

Debt consolidation is when you take a loan to repay outstanding expenses, usually from a smaller loan. This method allows you to settle pressing loans with bigger loans with a smaller interest rate. 

While practical, this method requires a meticulous approach for the best interest rates, as personal loans from banks typically come at 11%. On the other hand, a line of credit has a rate of 9% and can go lower if you have tangible assets. 

Requirements for Getting a Personal Loan in Canada

Before proceeding to the bank or checking with multiple online vendors for personal loans, it's important to understand what's required to qualify for this cash advance. The eligibility criteria include:

Age 18 or older:

To qualify for a personal loan in Canada, applicants must typically be of the age of majority in their respective province, which is usually 18 or 19 years old. This merely ensures borrowers have the legal capacity to enter into loan agreements.

Legal Identification

Financial institutions require you to provide a government-issued identification such as a driver's license or passport. This helps verify your identity and legal status in Canada.

3. Steady Income

Proof of a consistent source of income is crucial for loan approval since banks and private lenders want assurance that borrowers have the means to repay the loan. This often involves providing pay stubs, employment letters, or income tax returns.

4. Active Canadian Bank Account

Having a valid Canadian bank account is necessary for funds deposit and loan repayment, thereby simplifying the lending process by offering a secure and convenient channel for transactions.

5. Proof of Residence

Lenders typically require proof of residence, such as a utility bill or rental agreement, to confirm your current address. This helps establish a stable connection to the community and adds to the lender's confidence in repayment.

6. Good Credit Score

A credit score is essential in loan approval since lenders assess your credit history and score to evaluate your creditworthiness. A good credit score often results in more favourable loan terms, while a poor score may lead to higher interest rates or loan denials.

Conclusion

The best solution to needing extra cash to cover expenses beyond your income and savings is requesting a cash advance. Fortunately, you can get instant loans via Credit Club within 30 minutes of completing the application process. 

We perform no credit check and only gauge your ability to repay based on your proof of income. Request a loan at Credit Club today and receive up to $1,500 in emergency funds in 30 minutes.