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- Amount
- Up to $35,000
- Rate
- 9.99% - 46.96%
- Term
- 9 - 78 Months
- Amount
- Up to $60,000
- Rate
- 19.99% - 39.99%
- Term
- 6 - 120
For any credit user in Halifax, the right personal loan can be a huge asset. Even though there are other credit products that can help you pay for what’s important to you, a personal loan is a simple tool that comes with all sorts of benefits. Curious to know what those benefits are? Keep reading for everything you need to know about personal loans.
Click here for more information about loans in Halifax.
Comparing Personal Loans to Credit Cards
When considering the right payment method for your expenses, chances are you’ll think of cash and, of course, credit cards first.
It is true that your credit cards come with benefits, such as:
- The ease of the “tap” option to speed basic consumer transactions along
- The opportunity to buy something now, but pay for it later
- The option of making minimum payments to avoid late/penalty fees
- The chance to earn reward points and other related perks
- The possibility of credit building through timely payments
Then again, credit cards are not always the right solution, especially when:
- You use up too much of your credit limit
- The vendor, restaurant, or retail location you’re at does not accept credit cards
- Your wallet and/or credit card gets lost, stolen, or frauded
- Your expenses aren’t unnecessary consumer items (clothes, gifts, etc.)
On the other hand, a personal loan can be more beneficial:
- When your expenses are larger and more necessary than consumer goods
- When you’re making pricey renovations or additions to your home
- When you don’t want to overspend and have unmanageable credit card debt
- When you’d rather the option of arranging the frequency of your payments and the length of your overall payment period
- When you would rather a fixed interest rate on scheduled payments, rather than paying interest on the varying amounts you borrowed
Want to increase your credit score without increasing your credit card debt? Read this.
A Look at the Application Process
When applying for a personal loan, be prepared for your financial profile to be inspected. You should also know how much you’d like to apply for and what you can afford in payments, interest, and administrative fees. So, before you apply:
- Research lenders in Halifax – Compare lenders and choose one who is legally permitted to practice lending in both Nova Scotia and the rest of Canada.
- Request your credit report – This can be done for free, once a year, from either of Canada’s credit reporting agencies (Equifax, TransUnion). We recommend that you request a copy from both agencies to ensure they’re accurate.
Dispute any errors – Credit reporting errors, such as incorrect personal information, improperly reported credit activities, identity theft, and fraud may be found within your report. These can ruin your credit if you don’t dispute them.
Increase your income and savings – The affordability of your payments plays a major role in your approval. One of the first things your lender will check is whether your income will support all the personal loan costs involved.
- Have stable employment – Your lender may also look at your employment history to confirm your ability to hold down a steady job. While freelancers and part-time employees can still be approved, proof of income is more necessary.
- Increase your credit score – While some lenders don’t check credit, the majority will. A bad credit score (620 or under) is a red flag for them, signaling that you could potentially default on your loan payments following approval.
Your Personal Loan Amount
Personal loans come in a wide variety of sizes. Under certain circumstances, borrowers can be approved for up to $100,000 with some banks. However, the loan amount and interest rate you’re approved for, as well as your approval odds in general, may depend on:
- What type of lender you choose (prime, private, bad credit, alternative, etc.)
- The health of your credit (report, score, rating, history)
- Your gross yearly/monthly income (bank statements, paychecks, etc.)
- The value of the assets you offer as collateral/security
- The financial ability of your cosigner, if you decide to apply with one
The Required Credit Score
Remember, some lenders don’t perform a credit check when you apply. However, many will, especially when you apply with a bank or other prime lender, where the borrowing criteria is more strict. For that reason, it’s best to maintain a credit score of at least 650 (in Canada, credit scores range from 300-900). This should give you good credit and put you in sight of the best approval odds, as well as more affordable interest rates. While a lower score is still acceptable to many lenders, particularly bad credit lenders, your interest rate might end up being higher and therefore less affordable. Either way, there’s no downside to having good credit, so it’s best to improve it however you can.
Check out how your credit score is calculated here.
Personal Loans as Credit Improvement Tools
Speaking of improving your credit, a personal loan can be an effective way of doing just that, since credit products and your credit score are directly linked. When it comes to personal loans, it’s important to:
- Apply for a loan amount that’s reasonably affordable
- Complete all your loan payments by their schedule due dates
- Stay away from any unnecessary debt until your full loan has been repaid
- Choose a lender who periodically reports your progress to at least one credit reporting agency
Take a look at this article about no and low documentation personal loans in Canada.
Other Recommendations From Loans Canada
Again, unlike a credit card, a personal loan is best used for important expenses. Here are a few examples that Loans Canada would recommend:
- Tuition, textbooks, school supplies, and other educational costs
- Financing auto-related repairs or maintenance
- New appliances, furniture, and other pricey living expenses
- Repaying any outstanding debts through other lending sources
- Any unpredictable or emergency costs that come up
Personal Loans and the Loans Canada Network
At Loans Canada, we’re committed to helping you find the right personal loan for all your personal needs. Our application is simple and efficient and our lending network is extensive. Fill out an application today!
