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In need of some extra cash to cover a pressing expense, but don’t have enough money in your bank account? Luckily, there are personal loans available in Brandon, Manitoba to help you out of a financial bind. But is a personal loan right for you? Read on to find out.
Learn how to find the best personal loan for your needs, click here.
Credit Cards Vs. Personal Loans
Credit cards can be very handy to use when you don’t have the cash readily available to make certain purchases. Plus, they’re great for collecting rewards and points that can be applied to other types of expenditures including travel and electronics.
But credit cards can also be used in a similar fashion to a personal loan. If you have a high credit limit and are looking at making a large purchase, you might look to your credit card to fund the purchase and deal with repaying the amount – plus interest – in the coming months.
But credit cards typically come with sky-high interest rates, which means using plastic isn’t exactly the most affordable way to obtain funds needed to make a big purchase. Plus, spending a lot on your credit card will increase your credit utilization ratio, which can have a negative impact on your credit score.
Not only that, but credit card usage can lead to a cycle of debt that can be tough to get out of if you are unable to pay off your balance in full the next billing cycle. If you’re only able to make minimum payments every month, you could be setting yourself up for a debt trap that may be extremely difficult to climb out of.
While a credit card might be a convenient way to get access to the money you need for a big expense, a personal loan might be a more affordable option. Personal loans typically come with lower interest rates compared to credit cards.
Rates for personal loans generally range from anywhere between 5% to 36%, though the rate is typically somewhere under 10% for borrowers with a decent credit score and financial background compared to at least 18% to 22% for credit cards.
Can you use your credit card to improve your credit score? Find out here.
That said, personal loans still require an application and approval process, which can take a lot of time that you might not have if you need the money right away. Further, you’ll need to have a decent credit score of anywhere between 650 to 680 to get approved from a conventional lender. Or else you’ll have to seek out a personal loan from a bad credit lender in Brandon, which will likely cost you a lot more in interest.
Be sure to evaluate your specific situation and needs before deciding whether a credit card or personal loan is the better financial source for you.
What Can I Use a Personal Loan For in Brandon?
There are so many different uses for personal loans. They can be used for virtually any financial need you might have, including the following:
- Emergencies
- Travel expenses
- Medical bills
- Elective surgical procedures
- Auto repairs
- Home renovations
- Household repairs
- Post-secondary education tuition
- Large purchases
How Will I Get the Money?
After you’ve applied for a personal loan in Brandon and have been approved, you’ll be given the funds requested shortly afterward. While the manner in which the funds are extended may vary from one lender to the next, the money is typically distributed through direct deposit.
Don’t apply for a personal loan before you read this article.
What Are Lenders in Brandon Looking For During Approval?
Before you can get your hands on the money you need, you’ll need to get approved first. And in order to do that, you’ll need to meet certain criteria, including the following:
Good credit score: Your credit score tells lenders in Brandon what type of a borrower you’ll likely be. A high credit score is indicative of someone who makes timely payments, which is what they want to see before they approve a loan.
Stable employment: In order to be able to afford your payments to repay your personal loan, you’ll need to have a steady income, which requires a stable job. As such, your lender will want to verify your employment status.
Bank statements: In addition to having a steady income, you’ll probably need to prove that you can afford the payments on a month to month basis.
To learn how to avoid being rejected for a loan, check out this article.
How Big of a Personal Loan Can I Get in Brandon?
When you apply for a personal loan in Brandon, you’ll likely have a specific expense in mind that you need to cover which will dictate the loan amount you request. But that doesn’t necessarily mean that the lender in Brandon will approve you for that loan amount. The size of the loan will depend on certain factors, including:
- The lender – every lender in Brandon will have their own criteria about how much they may be willing to loan to specific borrowers;
- Your credit score – generally speaking, the higher your credit score, the more money you may be able to get approved for;
- Your ability to repay – if you can show proof that you’re a responsible borrower who can make timely payments in full, your approved loan amount may be higher;
- Whether or not you can provide security – if you can use a valuable asset as collateral to secure the loan, you may be granted a higher loan amount.
How to Use a Personal Loan to Improve Your Credit
Not only can a personal loan provide you with a source of funds you may need to cover a large expense, but it can also be a great opportunity for you to improve your credit score. Here’s how:
Work with a lender in Brandon who reports payments to the credit bureaus. It’s imperative that your lender reports your payments to the credit bureaus. Or else, your credit report won’t be noted accordingly and your credit score won’t see any improvement.
Take on a loan you can afford to repay. In order to make timely payments in full every billing cycle, the loan you take out – and its monthly payments – will need to be affordable for you. Be sure that you only take out a loan that you can afford.
Make payments on time. Your credit score will only improve if you make your payments on time, so make sure to be timely with your payments every month.
Don’t rack up other unnecessary debt that might jeopardize your ability to repay your loan. You might be able to fit your personal loan into your current budget, but if you take out additional loans after that, you might overextend yourself financially. In turn, this could put you at risk of being unable to pay your personal loan back.
With every timely payment you make, you will be able to watch your credit score slowly grow over time.
Can you get guaranteed approval for a personal loan? Find out here.
How Do I Apply For a Personal Loan in Brandon?
In order to apply for a personal loan, there are steps you’ll need to take. Before you even apply, it’s important that you take a close look at your finances and credit to make sure you’re in a good position to get approved. That means looking at your credit score, assets, income, and debt.
The actual application process typically involves filling out an application form and submitting certain pieces of information, including:
- Bank statements
- Statement of assets and debts
- Letter of employment
Credit Score Required For a Personal Loan in Brandon
Like most other types of loans, a minimum credit score is required before a conventional lender will grant approval. In Brandon, the minimum credit score needed to get approved for a personal loan is anywhere between 650 to 680, depending on the specific lender you’re dealing with.
Generally speaking, the higher your credit score, the better the odds of loan approval. As long as all other factors in your financial life check out, there’s little reason not to get approved for a personal loan in Brandon if you have a decent credit score.
With a lower credit score, the chances of loan approval are much smaller. And even if the loan is granted, the interest rate charged will likely be much higher than it would be compared to a higher credit score.
Check out this infographic for even more information about credit scores.
We Recommend a Personal Loan For…
While there are so many different expenses that can be covered by a personal loan for, it’s important to be wise about where the money is spent. Taking out a loan is a big financial commitment, and if you default on the loan, you could find yourself in a precarious position.
That’s why it’s important to make sure that you send the money wisely. We generally recommend taking out a personal loan in Brandon for any of the following reasons:
- Urgent expenses
- Medical expenses
- Car repairs
- Home renovations and repairs that add value to your home
- College or university tuition
Even if the expense you intend to cover with the borrowed funds makes logical sense, it’s still important to make sure that you are financially healthy enough to comfortably make all your payments on time.
Need a Personal Loan in Brandon?
If you’ve carefully considered what you need the money from a personal loan for and have assessed your credit and financial situation, call Loans Canada. We’ll help you determine which lender and loan type is best for you in Brandon. Apply for a personal loan with the help of Loans Canada today!
