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📅 Last Updated: October 4, 2021 ✏️ Written By Lisa Rennie 🕵️ Fact-Checked by Caitlin Wood
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In need of a loan to cover an unexpected expense that your current finances can’t handle in Halifax? Have you considered applying for an installment loan to help? Installment loans in Halifax are available from various lenders and can provide you with a lump sum of money to help bail you out of whatever financial predicament you may find yourself in.
Read on to find out all about installment loans in Halifax.
What Is An Installment Loan?
Basically, almost all loans are considered installment loans. If your repayment structure involves making installment payments over the course of a specified term until the entire loan amount is repaid, then that’s considered a form of an installment loan.
Read this to see some other loan types for credit users.
Payment Plans Available in Halifax
The frequency of the installment payments that you make in order to fully repay the loan can vary, and typically include:
- Monthly
- Weekly
- Bi-weekly
- Accelerated bi-weekly
Monthly is most common and is usually the option that comes with the lowest payment amount. That said, you’ll be paying more in interest over the term of the loan. The other three options usually come with payments that are slightly higher than monthly payments, but usually allow the loan to be paid off faster and with less money paid toward interest.
The payment plan that you get will depend on what you want, what you’re able to qualify for, and what your lender in Halifax is willing to provide you with.
Do you know what the true cost of borrowing is? Click here to find out.
Can You Get an Installment Loan With Bad Credit in Halifax?
In order to get approved for an installment loan, you’ll need to have good credit, just like with any other conventional loan. A higher credit score means the lender is taking on less risk and will usually afford you with a lower interest rate. A lower score, on the other hand, means you’ll be a bigger risk for the lender and could mean you won’t be able to secure a loan.
But what if you have bad credit? Can you still get approved for an installment loan in Halifax? Yes, you can, but you’ll usually have to obtain your loan from other sources in Halifax aside from a conventional lender or bank.
There are alternative lenders in Halifax who deal specifically with bad credit borrowers. Instead of focusing on your credit score, they’ll place more emphasis on your income, bank account, collateral, debt-to-income ratio, and up-to-date financial behaviour.
Many of these loans are also known as ‘no credit check loans‘ because some alternative lenders don’t check your credit score at all. If you have a really bad score, these types of loans might be attractive to you.
It should be noted, though, that bad credit loans usually come with higher interest rates, so you’ll need to factor that into your decision about whether or not a bad credit loan is worth the extra expense.
Read this to learn what bad credit lenders look at when assessing loan eligibility.
Long- Vs. Short-Term Installment Loans
You have the option to choose a long-term or a short-term installment loan. There are pros and cons to each.
Long-term loans usually come with smaller loan payments because you have more time to repay the full loan amount. This makes long-term loan payments more affordable and therefore more attractive to many borrowers. That said, a longer term means that more interest will be paid by the end of the term, which makes the loan more expensive. Plus, they’ll take longer to pay off.
Short-term loans come with slightly higher payments, which can make this a more unattainable option for those who can’t afford higher payments. However, they don’t take as long to pay off and less interest will be paid by the time the loan amount is fully repaid.
The Difference Between a Payday Loan and an Installment Loan
There are a few differences between payday loans and installment loans in Halifax:
Payment term. Installment loans are usually repaid within months or even a few years. Payday loans, on the other hand, come with extremely short repayment terms. Usually, these loans must be paid back within two weeks, or when the borrower receives their next paycheck.
Check out this infographic about the payday loan cycle.
Payment frequency. Whereas installment loans are repaid in installments, payday loans are repaid in one lump sum once the next paycheck comes in.
Interest rate. Payday loans are known for their exorbitant interest rates, making them difficult to repay after interest is tacked on. Installment loans come with rates that are much lower, though the rates can be quite high for borrowers in Halifax with bad credit scores.
Loan amount. Payday loan amounts are usually for no more than $800 to $1,000, while installment loan amounts can be much higher than that, depending on the borrower’s credentials.
For more information about payday loans in Halifax, click here.
Installment Loans For Debt Consolidation
There are several reasons why consumers in Halifax choose to take out installment loans. Paying for home improvements, medical expenses, car repairs, or even big family vacations are only some of the reasons why a loan might be required.
But installment loans can also be taken out for the purpose of consolidating debt. If you have several outstanding loans, some of which come with very high-interest rates, you may be able to secure an installment loan at a low rate to pay off all outstanding debt and be left with one loan. Not only does this makes things easier to manage, but it also makes things more affordable if you’re able to secure a low-interest rate.
Looking for another type of debt management product? Try reading this.
Do You Need a Loan to Cover Your Expenses?
If an installment loan sounds like something that you could benefit from, let the experts at Loans Canada help point you in the right direction. We’ll help you find the right lender and installment loan in Halifax to help you out of any financial predicament.
