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Truro is a small city in the centre of Nova Scotia, with a population of just over 12,200 residents. Also known as “The Hub of Nova Scotia,” Truro is situated at the juncture of the Canadian National Railway (Halifax – Montreal) and the Cape Breton/Nova Scotia Railway (Truro – Sydney). Right in the middle of the town is the beautiful Victoria Park, which contains over 400 acres of trees, waterfalls and walking trails. Truro is also the birthplace of Sir Adams George Archibald (1814-1892), who was one of the 36 Fathers of Confederation. He was the Nova Scotia Liberal Party’s chosen representative to travel to Charlottetown, Prince Edward Island in 1864 to attend the first conference on Canadian Confederation. It was, in part, thanks to him that Nova Scotia was made part of the Confederation in 1867.
Want to know more about loans in Nova Scotia? Read this.
Loan Myths
Unfortunately, there is a lot of misinformation surrounding loans in Truro. Many myths have been created due to gossip, making some people apprehensive about the idea of applying for a loan in Truro. Some of the more frequently heard myths include, but are not limited to:
- Getting a loan requires perfect credit. The first myth of many. While having favourable credit is beneficial in a number of ways, it is not always a necessary factor during the loan application process. Most lenders in Truro simply want to see a record of financial strength on the part of the would-be borrower in Truro.
- If you need a loan to help cover the cost of your regular expenses, it’s a sign that you are bad with money. Simply not true. Getting a smaller loan to help with daily expenses is common among many people, especially if they already have a family and mortgage to look after.
- A house is the only asset that you can use to secure a loan. While your house can be used as collateral to acquire a secured loan, you can also use other pieces of personal property that are of value, such as your car, plot of land, or small business.
- You can only have one loan at a time. Actually, while it is not always financially sound to have multiple loans, you are able to have more than one loan if you can afford it. For example, many people have both a mortgage and car loan to deal with.
- Applying for a loan is always a time consuming and hectic process. Another myth. While your loan application may take some time and effort to complete, the process will be efficient if you are organized with your relevant financial documents and you fill out the application honestly.
I Want To…
Preparing to Apply for a Loan in Truro
One of the best things you can do to increase your chances of getting a loan and help the application process go well is to be prepared with all the information that your lender in Truro will require. Disorganization and financial instability are two warning signs that lenders look for when considering clients for approval. After all, these can be signs of future debt problems, maybe even a risk of bankruptcy. For those reasons, there are things that you should do before applying:
- Perform a credit check. This is a step that every credit user in Truro and Canadians, in general, should do at least once a year. Before applying, performing a credit check and seeing your credit score is a good way of knowing if your financial situation will support the debt you could be taking on.
- Calculate how large your purchase is and how much you’ll need to finance it. It’s best not to show up on your lender’s doorstep with only a vague idea of how much you need to borrow.
- Do a lot of research and find the best lender to suit your needs. Remember, lenders in Truro will vary in terms of their payment schedules and interest rates. Make sure you take the time to find a lender that is not only a legitimate company but one that will suit your financial situation.
- Calculate how much you can afford each month during the payment process. Depending on the size of your loan, it could be months, if not years, and take tens of thousands of dollars to pay in full. That’s why it’s extremely important not to take on a debt that you might have trouble affording later on.
- Decide if you need to apply for a “secured” or “unsecured” loan. A secured loan means that collateral is involved, which can be seized in the event of defaulted payments. Unsecured loans require no collateral, but you could be subject to a lawsuit from a collection agency if you fail to make payments.
Loans and Your Credit Score
A loan is a good instrument that you can use to improve both your credit and financial future. For that reason, it’s imperative to be responsible with your loan payments, as they will have a definite effect on your credit score. For instance:
- Payments that are made on a regular, punctual basis and are in their full amounts will cause your credit score to increase, improving your credit.
- Payments that are defaulted, meaning they are received late, are not in their full amounts or are missed altogether will cause your credit score to drop significantly. This can ruin your credit for months, possibly years.
So, if you are up to date with your loan payments and your lender in Truro is a legitimate company that reports your progress to one of Canada’s main credit bureaus (Equifax or TransUnion), you should see your credit affected in a positive way. A high credit score will also help you get a low-interest rate for any future credit products.
Nevertheless, if your credit score is already low before you decide to apply for a loan in Truro, you won’t automatically be denied. Yes, a high credit score is always good to have, but many lenders in Truro won’t judge it when considering you for a loan. What is necessary, as was mentioned, is that you have a good history of financial health. If a lender sees that you will be able to afford your payments in full, your chances of getting that loan will improve. On the other hand, if you display signs of being a bankruptcy risk, your chances are going to drop, so it’s best to get your finances in order before applying.
This is why all Canadians need to be monitoring their credit scores.
Click here for more information about how credit scores are calculated.
Frequently Asked Questions
- Do I need a high credit score to receive approval? As we stated in the section above, many lenders in Truro do not use your credit score as a deciding factor. However, good financial stability is key.
- Which is a better choice, a credit card or a loan? This depends on what you’re trying to afford. Less expensive stuff, like most consumer goods, can be bought with a credit card, assuming you’re able to pay the monthly balance. Larger sums, like you would generally see with houses and cars, are probably easier paid for with loans.
- How can I increase my chances of approval? To increase your chances, you can:
- Check your credit report before applying. This is one of the best ways for both you and your lender in Truro to know that you’re in a good enough financial state to afford the loan.
- Pay off any previous debts you might have. A loan is only going to add to your debt load, so paying off any old debts (credit card bills, etc.) should happen before applying.
- Look into online lenders. When doing research for legitimate lenders, consider a company that performs their services online, just in case their loan process is better suited to your needs.
- Organize and prepare all necessary documentation. Your lender is going to review your finances prior to approving you. Disorganization will make them skeptical of your creditworthiness.
- Can I still apply for a loan without a credit history? Yes, you can still apply without a history of credit usage, as long as your lender can confirm that you’re financially responsible. However, it can be beneficial in other ways to have a solid credit history.
- Why do some lenders ask for an advanced security deposit? Be very careful when selecting a lender! No legitimate lender will ever ask for an advanced deposit before approving you for a loan. That practice is illegal. If they try, do not give them any financial information and report them to the proper authorities. They are scam artists!
- Why did my bank keep reject my applications? Unfortunately, you might not match their specifications. Banks will generally require both a high credit score, solid income, and favourable debt history when selecting borrowers. However, banks are not the only lenders in Truro you can find.
- How will my loan affect my credit score? If your payments are managed well (on time and in full) your credit score will rise. However, failure to make payments on time, in full, or missing them completely will result in your score dropping.
- How long will it take before I get my loan? This depends on your lender in Truro and the loan application process. Having all the required documentation ready for inspection, as well as filling out your application properly will speed things along. You should then receive the loan within a few business days.
- Is it possible to make my payments ahead of schedule? This also depends on your chosen lender. Advanced payments are not always an option. Some lenders will allow them but will require a penalty charge to compensate for their loss in interest fees, so make sure to ask them about this before you apply.
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