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Like the rest of Ontario, the town of Brampton is always increasing in size and popularity. The only problem is that any city can be a highly expensive place to live. With that in mind, it’s a great idea to have options available to you when it comes to covering the cost of large purchases or unexpected expenses.
Enter the installment loan. If you’re looking for an affordable financing options or are interested in more information about how an installment loan in Brampton can help, keep reading.
Try to avoid these common mistakes on your loan application, click here.
Simply put, an installment loan is a specific amount of money that you can apply for through various lenders across Canada. If you are deemed eligible for the loan, it will typically be given to you via direct deposit, although some lenders offer other options.
Once you have the money in your bank account, you’ll begin paying it back through equally divided installments with interest. Your payment plan may last several months to several years, depending on how much you’ve borrowed and what your particular lender’s policies are.
That said, the majority of lenders will offer you a range of options when it comes to how often you’ll make installments, such as:
Before you apply for an installment loan in Brampton, be sure to ask your chosen lender about their repayment plan options, as well as how much your loan could cost you overall when you factor in payments, interest, and fees.
That said, the length of your repayment plan term is also extremely important to consider. For instance, while a shorter term means you will be out of debt quicker, this will usually result in your lender charging a higher interest rate, making it more expensive under certain circumstances. Then again, although a longer term may be lead to a lower rate, your debt would of course last longer, unless your lender allows you to make accelerated payments at any point.
Since defaulting would be unhealthy for your finances, it’s essential to only apply for a loan amount that you can comfortably afford and always let your lender know if you think you’re in danger of missing a payment. While every lender’s policies are different, most can help you readjust your repayment plan with a bit of prior negotiation.
As previously mentioned, there are two types of lenders that will offer installment loans in Brampton.
A bank or credit union would be known as a prime lender, where you can usually apply for a larger loan, earn a more reasonable interest rate, and have more negotiation power when it comes to your repayment plan.
However, prime lenders are often more difficult to be approved by, as their qualification standards are more restrictive, at least if you want the best conditions for your loan. Eligible borrowers may need certain financial strengths, such as a good income, high credit score, and loan security, like a cosigner or collateral.
Do you know the difference between a bank and a credit union? Check this out to learn.
A private or alternative style institution is commonly known as a subprime lender, where installment loans may be smaller, come with slightly higher rates, and less negotiable repayment plans.
This is because most subprime lenders are more willing to approve you if you have a low income, bad credit, or have recently gone through financial delinquency, such as a consumer proposal or bankruptcy. While it’s much easier to earn approval here, loan conditions are generally tighter because they think you have more chance of defaulting.
All this said, it’s very important to prepare yourself properly for the application process, whether it’s with a prime or subprime lender. After all, your lender must confirm that you can afford all the associated costs before they can approve you for an installment loan in Brampton.
As such, be sure to take the following steps before actually submitting your application:
Is a personal loan a good option for an emergency expense? Find out here.
If you have a credit score within the bad range (300 – 600), it may be due to a history of defaulting on your credit products, bankruptcy, or another serious debt-related incident, or even because your identity was stolen. Unfortunately, no matter the cause, a low credit score can make it much tougher to get approved for a favorable installment loan.
Don’t worry, because there are plenty of bad credit lenders located throughout Brampton and the rest of Ontario. Although bad credit installment loans may be smaller, more expensive, and less adjustable, any payments you make on-time should elevate your credit score until you can apply with a prime lender.
If you have bad credit, but would like to apply for an installment loan with better terms and conditions, there are ways that you can strengthen your application, such as by earning a more substantial income or, if you wish, by providing loan security.
Traditionally, this is done by finding a cosigner or by offering up one of your assets as collateral. Either of these forms of security would act as an insurance policy for your lender, thereby lowering the risk they are taking by approving you as a client.
Since an installment loan is cash in your bank account, you’re free to use it for any expense that comes your way. However, being that this product is also a large responsibility, we recommend that you only spend your loan money on things that are truly necessary, such as consolidating your unpaid debts.
The good news is that there are many Brampton lenders who offer installments loans specifically for the purpose of debt consolidation, meaning the act of paying down multiple high-interest debts at once. When accomplished, this would leave you with only one monthly payment plan to keep up with, which can significantly reduce the amount of interest you’re paying yearly.
Nonetheless, because debt consolidation implies added risk for them, most lenders will once again prefer you to have positive financial strength when you apply, such as a high income, decent credit score, as well as some security.
For a more detailed look at debt consolidation loans, check out this article.
Although debt consolidation is one of the more beneficial and efficient things you can do with your installment loan, there are a ton of other responsible ways to use the funds you’ve borrowed, including but certainly not limited to:
If you’ve been looking for the right installment loan in Brampton, don’t worry, because Loans Canada is here to help. All you have to do is contact us or check out our website to discover our services. Applying for an installment loan has never been easier!
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