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When faced with our regular expenses or financial emergencies having a bit of extra cash can be a huge problem solver or, in some cases, a welcome gift. This is particularly true in the city of Toronto, where the cost of living can be high. That’s just one reason why an installment loan can be extremely useful.
Want to learn more about loans in Toronto? Check this out.
Traditionally, an installment loan is a lump sum of money that’s deposited directly into your bank account soon after your application has been approved. Beforehand, you and your chosen lender in Toronto will come up with a payment plan that works for your finances and involves you paying the loan back in increments, otherwise known as “installments”. These installments will also include an interest rate, which the lender charges for the use of their services. Make sure to ask your lender how much your loan will cost overall, including in this rate, plus any additional fees, then factor those numbers into your budget to make sure you can afford everything.
Click here to see how lenders arrive at interest rates.
Paying back your full installment loan balance may take several months to several years, depending on the amount you’ve requested and what your payment plan looks like. When it’s paid off, you’re free to apply for a second loan or move on.
As far as recommended uses for your installment loan, as we mentioned, your funds should show up as cash in your bank account. Therefore, you can use your loan for pretty much any expense in Toronto that comes your way. Some of our recommended uses include, but certainly, aren’t limited to:
That brings us to our next recommendation, using your Toronto installment loan to rid yourself of any outstanding consumer debt you might be carrying.
Technically, a debt consolidation loan works the same way as a regular installment loan. You would apply for a specific loan amount and would pay it back over time through installments with interest. However, in this case, you would have to inform your lender in Toronto that you’re using the loan to pay off certain debts, the overall goal is to eliminate them in one swift motion. This would leave you with just one monthly payment to keep track of, rather than many spread across different sources, which might have been the cause of your outstanding debts in the first place.
Make sure to read this before you apply for any type of loan.
Now, before you apply for a debt consolidation loan in Toronto, there are a few things to watch out for. While the same can often be said about any financial product, installment loans included, debt consolidation loans require a more strict application and approval process. Be sure to ask your lender in Toronto about their particular procedures, costs, and policies when it comes to debt consolidation loans. Nevertheless, they are a good option for those who have a lot of high-interest debt on their plate.
Here’s what to do when your debt consolidation loan application gets denied.
In Canada, credit scores range between 300-900 and are often used as a way for lenders to judge your creditworthiness. When you have “bad credit”, it means your credit score has fallen below the 560 mark. This can make it harder to qualify for loans and other credit products, as it signifies to your potential lender in Toronto that you’ve had trouble keeping up with your payments in the past. Unfortunately, bad credit can also make your interest rate higher, since your lender considers you more of a risky investment.
For more information about bad credit loans in Toronto, read this.
Generally speaking, a credit score of 650 or higher will give you the best chances of approval and lowest interest rates possible, particularly when applying with prime lenders, such as banks, where approval standards are more strict. That being said, depending on how much you’re applying for, you can still get approved for an installment loan with bad credit.
Check out this infographic to learn how credit scores are calculated.
If you’re planning to find a cosigner or offer collateral, be very careful, as there are certain risks involved when you take either path:
While we’re on the subject of bad credit, you might be wondering if there’s a way to get an installment loan where no credit check is involved, which is a common worry when:
Click here to find out how long information stays on your credit report.
In Toronto, most prime and sometimes even subprime lenders will use your credit score as a prominent deciding factor during the application process, but there are still ways you can get an installment loan with no credit check, including:
For more information about guarantor loans, look here.
If you’ve decided that an installment loan in Toronto is the right choice for your financial situation, check out Loans Canada. We’re ready and willing to set you up with the best lenders in Toronto. Contact us today or apply below!
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Aeroplan is a well-known travel rewards program run by Air Canada. The Aeroplan program boasts millions of members and is considered Canada’s top trav...
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