Short Term Loans Quebec
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Written by Lisa Rennie
Best Short Term Loans Quebec (Online) August 2021
Note: Loans Canada does not arrange or underwrite mortgages or any other financial service. We are a simple referral website that provides free educational resources to help Canadians make better decisions.
For those living in Quebec who find themselves struggling to cover a pressing expense every now and then, a short term loan might be the option you’ve been looking for. Regardless of what expense has suddenly fallen on your lap, a short term loan in Quebec may be just what you need to bail you out of your financial situation.
Looking for a regular loan in Quebec, take a look at this other article.
What is a Short Term Loan?
Short term loans are basically loan products that require full repayment within a relatively short period of time. Typically, these loan terms are for anywhere between one and two years.
During this time, the loan balance must be repaid in installments over regular pay periods. Each payment includes a principal portion as well as an interest rate portion. The payments are made until the full balance is repaid.
The interest rate charged will depend on several factors, including your credit score, income, debt load, and the lender supplying you with the loan.
Are Short Term Loans the Same as Payday Loans?
It’s not uncommon for short term loans to be confused with payday loans, mainly because of their short repayment periods. But they are completely different loan products and here are the main ways in which they differ:
Repayment – As mentioned earlier, short term loans are repaid in installments until full repayment is due. Payday loans, on the other hand, are repaid in one lump sum, usually by the time borrowers receive their next paycheck.
Interest rate – Short term loans in Quebec typically come with higher interest rates than conventional long-term loans, but they pale in comparison to the interest rates that come with payday loans. Lenders in the payday loan sphere charge borrowers upwards of 500% or more in interest, making payday loans a much more expensive loan product.
Approval requirements – Short term loans are relatively easy to get approved for in comparison to conventional loans, but payday loans are usually approved with far fewer requirements needed. Payday lenders don’t usually ask for anything more than a person’s income, age, and contact information.
What is the Approval Process For Short Term Loans?
Generally speaking, lenders will want to assess the following factors before approving you for a short term loan in Quebec:
Income – Obviously, lenders will want to make sure that you will be able to afford your loan repayments. As such, they will want to see what your income is like and compare it to the amount of money you wish to borrow.
Making a low income? Here’s how you can get out of debt fast.
Debt – The amount of debt that you have on the books can make it more difficult for you to repay your loan. Even if your income is high, your outstanding debt obligations could be taking up much of what you bring in every month. Ideally, your debt amounts should not be too much relative to your income in order to get approved for a short term loan in Quebec.
Credit Score – Lenders prefer to work with borrowers with good credit scores. The higher the credit score, the better. This shows lenders that borrowers are responsible with their debt and have a history of making timely payments in full every billing period.
On the other hand, a low credit score is usually reflective of a bad payment history whereby payments have been late or missed. Low credit borrowers are considered riskier in the eyes of lenders, making it more likely that a loan application would be denied.
Can I Get Approved For a Short Term Loan With Bad Credit?
Getting approved for a short term loan in Quebec will prove to be more difficult with bad credit. That said, it’s still possible. If you have bad credit and are looking for a short term loan, you may have more success by working with a lender who deals specifically with bad credit borrowers.
Rather than focusing on credit scores, these lenders will place more emphasis on income and debt. If you can show bad credit lenders that you have a healthy income and a relatively low debt load, you may be able to qualify for a bad credit loan.
However, it should be noted that borrowers with bad credit are sometimes charged a higher interest rate than borrowers with good credit.
In addition, it’s important to be on the lookout for lenders who claim to guarantee approval for short term loans. Legitimate lenders cannot guarantee loan approval without looking into the credentials of borrowers. Any lenders who promise loan approval up front are likely involved in scams and should be avoided.
Trying to identify a loan scam? Watch this video.
If time is on your side, you’d be well advised to take steps to improve your credit score before applying for a loan. A higher score will afford you with more options when it comes time to apply for a short term loan, and you’ll have a much better chance of getting approved with more favourable loan terms.
There are several things you can do right now to give your credit score a boost over the next few months:
- Make all payments on time every month
- Make payments in full
- Utilize no more than 30% of your credit card limit
- Don’t close out any old credit accounts that still have outstanding balances on them
- Pay down your debt
What Can I Use a Short Term Loan For?
There are seemingly endless ways to use the funds from a short term loan in Quebec, including any one of the following:
- Car repairs
- Home improvements
- Last minute emergencies
- Travel expenses
- Building credit
Whatever pressing expense you need to cover, the funds from a short term loan can help.
For more information about the expenses, you can tackle with a short term loan, click here.
How large can a short-term loan be?
I have poor credit. Can I still qualify for a short-term loan in Quebec?
What happens if I pay off my short-term loan early?
Apply Today For a Short Term Loan In Quebec
Not every loan type is right for everyone, which is why you should do your due diligence to apply for the one that suits your specific financial situation. If you’re ready to apply for a short term loan, be sure to get in contact with the professionals at Loans Canada today to find the best short term loan product for you.