Online loans are becoming a popular option for many consumers in Canada for very good reasons. Online lenders have many fresh ideas for how they do business which benefits consumers immensely in conjunction with many other advantages. Before deciding if an online loan is right for you, take the time to learn about what they are, how you can benefit from them, and how they work.
An easy online loan is just what it sounds like: a loan that’s easy to get. Here are some features of an easy online loan:
Easy online loans don’t require the same stringent criteria that conventional lenders demand. More specifically, you may be able to qualify for an online loan with lower income or low credit scores. Some lenders may also approve your loan application without steady employment, as long as you have some form of alternative income to cover your loan payments, such as government benefits or a pension.
The loan application process is completed online. Because of this, you can typically apply for an online loan within a few minutes, and send your required documents directly through the lender’s website. As such, you usually don’t have to wait long before you get an answer about loan approval.
With an easy online loan, funds are usually accessible within a few hours after loan approval, and sometimes even sooner. Plus, the money is deposited directly into your account via direct deposit or e-Transfer, so it’s readily available.
There are a few easy online loan options available, some easier to get approved for than others. Here are a few options you can access online if you’re in need of fast cash:
Installment loans are a type of personal loan that provides you with a lump sum of money to cover any type of expense. They’re called “installment” loans because the money you borrow — plus interest and fees — must be repaid in installment payments according to a specific payment schedule and over a certain period of time.
Installment loans from online lenders are easy to get for a number of reasons. For starters, you often don’t need good credit if you work with a bad credit lender, though having a good score will afford you a lower interest rate. Easy installment loans online also don’t typically require any collateral, so you won’t have to put up any asset of value at risk.
Payday loans are one of the easiest and fastest loan options available. Unlike installment loans, you must repay the full loan amount and all fees by your next paycheque, which is why they’re called “payday” loans. You can get approved and funded within hours or even minutes. Plus, they’re very easy to qualify for and often do not require any credit checks, which means bad credit is ok.
However, payday loans are among the most expensive loan types out there. You could be paying an APR as high as 546%, depending on your situation. As such, payday loans should be a last resort after you’ve exhausted all other options.
If you own a vehicle outright with no outstanding car loan balance, you can use the car to get approved for an easy online loan. A car title loan requires that you use your car title as collateral to reduce the lender’s risk.
These loans are suitable for those who may have bad credit and can’t get approved for a loan without collateral. You can keep your car, but the lender can repossess it if you default on the loan.
With a car title loan, you can borrow up to 25% to 50% of the vehicle’s value. But these loans come with high interest rates, so be sure to budget accordingly.
To qualify for an easy online loan, you’ll need to meet the following criteria:
To apply for an easy online loan, follow these steps:
Use an online loan aggregator to pull up a list of lenders and the loans they offer. From there, you can quickly compare loans side by side to find the lowest interest rates and best loan terms.
Once you’ve narrowed down your options, gather all the required documents the lender needs to verify your identity and ability to repay the loan. Documents required for a loan typically include the following:
With all necessary documents in hand, you’re ready to apply for a loan with your preferred lender. If approved, you’ll receive the funds either via e-Transfer or direct deposit within 24 to 48 hours, sometimes less.
There are numerous benefits to applying for a loan online, including the following:
While online lenders do charge higher interest rates than banks, they still offer relatively affordable interest rates depending on your financial and credit profile. Rates vary between 3% and 47% on average, but no lender may legally charge more than 60% APR.
Many online lenders have automated their underwriting process which has made the approval process for online loans very quick. Most lenders will provide a response within 24-48 hours while others may provide an offer the same day.
A great thing about online loans is they’re rarely secured by collateral. This means you don’t need to pledge assets, like your home or car, to obtain financing. Without collateral, borrowing is much safer as you aren’t risking losing your assets in the event you default on the loan.
Banks and other traditional lenders don’t like risk which has caused them to be conservative on who they lend money to. While those with excellent credit and strong finances can qualify, those with bad credit or poor finances generally won’t qualify. Thankfully, online lenders have more flexible requirements. Many won’t put as much weight on credit scores as banks will. Moreover, they will use other information to evaluate creditworthiness such as income, job stability, debt level and overall financial health.
A hard credit check can damage your credit score. Banks and other traditional lenders will always do a hard credit check on every loan candidate because it is a major part of their due diligence. Online lenders, particularly payday lenders, will not do a hard credit check. Instead, they’ll use other information to determine your creditworthiness.
If you’re looking for financing, it is wise to shop around and seriously consider online lenders as an option. Take a hard look at your current financial state and financial goals to determine if online lending aligns with your financial needs. If you decide that online lending is for you, Loans Canada can help match you with the right online lender and financial product today.
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Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.
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