Express Loans

Express Loans

Are you dealing with a financial emergency or an unexpected expense? If your answer is yes, an express loan may be the right solution for you. Express loans are personal loans that can be obtained quickly through an online platform. There are many benefits to using express loans, although, before making a final decision on whether an express loan is right for you or not, it is crucial to gather and understand all the facts.

Searching for the best personal loans in 2019? Try looking here.  

Express Loan Application Process

The best thing about an express loan is it’s quick, easy and can be obtained online. In addition, you don’t need to work around banker’s hours, you can complete an application in the comfort of your home at any time. The application process is quite simple and can be summarized in six steps.

Pick the type of loan you want. There are many loans out there for different purposes with varying terms. Determine exactly what you need the loan for, how much you need and for how long. Compare various lenders to get the best conditions possible for your unique needs.

Review eligibility criteria. Before submitting your application, it’s important to review the minimum eligibility criteria. This doesn’t mean you’re guaranteed to get approved, but if you don’t meet the minimum requirements, you’re guaranteed not to get approved. Potential criteria are your age, residency, credit score, and employment or income.

Submit an application. To complete an application, you will need some personal information handy. This could include government-issued identification, proof of income, and social insurance number.

Get approved. Depending on the lender, approval can be instantaneous or slightly delayed. Some lenders may ask for additional documentation before giving full approval. You shouldn’t have to wait longer than two weeks before knowing if you got approved or not.

Receive money. Once you’ve been approved, the funds will either be sent directly to your bank account or to the payee on your behalf.

Make loan payments. The second you receive the loan you’ll be responsible for making loan payments until you don’t owe any more money to the lender. Setting up automatic payments and payment reminders is a good idea to help you stay on track.

The True Cost of Borrowing
Do you know what the true cost of borrowing is? Find out here.

Applying For an Express Loan Online

One of the greatest benefits of express loans is the application is almost always completed online. A lot of efficiencies are obtained using the internet for loan application processes, but there are some downfalls too. Below is a summary of all the advantages and disadvantages of online express loans.

Advantages

No Collateral

The majority of online loans are unsecured which means that you are not required to pledge collateral to obtain financing (click here to learn more about collateral). In the event that you default on a loan, you won’t risk losing your car, home, or other pledged assets. There will be other consequences if you default on your express loan, such as a serious hit to your credit score.

Rapid Approval Time

Nearly instantaneously an online lender can tell you whether or not you’re approved for the financing you’re applying for. In addition, all of the relevant details for your loan can be provided right away, such as your repayment period and payment amounts. Banks and other similar lenders can take a long time to get you this information.

Click here to learn about fast approval short term online loans in Canada.  

Easier to Get Approved

Banks and credit unions don’t like high risk and, for the most part, they can afford to be picky. This isn’t a problem if you have great credit, but if you don’t, you’re going to have challenges getting a loan with a traditional lender. Even if you do get approved, don’t expect to get favourable terms.

On the other hand, online lenders are much more lenient with approval. If your credit score isn’t the greatest, online lenders will look at other factors related to creditworthiness. For example, an online lender may evaluate historical utility bill payments in a candidate.

Disadvantages

Payday Loans

When shopping around for online loans and lenders, you will come across payday loans often. On the outside, payday loans seem like a great deal. They’re quick, have short repayment periods, and credit checks are not mandatory to obtain financing.

While payday loans seem amazing, it is easy for anyone to be fooled. Payday loans have extremely high interest rates and the short repayment period may not give you enough time to pay what you owe. Sometimes payday loans are necessary if they’re your only option, but before accepting one, be sure to read the conditions carefully and understand all the aspects of the loan.

How to Break The Payday Loan Cycle
Check out this infographic for a detailed looked at the payday loan cycle.

Scams

Unfortunately, with the advancement in online lending and banking, scams have become more prevalent. By applying for financing online, you risk applying to a fraudulent company which could really hurt your finances. To avoid falling for scams, use your common sense and gut feeling. If something seems too good to be true or a lender is asking for information that you feel is inappropriate, find another lender.

More Responsibility Placed on the Borrower

One advantage of borrowing from banks or other similar, traditional lenders is they provide you with a lot of information. All the information they provide can help you navigate through your options and better understand what is going on with your finances. Finally, there is a certain level of comfort and security when working with banks because you know they’re the real deal.

Read this to see more fast ways of borrowing money.  

With online lending, the responsibility is placed on the borrower to educate themselves about specific loans and financing principles. Otherwise, borrowers risk making a bad decision that could negatively impact their finances. That being said, even if using banks, credit unions, or virtually any other lender, it is still important to shop around and do some due diligence of your own, you should be doing this with online lenders too.

Too Much Debt

Finally, with the ease of online lending, consumers have to be wary of taking on more debt than they can handle. Banks avoid lending to individuals who already have a lot of debt because of the high risk to them so it’s hard to run into this problem with traditional lenders. Because online lending is quick to obtain, it is very easy for individuals to get into debt if they aren’t cautious.

Canadian Credit Score
Take a look at this infographic for everything you need to know about credit scores.

Using an Express Loan to Improve Your Credit

There are several factors that impact your credit score for better or for worse. How effectively you perform in relation to these factors will determine whether your credit score improves or declines. Below is a summary of all the factors that influence your credit score calculation.

  • Payment history. One of the biggest factors used to determine your credit score is payment history. If you pay bills or other obligations later than 30 days, your credit score will take a hit.
  • Credit utilization. This is the percentage of credit you are currently using. Credit utilization is another big factor affecting your credit score. As a general rule of thumb, your credit utilization percentage should be 30% or less.
  • Duration of credit use. The length of time you’ve had credit impacts your credit score too. Usually, the longer you’ve had credit, the better. This is because lenders have more financial history to refer to when determining your creditworthiness.
  • Credit type variety. Having various types of credit is advantageous for your credit score. A mortgage, credit card, line of credit, and car loan are all examples of different credit types.
  • New Credit Applications. The amount of times you apply for financing impacts your credit score because the potential lender will pull your credit report. The lower your number, the better. Keep in mind that if you pull your own credit report, it won’t have an effect on your credit score because it is considered a soft inquiry as opposed to a hard inquiry.
  • Outstanding balances and debt. The lower your outstanding balances and debt, the better your credit score will be. Lenders don’t want to extend credit to people who already have a high amount of debt.

Since payment history is such a crucial component of your credit score, by obtaining an express loan and making full payments on time, your credit score will benefit. Any type of personal loan or credit will have the same effect on your credit score. What’s important is that you make your payments on time and in full to build a healthy payment history.

Click here to find out how your credit score is affected by the money you owe.

Can I Get Guaranteed Approval?

Guaranteed approval means that you know you will be approved for a loan before completing and submitting an application. No loan will ever have guaranteed approval. If it does, that is actually something to worry about!

Lenders don’t like risk, so to avoid risk, they will do a check up on your financial history and perform due diligence procedures. Without gathering this information, no lender can guarantee you’ll get approved because they haven’t determined if you’re a risky candidate or not. If a lender says they guarantee approval, it is likely a scam, some things are absolutely too good to be true. Steer clear from lenders who guarantee approval or make other larger than life promises.

Read this for some information about loan insurance scams.

Express approval means that your loan application will be reviewed and either approved or declined very quickly. Online express loans absolutely have express approval, hence the name. It is important to understand that guaranteed approval and express approval are not the same.

How to Find the Right Loan

Every individual has different financial needs, goals, and circumstances. What might be the right loan and lender for you may not be the right loan and lender for someone else. For this reason, it is important to do your own due diligence on lenders and the financial products they offer.

Looking for an online loan with affordable monthly payments? Check this out.  

Performing extensive research can be a challenge when you need fast cash in an emergency, but it is a necessary step that will save you stress in the future. Just like with any type of loan or financial product, online loans do come with a certain amount of risk, you could end up paying ridiculous amounts in interest or owe the principal in a week if you don’t know what you’re signing up for and who you’re working with. The silver lining is, with online lenders offering express loans, research can be done rapidly since all the information you need is on the Internet.

Loans Canada can help match you with the right lender based on your unique financial needs, reach out today for assistance.


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Veronica is a freelance writer who specializes in creating unique and educational personal finance content. She has extensive experience writing blog ...

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Loans Canada and its partners will never ask you for an upfront deposit, upfront fees or upfront insurance payments on a loan. To protect yourself, read more on this topic by visiting our page on loan scams.