📅 Last Updated: October 13, 2023
✏️ Written By Lisa Rennie
🕵️ Fact-Checked by Caitlin Wood
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How To Get A Personal Loan

Steps To Apply For A Personal Loan In British Columbia?

Step 1. Check Your Finances
Before applying for a loan, be sure to prepare your credit and finances for inspection. You can check your credit score and report by requesting a free annual copy of your credit report from Equifax and TransUnion. Understanding where you stand as a borrower will help you choose a lender that will work with you.
Step 2. Find A Lender
Now that you have a clear understanding of finances, you can find a lender whose eligibility requirements match your financial situation.
Step 3 – Apply For Loan
Most lenders have an online application form you can fill out within a few minutes. You’ll need to provide basic information such as your name, address, and contact details. You’ll also need to provide some financial information such as proof of income and employment.
Step 4 – Wait For Approval
Most online personal loan lenders have automated their underwriting process, so you should receive an answer within a few days, some may even get back to you within the day. If you’re approved, you’ll receive a contract with the details of the loan. Be sure to review its contents before signing the dotted line.
Step 5 – Receive Your Funds
Once you’ve signed your loan agreement, your lender will send you your funds shortly after. Some lenders will directly deposit your funds into your bank account, while others may send it via e-transfer.

What If Your Lender Asks You To Input Your Banking Credentials? 

Many online lenders will use instant bank verification (IBV) to verify your identity and income. Typically, you’ll have to enter your banking credentials via a secure portal which is often hosted by IBV providers like Plaid, Flinx and Yodlee. 

Instant bank verification involves immediate validation of your personal information, after which the lender is sent a temporary copy of your bank statement. This entire process not only saves you and your lender plenty of time, but it’s also safe thanks to robust encryption that protects your sensitive data.

High-Cost Credit Personal Loan Regulations In BC

BC is one of the few provinces in Canada with high-cost credit regulations in place. In BC, a high-cost credit lender is one that charges at least 32% annual percentage rate (APR).

The High-Cost Credit Products Regulation under the Business Practices and Consumer Protection Act governs high-cost credit products and lenders to ensure that consumers are treated fairly.  

Max Interest RateIn BC, there is no maximum interest that a high-cost credit lender can charge, as long as the APY does not exceed 60%, as per Section 347 of the Criminal Code.
Fee CapsWhile there are no provincial caps on fee charges, there are federal rules. The total fees, cost and interest of a high-cost personal loan cannot be more than the criminal interest rate of 60% APY.
Do Lenders Require A License?High-cost credit lenders must be licensed in BC and comply with requirements under the Business Practices and Consumer Protection Act. This license number must be clearly displayed on the high-cost credit lender’s storefront or website.
Debt Collection RulesWhen collecting debt, high-cost credit lenders have rules to follow under the Business Practices and Consumer Protection Act. Lenders cannot: 
– Collect a debt payment before the due date.
– Require information that would give the lender direct access to a borrower’s bank account.
– Use account information for any purpose other than to process a pre-authorized payment.
– Use threatening, intimidating or coercive language in an attempt to collect unpaid debt.
– Communicate with the borrower’s family, neighbours, friends, or employer in a manner that is considered harassment.
– Collect debt payments until the borrower has been informed in writing.
– Communicate with a borrower to collect a debt until five days after written notice has been provided.
Source: BC Business Practices and Consumer Protection Act

Types Of Personal Loans In BC

Typically, if you’re looking for a personal loan to help cover an unexpected expense or make a large purchase, you have three main options to choose from:

  • Unsecured Loans – An unsecured personal loan is what you might refer to as a classic personal loan. It’s a sum of money provided to a borrower, based on their creditworthiness, income, etc. No security or collateral is needed. 
  • Secured Loans – On the other hand, a secured personal loan does require collateral such as a vehicle, piece of equipment, property, etc. The asset acts as security for the lender and can help those with credit issues get approved for a loan. However, do note that if you default on your loan, the lender has the right to seize the asset to pay off the remainder of your loan.
  • Cosigner/Guanator Loans – For consumers with poor credit or who don’t have an asset to offer as collateral, a guarantor loan or cosigner loan could be a good alternative option. Here, someone who has better credit and finances than you will cosign the loan, which will help you qualify for the loan. This provides the lender with extra security because if you default on a payment, your consigner or guarantor will be responsible for the payment. 

Requirements For Personal Loans In BC

While lenders in British Columbia will have their own unique borrowing requirements, there are a few basics that all consumers should be prepared to meet, including but not limited to:

  • Be a Canadian citizen or permanent resident
  • Be the age of majority (19 years old)
  • Have a stable source of income (meet income requirements)
  • The ability to afford your payments
  • A reasonable credit score (not all lenders check credit)
  • An active bank account 

Most lenders will also require the following documentation:

  • At least one form of government-issued I.D
  • Proof of income (bank statements or pay stubs)

How To Increase Your Chances Of Qualifying For Personal Loans In BC

To boost your odds of qualifying for a personal loan in BC, consider the following:

Get pre-approved. During the pre-approval process, your lender will assess your finances to provide you with an estimate of the loan amount you may qualify for and the interest rate you will be charged. Getting pre-approved will help you understand your eligibility for a loan.

Pay off some debt first. Your debt load will play a role in your ability to get approved for a personal loan in BC. The lower your debt, the better your chances of loan approval. Take some time to pay down your debt before applying for a loan to increase your chances of approval.

Use a loan comparison platform. You can quickly compare loan providers and loan products across Canada by using an online loan aggregator. The loan amounts and interest rates that populate are based on your personal and financial information. 

How Much Will A Personal Loan Cost You In British Columbia?

The cost of your personal loan will depend on a number of factors including your interest rate, term length, and loan amount.

  • Interest Rate – Your interest rate is one of the main factors that affect the cost of your loan. The higher your rate the more interest you’ll pay and vice versa. 
  • Term Length – Generally speaking, the longer your term length the more interest you’ll pay over the course of your loan. It is recommended that you choose a shorter term if you can afford it. 
  • Loan Amount – The amount you borrow will also impact the amount of interest you pay. When taking out a loan, never borrow more than you can comfortably repay. 

Fees To Lookout For 

Loan fees are another cost to consider when taking out a personal loan in BC. These fees can significantly increase the cost of your loan, making your loan more expensive than you originally thought. Before signing an agreement with your personal loan lender, be sure to ask about these fees: 

  • Insurance Add-Ons – Many lenders may try to convince you to purchase loan insurance. This is an optional service that you can add to your loan. It is not mandatory for approval.  
  • Prepayment Penalties – If you want to pay off your loan early, ensure your lender does not charge any prepayment fees. 
  • Late Payment Fees – Be sure to check how much your lender charges for late payment fees. Late payment fees generally cost between $25 to $45. 
  • Loan Origination Fees – Check to see if your lender charges any processing fees like loan origination. Depending on the lender, they may charge 0.5% to 8% of your loan amount.
  • Upfront Fee –  Any lender that asks for an upfront fee is not a legitimate lender. In Canada, it is illegal for a lender to demand fees before providing the loan. If they want to charge you any processing fees, they will deduct them from the loan amount itself. 
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Can Personal Loans In BC Improve Your Credit?

Generally speaking, a personal loan can be used as a tool to help build credit. Just keep in mind that credit scores react differently and it will take time to see any improvement. If you’re taking out a personal loan and are interested in building healthy credit, make sure you follow all of these tips:

Don’t Take Out A Loan You Can’t Afford

Take out a personal loan that you can actually afford to pay back and one that you actually need. Taking on debt you can’t afford in hopes that it will improve your credit is never a good idea. 

Make Sure Your Lender Reports To A Credit Bureau

Work with a lender in British Columbia who officially reports to Canada’s credit bureaus (Equifax and TransUnion). Some lenders may only report to one of the bureaus, which means only one of your credit scores will reap the benefits of your timely payments.

Make Your Payments On Time

Payment history is a big part of building healthy credit. This is why it’s important to follow your payment schedule properly and always make your payment on time. Also, consider how additional unnecessary debt (consumer credit card debt) could affect your ability to afford your loan payments. 

Can You Get Personal Loans In BC On Employment Insurance (EI)?

Yes, you can get approved for a personal loan in BC if you’re currently unemployed and collecting EI. Lenders typically require borrowers to be employed and earn a regular income, but some may accept non-employment income, including EI, disability insurance benefits, Canada Child Benefit (CCB), and others. 

That said, you’ll likely pay higher interest on your loan if you’re not currently working as this may place the lender at a higher risk. 

Places To Help You Get A Job In BC

For help finding a job, you can use the services of employment agencies in BC. These companies connect employers with job seekers. 

Here are a few job agencies in BC that you can use to start your job search:

STRIVE Recruitment

STRIVE Recruitment has been helping Canadians find work since 2008. The company specializes in corporate administration, accounting and finance, and manufacturing and operations industries. Job seekers can find work with dozens of employers within STRIVE Recruitment’s network, including Fortune 500 firms.

STRIVE Recruitment offers the following:

  • Direct resume uploading and job application
  • Online job board
  • Online resources to optimize your candidacy and job search efforts 

McNeill Nakamoto Recruitment Group

The recruitment team at McNeill Nakamoto Recruitment Group always has their finger on the pulse of available employment opportunities in BC. The team has over 50 years of combined experience in the recruitment industry, helping countless candidates find work that closely matches their desires, experience, and qualifications.

Features of McNeill Nakamoto Recruitment Group include the following:

  • One-on-one resume review 
  • Interview preparedness sessions
  • Online job board
  • Temporary staffing solutions

Express Employment Professionals

Express Employment Professionals helps job seekers all across Canada, including BC. The recruitment team provides a comprehensive range of employment solutions, including full-time, part-time, and temporary employment in several industries.

Express Employment Professionals offers the following features:

  • ExpressJob app
  • Online job search function
  • Training resources for career development
  • Access to commonly-used forms

Should You Use Credit Cards Or Personal Loans In BC?

You might be reading this and wondering if you couldn’t simply use your credit card to handle whatever financial situations might come your way while living in British Columbia. While using your credit card certainly comes with benefits, personal loans have their own. Let’s explore some of the differences between these two valuable credit products.

Benefits Of Using Credit Cards In BC

  • They can help you build and improve your credit through monthly payments
  • They allow you to finance a variety of expenses without immediately draining your bank account
  • Many credit cards come with reward points, travel insurance, discounts, etc.

The Downside Of Using Credit Cards In BC

  • They can make it too easy for you to overspend
  • If not handled responsibly, they can cause a cycle of bad debt through high-interest rates and late penalties
  • They open up the possibility of theft and identity fraud

Benefits Of Choosing Personal Loans In BC

  • They offer you the potential for fast, large sums of cash
  • Depending on the size of the loan and the health of your credit, they can be relatively easy to be approved for
  • Payments are made through affordable  installments
  • The money you receive can be used for any expenses that come up

The Downside To Choosing Personal Loans In BC

  • Not making your payments on time can be bad for your credit and finances
  • Penalty fees may apply when bills go unpaid
  • If you have bad credit, approval might not be easy and interest rates can be high

What Credit Score Do I Need To Be Approved In British Columbia?

While this also depends on your lender’s specifications, generally a credit score of 650 or above will give you the best chance of getting approved for a personal loan in British Columbia. If your score is below that point, you may still be approved. However, it’s important to know that your interest rate might be higher the lower your credit score is.

Federal Financial Assistance Programs In BC

Employment Insurance (EI)Learn More
Canada Child Benefit (CCB)Learn More
Maternity/Parental LeaveLearn More
Federal Disability Tax CreditLearn More
Compassionate Care BenefitsLearn More
GST/HST Tax CreditLearn More
Green Tax CreditsLearn More

Alternatives To Personal Loans In BC

If you require additional financial help, there are several public programs available in BC that you may be eligible for:

Other Financial Assistance Programs In BC

Other assistance programs are available in BC in addition to the government programs mentioned:

Rent Assistance

BC Housing’s Rental Assistance Program provides eligible low-income families with financial assistance to help cover the cost of rent. Depending on the location, families of three can receive $1,108 per month. While families of four or more can receive up to $1,250 per month.

Utility Assistance

BC residents who have difficulty covering their electrical or gas bill payments may be eligible for a utility supplement. The program is meant to help residents avoid having their utilities cut off due to missed payments. 

Food Banks

Dozens of food banks are scattered throughout the province of BC to provide food products to families who struggle to pay for groceries. Food Banks BC runs a membership program made up of more than 100 hunger relief agencies across BC.

Crisis Supplement

BC residents who face emergency situations may be eligible for a one-time payment to prevent immediate physical danger to themselves or the removal of a child. An emergency or disaster supplement is also available.

Bottom Line

A personal loan can be a useful financial tool if managed properly and responsibly. If you’re looking to apply for a personal loan in British Columbia, find a reputable lender that you’re comfortable working with. Shop around for an interest rate and payment plan that fits into your budget and ultimately, choose a loan you can afford.

Personal Loan FAQs

Can I get a no credit check personal loan in British Columbia?

Yes, if you have bad credit and would like to avoid having your credit checked, there are many online lenders who’d be willing to lend to you based on other financial factors. This includes income level, employment stability, debt-to-income ratio, and more.

Can I get a bad credit personal loan in British Columbia?

There are many alternative lenders in British Columbia who offer personal loans to individuals with bad credit. So long as you have a steady income and a reasonable amount of debt, then you can qualify for a personal loan.

How do I improve my chances of getting a personal loan in British Columbia?

You can increase your chances of approval in a number of ways. For one, you can work on improving your credit score by reducing your debt and making on-time payments. You can also improve your chances of being approved by offering an asset to secure the loan. The added security you provide to the lender will also allow you to negotiate better rates and terms.

How will I get the money from my personal loan?

While this depends on your lender’s regulations, your loan funds will likely be deposited directly into your bank account.

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