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Just about everyone in Nova Scotia has some form of debt, whether it’s debt from a car loan, home loan, student loan, or credit cards. Nova Scotia consumers take out debt in an effort to pay for large expenses that their accessible capital is not able to cover. That’s exactly why installment loans in Nova Scotia are made available: to help hard-working Canadians get access to the cash they need to cover some of life’s biggest expenses.
Click here to learn more about loans in Nova Scotia.
What is an Installment Loan?
Any loan that requires repayment in the form of installments (as opposed to a paying back in one lump sum or taking out a revolving line of credit) is considered an installment loan. That means loan products like auto loans, student loans, mortgages, and personal loans all fall under the umbrella of installment loans in Nova Scotia.
Each payment you make will include a principal portion (which goes towards paying off the outstanding loan balance) and an interest portion (based on the interest rate you are offered). While the most common repayment terms involve paying back the loan in monthly installments, arrangements may also be available for payments to be made in semi-monthly, bi-weekly, or weekly installments.
The list can literally go on and on. If you have a pressing expense that you need to cover but your current finances aren’t sufficient enough to handle it, an installment loan in Nova Scotia can be taken out to meet these financial needs.
What is Needed to Take Out an Installment Loan in Nova Scotia?
The specific requirements needed to apply for an installment loan in Nova Scotia may vary from one lender to the next, but there are typical criteria that will usually be required, such as the following:
Have a steady income
Have a valid Social Insurance Number
Be at least 18 years old
Have a valid address
Have valid contact information, such as a phone number or email address
Have government-issued ID
Are Credit Checks Required For Installment Loan Approval in Nova Scotia?
Many installment loans in Nova Scotia require a credit check, so if you are applying for this type of loan, you would be well-advised to pull your credit report to check your score. You can check with either Equifax or TransUnion to get a hold of your report.
For some information about credit checks in Canada, read this.
While your credit score will be a crucial component of your credit report, this document will paint a complete picture of your financial health and history. It will include pertinent pieces of information, such as your payment behavior (missed payments versus on-time payments), defaults, bankruptcies, and so forth.
Check this out if you’d like to know more about the bankruptcy process in Nova Scotia.
Pulling your credit report will also give you a chance to see if there are any errors on your report that could be unfairly lowering your score. If you find an error, report it right away and have it investigated and corrected.
If your credit score is less-than-perfect, it would be best to take steps to improve it before you apply for an installment loan in Nova Scotia. But if you know that you have bad credit and need the money before having a chance to improve it, there are loan products out there that are specifically geared towards bad credit borrowers.
It should be noted that these types of loans come with high-interest rates and even collateral in some cases, so be sure to do your homework first.
If you are responsible with your loan and make your payments on time and in full each month, an installment loan in Nova Scotia can improve your credit score, as long as your lender reports your account to one of the credit bureaus. However, this can take some time and will likely require that you make improvements in all facets of your financial life.
There are a couple of ways in which installment loans can help give your credit score a boost. The biggest way is by your payment history. All payments must be made on or before the due date. Another way that they can help is by diversifying the type of credit you have on the books.
That being said, installment loans can also negatively affect your credit score if you miss payments or are late making payments on a regular basis. In addition, taking out an installment loan will add to your overall debt, which could negatively impact your credit score depending on other financial factors.
Want to know what else bad credit lenders look at when assessing loan eligibility? Check this out.
Frequently Asked Questions
How do installment loans compare to payday loans?
Depending on the terms, installment loans are generally the better option. In Canada, loans are typically capped to a 60% maximum rate. However, payday loans get a special exemption and can charge upwards of 600% depending on the province. Payday lenders can charge such a rate because they are short-term loans of only 2 to 8 weeks. They also expect you to repay the loan in full as one large payment. If you fail to repay them, the additional interest and fees can be insurmountable. Installment loans on the other hand can be much more manageable. A similar amount can instead be repaid over 8 or more weeks in smaller payments. And because they are not considered payday loans, you benefit from a lower interest rate.
Do I have to be employed to get a loan in Nova Scotia?
You may be able to qualify with some lenders even if you are unemployed. However, some form of regular income is required to be approved. Income from government programs, such as CCB, CPP, and EI, can be considered for a loan approval. In order to validate these types of alternative income, you may be required to produce bank statements and government documents. This will prove that you are receiving such funds into your bank account. They should also demonstrate how long you will be receiving the income for. Ultimately, you need to show the lender that you are capable of making repayments over the term of the loan.
What are the benefits of a secured loan?
Securing your loan means you are offering your lender a form of collateral, such as a vehicle or home. If you are unable to repay your loan, the collateral can be forfeited to the lender to settle the debt. Lenders prefer secured loans because of the added security. This can translate to a higher loan approval amount, a better interest rate, or waiving certain fees. It can also mean being approved for loans you wouldn’t qualify for otherwise due to having poor credit.
Get the Installment Loan You Need Today
Being able to secure an installment loan in Nova Scotia can definitely come in handy if there is a major expense that you’re unable to pay for on your own without some assistance. Depending on what you need the money for, you may be able to take out an installment loan in varying amounts. Make sure to take a hard look at your current finances, pull your credit report, and call Loans Canada to find the right installment loan for you in Nova Scotia.