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Whether you live in a high cost of living area like Toronto, or a relatively affordable city like Regina, there will come a time where you need to borrow money. This could be to make a large purchase or simply to help cover your bills after an unfortunate accident or emergency. While there are several options when it comes to borrowing money, most people will opt for an installment loan.
Installment loans in Regina play an important part in the lives of thousands of people. However, before you go getting one to borrow more money, it is important to know how they work and what they can be used for.
What is an Installment Loan?
An installment loan in Regina is a broad term for loans where there is an agreement in place to repay the loan over time with recurring and scheduled payments. This term includes mortgages, car loans, student loans, personal loans, and several others. When used intelligently, installment loans can help you gain affordable capital for the things you need in life, or help you deal with emergencies.
These loans can be for various different amounts and have a range of term lengths. The amount you borrow and how long your term will depend on your lender, your finances, your credit, and your needs. Generally, the repayment plans available on these loans are either:
Choosing the right option will depend on your unique circumstances. For example, some people will like the smaller payments that come along with paying every week, while others will want to make fewer (albeit larger) payments and thus will decide to pay monthly.
Either way, be sure to only borrow an amount you are confident you will be able to pay back. Whatever you borrow, plus the interest will need to be paid back according to the agreed-upon terms. If you borrow too much, it could put a real strain on your finances and your ability to save for months or maybe even years.
Credit Score Required for an Installment Loan in Regina
Now that you know a bit about installment loans in Regina, what is the credit score required for these loans? Well, the short answer is that it depends. Each lender will have different rules and regulations when it comes to who they are willing to work with. Some may only take those with a score over 675, while others might be comfortable working with anyone over 550.
As a result, make sure you research lenders before you submit an application. The more research you do and the more places you consider, the better the chances that you will end up finding a quality lender who is willing to work with you.
Generally, the higher your score, the easier it will be to secure a loan. Not only that, but a better credit score will often get you a better interest rate and more favourable terms. Of course, larger loans will generally require a better credit score, so keep that in mind if you plan on borrowing a large amount.
Can You Get an Installment Loan With Bad Credit?
Does that mean if you have a bad credit score you will be unable to get an installment loan in Regina? Thankfully, it doesn’t. While some lenders who lend out installment loans in Regina will have credit score requirements, there are plenty of others out there who will work with anyone in most cases.
These alternative lenders will generally use other measures to judge the riskiness of borrowers, such as:
- Bank statements
- Debt to income ratio
- If you put up collateral
Of course, if you have bad credit, expect the interest rate on the loan to be a little bit higher to account for the additional risk you provide. That is unless you put up something for collateral. Even with bad credit, putting up collateral such as your home or vehicle could gain you access to loans with fairly low-interest rates. If this is the route you go, it is important to make all of your payments on time. If not, the lender could potentially seize the asset that you put up as collateral.
While some people are okay with simply getting one of these bad credit installment loans, others might want to improve their credit to get a better rate or terms. While this might seem insurmountable to some, it’s really not. There are several different things you can do to increase your credit. This includes:
- Ensuring all of your bill and credit card payments are made in full and on time
- Use credit responsibly and don’t overspend
- Not applying for new credit too frequently
- Checking your credit report for errors
- Keeping your credit utilization quite low (generally under 30% or so)
- Making sure old credit accounts are kept open
These tips and methods can certainly improve your credit over time, but it’s important to keep in mind that they’re not magic. It will take some major lifestyle changes and sacrifices to see an increase in your credit score. But the end result is worth all of the hard work as borrowing money will become very easy and affordable in most cases.
What Can You Use An Installment Loan For?
As briefly mentioned earlier, an installment loan in Regina can be used for nearly anything from a home, a car, a vacation, a new TV or just about anything you might need some money for. These loans are incredibly versatile and most of the time (except in some specific situations), most lenders won’t question what you are using a personal installment loan for.
However, just because it can be used for all of these different things doesn’t mean that it should. In general, it is recommended to use an installment loan for things you need, not for the things you want. If you borrow money for wants, it could end up costing you a lot in the long run.
Generally, there are a few things we recommend you use an installment loan for, including:
- To cover the costs of an unfortunate emergency
- To pay for an important home or car repairs
- To cover unexpected and important travel
- To help build up your credit
- In some cases, to consolidate high-interest debt
Payday Loans vs. Installment Loans
While an installment loan in Regina is a great option if someone needs some extra money, it isn’t the only option out there to consider. Another one that is quite popular is a payday loan. There are dozens of payday lenders in most cities and they advertise that they can get you the cash you need, fast.
So how do these loans compare to one another? While an installment loan can be for a larger amount and has a longer-term, payday loans are generally for a few hundred dollars up to a thousand or two. Their terms are also shorter, typically only two weeks. These types of loans can be very quick and easy to get, but will likely cost you more than a standard installment loan. They will have larger interest rates (sometimes up in the triple digits), so missing even a single payment can be troublesome.
These payday loans are for those situations where an installment loan simply can’t get you your money quickly enough. So while they are very convenient, that comes with a cost of higher interest rate and much shorter terms (know your rights before taking out a payday loan).
In most cases, an installment loan is a better and more affordable option than a payday loan. A payday loan will work in a pinch if you know you can pay it off quickly, but if not, it is best to avoid them as they have the potential to hurt your finances if you miss payments.
The Right Installment Loan for Your Needs
Whether you want to learn a little more about installment loans in Regina, have a question, or simply want to find a high-quality loan in your area, don’t hesitate to reach out to Loans Canada. We are experienced in the field and are sure we can help you out with your questions or concerns.