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If you’re living in Winnipeg, chances are you have tons of expenses to think about, some of them small and some of them large. You might be ready to spend your hard earned money to cover them immediately or charge them to your credit card so you can pay for them in a month’s time. However, there are plenty of other credit products available to Winnipeg borrowers, including personal loans, which can benefit you in many different areas.
What’s the Best Way to Use My Personal Loan in Winnipeg?
Since a personal loan is deposited as a specific amount of money directly into your bank account, there are plenty of ways you can use it in Winnipeg. Even today, there are still some restaurants and retail locations in Winnipeg that don’t accept credit cards. This is just one situation of many where personal loan money can come in handy. Loans Canada also recommends Winnipeg borrowers to use their loan for:
- Financial crises or other urgent costs that your income or credit cards won’t cover
- Expensive travel costs (plane tickets, hotel stays, travel insurance, etc.)
- Medical procedures and prescriptions that aren’t covered by Medicare
- Household maintenance and repairs
- Car-related maintenance and repairs
- Purchases that are too substantial for your credit cards or to pay immediately
Do you know what the true cost of borrowing is? Check this out?
When Are Credit Cards the Wrong Payment Option?
In reality, credit cards are not always the wrong payment method. In fact, they’re another convenient product that can benefit you in many instances. However, they can be the wrong choice in certain situations in Winnipeg, such as:
- When you’re trying to avoid the high-interest rates that many cards come with
- When you’re trying to avoid the revolving debt cycle they can cause
- When you’re paying for more expensive necessary costs
- When you want to calculate exactly how much your monthly payments will cost
- When you want to avoid the minimum payment trap
However, credit cards can be the right choice in some situations in Winnipeg, such as:
- When you’re paying for less expensive, unnecessary consumer costs
- When you use specialty card benefits (travel rewards, roadside assistance, etc.)
- When you’re able to make your monthly bills on time and in full
- When you only want to pay interest on what you’ve borrowed
- When you prefer the alternative of making minimum payments (this can cause terrible debt, so don’t make this a regular habit!)
I Want To…
How Large of Loan Will I Be Able To Get in Winnipeg?
There are many different lenders in Winnipeg that cater toward different credit product types. Additionally, no two lenders in Winnipeg have the exact same approval procedures. That being said, every lender’s goal is to take on clients who have a strong chance of paying them back in full and on time. So, during the application process, they’ll be examining things like:
- Your credit score
- Your gross monthly and yearly income
- Your current and previous sources of employment
- The value of the security (collateral) you offer (home, car, etc.)
- The strength of your cosigner’s finances (if you apply with one)
Comparing lenders in Canada? Read this beforehand.
What Documents Do Lenders in Winnipeg Look at When Considering My Application?
As we mentioned, the main thing that your lender in Winnipeg wants to confirm is your ability to afford your loan payments, including any interest and additional fees that apply. Therefore, some of the more notable documents your lender may look at include:
- Your credit report (score, rating, history, personal profile)
- Your bank statements from the last few months
- Your payment/debt history
- Your recent paychecks or other proof of your income
- Your employment record
- The valuation of your assets, usually done by an appraiser they’ve recommended
- Similar documents from your cosigner
Want to know what types of lenders will accept your cosigner? Find out here.
Getting Prepared For the Application Process
It’s important to be well organized, which is one way to show your lender that you’re a responsible Winnipeg borrower. Here are a few things you can do so that you’re properly prepared:
- Determine how much money you’ll actually need
- Calculate the total cost of your potential payments
- Make sure your payments will fit into your budget and won’t totally drain your income (think about your other essential expenses)
- Ask for a pay raise or take on a second job if you need
- Request a free copy of your credit report (available once per year from Equifax and/or TransUnion)
- Review your report for errors, then dispute them if you find any
- Request copies of all required financial documents from your bank
- Update any personal documents, if necessary (address, phone number, postal code, social insurance number, etc.)
- Have your assets appraised by an outside source to be certain you’ll get the best deal
- Have your cosigner perform these same tasks
- Improve your credit score as much as possible
- If needed, try looking into guarantor loans
What Does My Credit Need to Look Like to Receive Approval in Winnipeg?
The status of your credit often makes up a significant portion of the approval process, especially if you’re asking for a large amount of money. Some lenders in Winnipeg don’t perform credit checks when you apply. Nevertheless, having good credit is simply a healthy practice and may help you gain both approval and a lower interest rate, effectively saving you money.
Shopping for low-interest rates? Consider this.
If it is a mandatory procedure, one of the major credit elements the lender you choose in Winnipeg will inspect is your three-digit credit score which, in Canada, ranges from 300-900 and partially demonstrates your reliability as a credit user.
- Good credit = a score of 680 or higher
- Bad credit = a score of 620 or lower
Generally speaking, however, a score of 650 or higher should give you the best chances of approval and the lowest interest rates lenders offer. That number may need to be closer to 680 (ideally above) if you’re requesting a large amount (some personal loans can be up to $100,000) or applying for more expensive products, like mortgages.
Check out this infographic to learn how your credit score is calculated.
Improving Your Credit Score to Meet Your Lender’s Standards in Winnipeg
If your score is lower than 650 or you have bad credit, you may need to work hard to improve it, but it is possible. Try taking some of the following credit improvement measures:
- Pay all your other active credit products on time and in full
- Find a lender with a good reputation, who will report your progress to Equifax or TransUnion
- Don’t request a loan amount that exceeds your regular income
- Don’t rack up more unnecessary debt before or after you’re approved
- If you’re denied the first time, don’t apply over and over again (when a lender performs a hard inquiry into your credit report, your score drops)
Wondering how applying for new credit changes your credit score? Find out here.
For Winnipeg Borrowers, Loans Canada is the Solution
If you’re a credit user in Winnipeg and you’re interested in applying for a personal loan, we can help you with that. Contact us today and we’ll set you up with the right lending sources for your needs.