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The average home price in New Brunswick is the lowest in Canada, but it is also the province with one of the lowest minimum wages. While the cost of living in NB may not be as expensive as Toronto or Vancouver, there are still many New Brunswick residents who require loans and other credit products to afford things. A versatile credit product you can use in NB is a personal loan.
What Is A Personal Loan?
A personal loan is a lump sum of money, usually between $500 – $35,000, that you can borrow from a lender. Depending on your needs, you can usually choose between a short-term or a long-term loan, though most range between 6 months and 60 months. When repaying your loan, it’ll include interest which legally cannot be more than 60%. Repayment terms can vary, but you’ll usually have the option of monthly, semi-monthly, weekly or bi-weekly payments.
High-Cost Credit Personal Loan Regulations In New Brunswick
Some provinces in Canada have implemented regulations surrounding high-cost credit products, such as payday loans, debt consolidation loans, and unsecured installment loans, to name a few. These are products that come with high interest rates and fees. So far, only BC, Alberta, Manitoba, Quebec, and Newfoundland have these specific legislations in place, with Ontario and New Brunswick potentially following suit with their own proposals.
In New Brunswick, a bill to create a new Consumer Protection Act has been recently proposed. Bill 16 passed a second reading in November 2023, which would consolidate various regulations covering several requirements under one piece of legislation.
Among other things, the new Consumer Protection Act would include high-cost credit. businesses operating in New Brunswick that offer high-cost credit products would need to be licensed. Further, specific information and disclosures must be included in loan contracts, including information regarding cooling-off periods.
In the meantime, any rules surrounding high-cost credit products in New Brunswick specifically would fall to federal laws and regulations. For instance, lenders cannot exceed the federal Criminal Code interest rate limit of 60% (APY).
| Description | Criminal Interest Rate | |
| Annual Percentage Rate (APR) | APR factors in all the fees and interest costs. | 47% |
| Effective Annual Rate (EAR) Or Annual Percentage Yield (APY) | EAR/APY factors in all the fees and interest costs, but it also factors in the effect of compounding interest. | 60% |
*Note: As part of the 2023 Budget, the Canadian government will reduce the APR criminal interest rate from 47% to 35% APR starting 2025.
Benefits Of A Personal Loan
Personal loans can be used to finance a number of things, but it has more advantages than its versatility. A personal loan can help you save money, make things affordable, improve cash flow and potentially improve credit.
Saves Money On Interest
While the interest rate you get depends on your lender in New Brunswick and the strength of your income, credit, and overall financial health, personal loans often come with lower interest rates than credit cards and payday loans. Interest is the biggest cost factor of loan, so a lower rate can save you a lot of money in interest.
Can Cover Large Expenses
All credit cards come with a credit limit that you can’t go over without incurring a penalty charge. With a personal loan, you can get loans up to 35k and more. This makes large expenses affordable as you can spread the costs over many months or years.
Improve Cash Flow
Personal loans are paid in fixed installments over an agreed period of time. With large purchases broken down into affordable and fixed monthly payments, you’ll be better able to budget. Moreover, without having to pay your purchase upfront, you’ll have more cash in your bank to direct to other aspects of your life.
May Improve Credit
If your lender reports your payments to the credit bureaus, it can help build your payment history. However, depending on how responsibly you repay your loan, it may positively or negatively impact your credit.
Cost Of A Personal Loan In New Brunswick
There are numerous factors to consider when calculating the cost of your personal loan. The interest rate, fees, and term length, all impact the total cost of your loan. While a lower interest rate and fees are key components to reducing the cost of your loan, so is a shorter term length.
While longer terms offer lower payment options, it also costs more in interest. In general, it’s recommended that you choose a term based on how much you can afford rather than the lowest payment option (as these typically have longer terms). Below we’ve illustrated how the term length can affect the cost of your loan.
| Short-Term Personal Loan | Long-Term Personal Loan | |
| Loan Amount | $10,000 | $10,000 |
| Interest Rate | 15.5% | 15.5% |
| Loan Term | 3 Years (36 months) | 5 Years (60 months) |
| Monthly Payment | ~$349 | ~$240 |
| Total Paid | $12,564 | $14,400 |
| Total Interest Paid | $2,564 | $4,400 |
Should You Use A Credit Card Instead Of A Personal Loan?
Much of the time, New Brunswick residents turn to their credit cards when they need to cover an expense. This is a good choice when:
- The expense is not too big. If you can pay, the amount within the same billing cycle, a credit card can be a better option. However, if you’re planning on carrying the balance over for several months, a personal loan may be a better option as it typically comes with lower interest rates.
- Your goal is to earn rewards. If you have a good rewards system on your credit card, it may be worth using your credit card.
When Should You Use A Personal Loan Over A Credit Card?
- You have a very large expense or overall bill. If you’re looking to finance a large expense, a personal loan is generally a better option, as it spreads your cost over several months. While you could pay the minimum monthly payments on your credit card, you’ll be accruing high interest on your unpaid balance.
- You want to avoid high-interest rates. Credit card companies often charge high-interest rates, which can end up costing you much more in the long run than a personal loan would.
3 Steps To Get A Loan
How To Apply For A Personal Loan In New Brunswick?
What Do Lenders Look For In An Applicant In New Brunswick?
- Your Credit. Your chosen lender in New Brunswick may perform a “hard inquiry” by requesting a copy of your credit report and score from Canada’s credit bureaus (Equifax, TransUnion). They do this to see how responsible of a credit user you’ve been in the past and trustworthy you’ll be with your future payments.
- Your Finances. They might also examine your income, employment record, bank account balances, and debt payment history. Any personal loan in New Brunswick can take months to pay in full, so they’ll want to make sure that you can comfortably afford all your payments.
- Your Assets. Most lenders in New Brunswick will allow you to offer up your valuable properties (home, car, real estate, etc.) as collateral to secure large personal loans. While it’s optional, offering collateral is a way to get approved when your credit isn’t up to their standards. Just be aware that they’ll then have the right to confiscate and sell your asset if you default on your loan payments for too long.
What Is Instant Bank Verification For Personal Loans In New Brunswick?
Traditional bank verification processes can take days, which can slow down the loan application and approval process. Instead, instant bank verification speeds this process up. As the name suggests, instant bank verification allows lenders to verify accounts nearly instantly. This allows lenders to quickly verify the legitimacy of a loan application while ensuring that customer information remains secure.
Ultimately, instant bank verification lets lenders quickly and accurately assess a person’s current financial situation before proceeding with final loan approval.
Can You Get A Loan On Employment Insurance In New Brunswick?
If you’re currently out of work, you may have started collecting Employment Insurance (EI) benefits to tie you over until you find employment. But how will being on EI affect you when you apply for a personal loan in New Brunswick?
After all, income is one of the key factors that lenders assess on applications. Without traditional employment income, how will your lender view your application if your income source is coming from EI?
The good news is that many alternative lenders accept several forms of non-traditional income, including benefits like EI. These lenders are able to practice more flexibility compared to banks when it comes to loan requirements. They also tend to offer a faster, more streamlined loan approval process.
However, borrowers should understand that not earning a regular income will likely mean a higher interest rate on a personal loan. As such, taking out a loan while on EI will likely be more expensive.
Places To Help You Get A Job In New Brunswick
If you’re having trouble finding work on your home, perhaps using the services of a staffing agency might help. Several employment agencies operate across the province, helping job candidates with or without degrees get jobs.
Here are a few staffing agencies in New Brunswick to help you get your next job:
Universal Staffing
Located in Moncton, NB, Universal Staffing has over 20 years in the staffing industry helping connect employers and job seekers. The company specializes in a range of industries, and places candidates in temporary, permanent, freelance, part and full-time, and internship positions. Recruiters work one-on-one with candidates to customize a solution that suits each person’s needs.
Protrans Personnel Services
Protrans Personnel Services is a full-service staffing company with corporate headquarters in Dieppe, NB. Since 1994, the agency has provided local jobseekers with flexible and customized services to meet goals and find rewarding careers. Protrans Personnel Services specializes in placing job candidates in jobs under the transportation, manufacturing, warehousing, and administrative industries.
Advantage Personnel
Advantage Personnel has over 3 decades of experience helping connect local businesses with job candidates. Anyone looking for work in New Brunswick can tap into the company’s vast experience and client networks to help them reach career goals.
Advantage Personnel can customize their services to suit your needs. Whether you’re looking for temporary or permanent, part-time or full-time, or freelance or contract work, Advantage Personnel will work with you to find what you’re looking for.
Alternatives To Personal Loans In New Brunswick
If you need financial assistance, a personal loan may help. But this is just one solution to consider.
Several personal loan alternatives are available in New Brunswick that can help alleviate your financial woes. Here are a few to consider:
| Financial Resource | Link |
| Social Assistance Program | Learn More |
| New Brunswick Disability Benefit | Learn More |
| New Brunswick Child Tax Benefit (NBCTB) | Learn More |
| New Brunswick Low Income Seniors Benefit | Learn More |
| New Brunswick Workers Benefit | Learn More |
Other Financial Assistance Programs In New Brunswick
Along with the programs mentioned above, other financial assistance programs are available in New Brunswick to help cover life’s basic expenses. You can quickly and easily find these services using www.211.ca.
Here are a few resources available on the site:
Food Banks
New Brunswick is home to several food banks in cities across the province. Here are a few you’ll find on 211.ca:
- Stanley Just Friends Food Bank: 30 Centennial St, Stanley, NB, E6B 1A8
- Fredericton Community Kitchens: 65 Brunswick St, Fredericton, NB, E3B 1G5
- Greener Village: 686 Riverside Dr, Fredericton, NB, E3A 8C2
- Natoaganeg Community Food Centre: 1 Church Road, Eel Ground First Nation, Eel Ground, NB, E1V 4E6
Homeless Shelters
New Brunswick residents who are struggling to keep a roof over their heads may find emergency housing at one of the following shelters:
- Out Of the Cold: 63 Brunswick St, Fredericton, NB, E3B 1G5
- St John House for Men: 65 Brunswick St, Fredericton, NB, E3B 1G5
- Grace House for Women: 275 Brunswick St, Fredericton, NB, E3B 1G8
- Miramichi Adult Emergency Shelter: 316 Regina St, Miramichi, NB, E1V 2X9
Utility Assistance
The cost of electricity and gas is becoming too expensive for many New Brunswick residents to afford. To offset these expenses, low-income residents may be eligible for the Emergency Fuel Benefit. This provides up to $550 per year to assist with heating their homes in the winter.
Rent Supplement Assistance Program
Financial assistance is available in New Brunswick through subsidized rents in qualifying rental units to those who need affordable and suitable housing. Eligible low-income households will have their rent reduced to 30% of their household income through the Rent Supplement Assistance Program.
Homeowner Repair Program
The Homeowner Repair Program is available to low-income homeowners who need financial help updating or renovating their homes. The financial assistance from this program comes in the form of a loan. A portion may not have to be paid back.
The maximum forgivable loan per eligible home is $15,000. The forgivable loan amount is based on a sliding income scale and the repairs required and can be paid back over a 15-year term.
Where Can You Find Consumer Protection Offices In New Brunswick?
Businesses operating in New Brunswick must comply with specific rules that dictate how consumers are treated. The Consumer Protection Act in New Brunswick oversees the province’s consumer protection laws that businesses must follow. These rules are meant to protect customers and ensure they are treated fairly.
If you feel that a local business has mistreated you, you can reach out to the Financial and Consumer Services Commission Office:
- By telephone: 1-866-933-2222
- By email: info@fcnb.ca
- In-person: 225 King Street, Suite 200, Fredericton, NB, E3B 1E1
NB Personal Loan FAQs
Why was my personal loan application rejected?
Should I use a personal loan to consolidate my credit card debt in New Brunswick?
How big of a personal loan can I get in New Brunswick?
Will a Personal Loan Affect My Credit?
Bottom Line
Personal loans are versatile credit products that you can use to finance virtually any expense. If you need to cover an expense or purchase, a personal loan can be a great option as it offers you the ability to spread your payments, making it more affordable. Apply with Loans Canada to find the best lenders and loans in New Brunswick that meet your financial needs.
