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Whether you live in Prince Edward Island (P.E.I) or any other province in Canada, a personal loan can help cover a number of costs. If you’re currently looking to apply for a personal loan in Prince Edward Island, Loans Canada can help.
Are Personal Loans Available In Prince Edward Island?
Yes, personal loans can be accessed via a bank, credit union or online lender in Prince Edward Island (P.E.I). It can be a very useful financial tool when used responsibly. Residents of Prince Edward Island can take advantage of these personal loans for a wide variety of reasons, from covering the cost of unexpected expenses to paying for large purchases.
Features Of A Personal Loan
- Loan Amount – While the amount you qualify for depends on your lender and your financial health, you can generally find personal loans between $500 – 35,000.
- Loan Term – Personal loans usually come with terms between 6 months to 5 years.
- Interest Rate – Interest rates on personal loans can vary widely from 3% to 46.97% on average. Interest rates cannot exceed 60%, rates 60% and over are considered illegal.
- Funding Method – Personal loan come in the form of cash which is usually deposited directly into your bank account or via e-transfer.
What Can You Use An Installment Loan For?
A personal installment loan is a versatile credit product that can be used for a number of expenses, including but not limited to:
- Any larger expenses that you don’t want to charge to your credit cards
- Any unexpected costs that need immediate attention
- Voluntary or necessary medical costs that aren’t insured by your Medicare
- Household repairs, renovations, additions, landscaping, etc.
- Vehicle-related costs (purchase, fuel, repairs, insurance, registration, etc.)
- Travelling, vacations, holidays, etc.
Requirements For A Personal Loan In PEI
When applying for a personal loan in P.E.I, your lender will require certain information to see if you qualify for the loan. In general, you’ll be required to provide your:
- Personal information (name, address, date of birth, SIN (optional), contact information, etc.)
- Financial information (bank statements, savings, debt and payment history, etc.)
- Employment information (employment record, current job, regular income, etc.)
- Credit information (credit score, credit rating, credit report, credit history, etc.)
- Added security (optional) (Assets information or a co-signer’s financial, employment, and credit information)
What Credit Score Do You Need For A Personal Loan In PEI?
In P.E.I and the rest of Canada, credit scores range from 300-900. The closer to 900 your score is, the better your chances of getting a loan.
- 660 or above (good credit) = better chances of approval and a lower interest rate (costing you less over time)
- 659 or below (fair to poor credit) = worse chances of approval and a higher interest rate (costing you more over time)
What’s The Difference Between An Personal Loan And Payday Loan
Will A Personal Loan Affect My Credit?
Before you apply for a personal loan in Prince Edward Island, one very important consideration to take into account is how your credit can fluctuate with your loan.
Will Your Lender Report Your Personal Loan Payments In PEI?
After you’re approved, your lender will begin relaying your payment activity to one or both of Canada’s major credit reporting agencies (Equifax and TransUnion). However, it’s important to note that not all lenders report payments to the credit bureaus.
If they do report your credit information, the credit reporting agency (or credit bureau) they do business with will then compile your information into a “credit report”, which is a record of all your credit accounts and the transactions you’ve made (good or bad) over a certain number of years.
Will Your Personal Loan Payments Affect Your Credit?
As your lender reports your payments, both good and bad, it’ll build your payment history which is a common factor used in the calculation of your credit scores. Generally speaking, the more positive your payment history, the more likely your credit is to improve.
When Should You Use A Personal Loan Over A Credit Card?
Before applying for your personal loan in Prince Edward Island, it may be worth checking if there are other options, in particular, credit cards. If you have a credit card that can cover your expense, is it worth using it over a personal loan?
When To Choose A Personal Loan
- Need A Larger Amount – Personal loans are often a better choice when you want an amount of money that surpasses the spending limits of most credit cards.
- Lower Interest Rate – If you plan on carrying your balance from month to month on your credit card, it can rack up a lot in interest. A personal loan can be a better option as they often have lower interest rates than the average credit card.
- Want Steady Payments – With a personal loan, payments are divided into equal payments over a predetermined schedule.
- Better Terms – A personal loan gives you the option of using your valuable assets (car, house, land, etc.) to secure more money and a lower interest rate.
When To Choose A Credit Card
- Minimum Payments – Credit cards come with a minimum monthly payment, which you can follow to avoid penalties.
- Avoid Interest – If you’re able to pay back the entire amount within the credit card billing cycle, you can avoid paying any interest.
- Smaller Payments – Credit cards are often a better way to pay for small to moderate consumer/retail expenses, such as groceries, clothes, gifts, etc.
- Credit Card Perks – Sometimes credit cards come with added benefits, such as travel/reward points and different kinds of insurance. For example, some credit cards extended the manufacturer’s warranty when you make the entire purchase on the card. As such, if you’re buying an expensive TV or sound system, it may be worth using your credit card than a short-term personal loan.
How To Increase Your Chances Of Getting A Personal Loan In P.E.I?
Every lender’s loan application process will be slightly different. So, when you find yourself a legitimate lender (look them up in the Better Business Bureau database to be sure they aren’t scammers), ask them to clarify their own procedures.
Generally speaking, however, there are a few measures you can take to make yourself look better to your lender (raising your creditworthiness), such as:
- Pay down all your other, more pressing debts
- Try not to take on any more unnecessary debt
- Have a stable source of employment/income
- Arrange all your personal and financial information for inspection
- Find a co-signer (if your credit is poor)
- Get an idea of what your assets are worth (if you’re applying for a secured loan)
Additional Reading
Frequently Asked Questions
How do I increase my chances of being approved for a personal loan in P.E.I?
In general, increasing your credit score, reducing your debt level, and boosting your income will improve your chances of qualifying for a personal loan in P.E.I. Adding a co-signer can also improve your chances of being approved as it reduces the risk of lending for the lender. Similarly, securing your loan with an asset will also increase your chances of qualifying as your asset acts as protection for your lender in the event you default on your payments.
Is a payday loan or a personal loan better for me?
Payday loans are the most expensive way to borrow money. With APRs as high as 400% – 600% and an average repayment period of 14 days, payday loans can be very dangerous if not used with extreme caution. On the other hand, personal loans have much lower interest rates and more flexible repayment periods ranging from 3 months to 10 years. Whenever possible, choose a personal loan over a payday loan.
Can I still get a loan in P.E.I if I lost my job?
Yes, while most lenders may be reluctant to provide you with a loan if you have no job, there are some lenders in P.E.I who provide loans if you have a non-traditional source of income. This includes incomes from government financial assistance programs such as Canadian Child Benefit (CCB), pension, Employment Insurance (EI), Quebec Pension Plan (QPP), and more. However, it’s important to know that these lenders often charge much higher interest rates due to the added risk.
Bottom Line
When comparing personal loans in Prince Edward Island be sure to also consider how much loan money you want, what you’ll use it for, and your ability to finance your payments.
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