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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.
Personal Loan Rules You Should Know To Protect Yourself
Currently, only 5 provinces have specific legislation pertaining to high-cost credit products, and PEI is not one of them. However, lenders within the high-cost credit space are still required to follow certain rules when it comes to how they conduct business.
Maximum Interest Rate
PEI doesn’t have regulations on the maximum interest a lender can charge, but federal regulations exist. More specifically, lenders must comply with the criminal interest rate set by the federal government.
| 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.
Licensing Requirements
Lenders who operate under the payday loan sphere are required to be licensed under the Payday Loans Act. However, lenders who don’t provide payday loans are not required to be licensed under the Act.
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)
Instant Bank Verification For Personal Loans In PEI
Instant Bank Verification (IBV) is a real-time way for financial institutions to verify bank account information as part of the personal loan application process. IBV usually involves a third-party service that links a consumer’s bank account through online banking, after which the service obtains a temporary bank statement.
Traditionally, manual bank verification would take days to complete. With IBV, the process is done within minutes, which helps expedite the entire loan process.
Not only is IBV a much faster way to verify bank account information, but it’s also secure. Loan applications don’t have to worry about their sensitive information being exploited, as various layers of security are used to ensure a secure process.
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)
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.
- 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)
Places To Help You Get A Job In PEI
Having a stead income is one of the most, if not, the most important factor lenders consider when approving a borrower. If you’re struggling to get a job, consider working with an employment agency. By working with these companies, you can take advantage of experienced recruiters who know where the right job openings are for the right candidates.
Here are a few top-rated staffing agencies in PEI:
| Next Level Group | Next Level Group has been in the employment recruiting industry since 2011. Their team of recruiters are certified and focused on finding staffing solutions for those looking for work in PEI. They’ll take the time to understand the needs of each job seeker and match them to the right job opening and employer. |
| Halliwell Consulting | Halliwell Consulting specializes in connecting local businesses and would-be employees in PEI. The company employs a seasoned team of recruiters who implement effective recruiting methods to ensure the perfect match. They provide all types of work placements, including permanent, temporary, and contract positions in various industries. |
| Humble Consultancy and Recruitment Services | Humble Consultancy and Recruitment Services assist jobseekers in Atlantic Canada. The company carefully reviews each candidate, including their skills and experience, to ensure they’re matched with the right employer and job opening. |
Alternatives To Personal Loans In PEI
A personal loan may be a good option if you need a temporary financial fix. But it’s not the only option available. There are alternative solutions to personal loans in PEI to consider, including the following:
| Financial Resource | Link |
| PEI Social Assistance Program | Learn More |
| PEI Seniors Independence Initiative | Learn More |
| PEI Children’s Wellness Tax Credit | Learn More |
| PEI AccessAbility Supports | Learn More |
| Seniors Hearing Aid Rebate Program | Learn More |
Other Financial Assistance Programs In PEI
Whether you need help covering the cost of groceries, paying your rent, paying your utility bills, or you have some other need, various programs are available to help.
Many of these programs and services can be found by looking at www.211.ca, a website that connects Canadians with local services as needed. Here are a few that you’ll find on 211.ca:
Emergency Shelters
If you need a temporary place to stay, whether it’s because you’ve been unable to afford housing or because you’re escaping a dangerous situation, there are emergency shelters available to take you in. Some do not advertise their addresses, so you’ll need to contact them directly. Here are a few in PEI:
- Bedford MacDonald House – Overnight Shelter: 184 Weymouth Street, Charlottetown, PE, C1A 4Z3, Canada
- Park Street Emergency Shelter: 15 Park Street, Charlottetown, PE, C1A 5G7, Canada
- Chief Mary Bernard Memorial Women’s Shelter: Confidential Location, Lennox Island, PE
Free Clothing
To make sure you always have something to wear, particularly during the colder months of the year, there are a handful of outlets that provide free donated clothing items to residents in need:
- Life’s Necessities: 10 Maple Hills Avenue, Charlottetown, PE, C1C 1N2, Canada
- Gender-Affirming Gear Recycle Program: 81 Prince Street, Charlottetown, PE, C1A 4R3, Canada
- Free Store: 109 Water Street, Summerside, PE, C1N 1A8, Canada
Affordable Housing
Hope for Homes provides two programs to help low-income Indigenous people living off-reserve:
- Seniors Housing Program: Low-income people aged 55 years and older may qualify to live in self-contained units at a low market rent rate.
- Affordable Rental Program: Low-income persons or families can apply to live in self-contained apartments at a low market rent rate.
Affordable Rental Program
The Family Housing Program allows residents of PEI to apply for affordable rental housing in Family Housing units located in 9 communities throughout the province. Alternatively, residents may apply for a rent supplement benefit to help cover the cost of private housing. In most cases, rent is based on 25% of total household pre-tax income.
Home Heating Assistance Program
The Salvation Army – Maritime Division offers a Home Heating Assistance Program to low-income PEI households. Eligible applicants may receive financial assistance of up to $1,200 toward their heating costs. This program only pays for heating arranged by the Salvation Army.
Where Can You Find Consumer Protection Offices In PEI?
Businesses operating in PEI must follow the law when it comes to how they deal with customers. The Consumer Protection Act in PEI governs business practices to ensure that consumers are treated fairly when dealing with businesses in the province.
If you believe that you’re the subject of unfair practices, you can speak with a representative of the Department of Justice and Public Safety by contacting them in one of the following ways:
- By telephone: 1-902-368-4550
- By email: DeptJPS@gov.pe.ca
- In person: 4th Floor South, Shaw Building, 95 Rochford Street, Charlottetown, PEI, C1A 7N8
