When life just isn’t going your way and your finances can’t quite seem to catch up, Loans Canada offers a wide variety of loans and lending products that can help you and your family get back on track. Whether you were caught off guard by an emergency or you’re simply looking to get ahead of this month’s bills, we can match you with a lender and a product that best suits your unique financial needs.
One credit product we can offer you is a short term loan, which can work in plenty of small-scale financial situations. Keep reading if you’re interested in learning more.
A short term loan is a specific amount of money that you can borrow, either online or in-person, from almost any lender in Canada. After your application is approved, that money would be deposited directly into your bank account as a lump sum.
You will then follow a plan that allows you to repay the loan through equally divided installments. Since short term loans typically involve less money than other installment-based loans, the average repayment term only lasts 1 – 2 years and approval will be much easier, as well as faster to obtain.
All this can make a short term loan the perfect solution for small-scale expenses and financial emergencies.
When filling out a loan application, make sure you avoid these common mistakes.
Although the conditions of your short term loan will vary depending on where you apply and how qualified you are, there are normally two types that you can apply for:
The majority of short term loans that you’ll find are installment-based, meaning the full loan sum will be separated into installments that you would pay off periodically until your plan is complete.
While every borrower has different preferences when it comes to their budgetary restrictions, installment-style short term loans are appealing because:
Many lenders can offer a variety of installment frequencies, such as:
In many provinces, you can also find a short term product known as a payday loan. Like a traditional short term loan, this involves a relatively small sum of cash that you can apply for at a physical location or online, that’s deposited directly into your bank account faster than some larger loans.
However, payday lenders will usually only offer loans of $100 – $1,500, with much shorter repayment terms of 14-days. The only documents required for approval are government identification that proves you’re at least the age of majority in your province, as well as proof of your permanent residency, steady income, an active bank account.
When it comes to payday loans, it’s important that you know your rights.
Payday loans are also appealing because:
All this said payday loans are not always the best or safest loan option because:
Every borrower’s financial situation is different, so the short term loan that you choose should be based mainly on what you can afford in terms of your repayment plan.
For instance, a traditional short term installment loan is a safer, more practical option when you have strong finances, good credit, and the ability to afford all costs associated with it. It may also be a more effective tool if you’re dealing with larger expenses or those that need to be financed gradually.
A payday loan, on the other hand, maybe a more straightforward solution when you have unhealthy finances or an expense that needs immediate coverage. Then again, payday loans are far riskier in many respects, so they are only the right solution when you’ve exhausted all the more conventional options.
The good thing about short term loans is that most consumers can get approved. Because our network of specialty lenders is so extensive, all our clients will receive a unique and tailored borrowing experience. The number one most important requirement for borrowing money is to be able to pay it back. We want all our clients, new and returning, to gain access to the financing they need, in the most responsible and manageable way possible. Aside from that, here are a few things everyone needs to get approved.
It’s impossible to predict the future but at least you know you have options when the future arrives and it’s a little more complicated than you thought it would be. Short term loans can cover the cost of any bill, expense, or emergency you need, including but not limited to…
If you do have bad credit or unhealthy finances in general, don’t worry, because you can still get approved for a short term loan. There are even some lenders in Canada that specialize in bad credit clients and won’t perform a credit check when you apply.
Nonetheless, bad credit can certainly make applying more difficult, as lenders consider it a sign that you would have a greater chance of defaulting on your installments. Not to mention, the lender will be more likely to give you a higher rate for a smaller loan, as well as a less adjustable repayment plan.
So, you may need to provide additional information and security when you apply for a bad credit short term loan, such as:
Essentially, these reduce the risk that your lender would take on by approving your loan, so you’ll have better odds of obtaining more money or a better rate.
To learn how to protect yourself from a loan scam, check out this article.
If you’re about to apply for a short term loan, especially one that’s catered toward bad credit, it’s important to research your lender properly to confirm that they are a legitimate business.
Unfortunately, that’s because there are many predatory organizations and scam artists out there that are relying on your need for a loan. One way they will attempt to fool you is by claiming that you have to pay “loan insurance” before they can approve you.
In reality, no legitimate lender will ever ask for payment before your loan is deposited, because it is illegal to do so in Canada. If a supposed lender ever attempts this scam or seems untrustworthy for some other reason, be sure to avoid them.
The decision to apply for a short term loan can be a difficult one to make, as there are many different factors to consider. To help you decide, take a look at the following list of pros and cons:
When you apply for any credit product, a record of the event will show up on your credit report, leading to a hard inquiry on your credit history, causing your credit score to drop by a few points. That’s why it’s not a great idea to apply for too many loans within a short time frame.
As mentioned previously, completing your installments will also impact your credit score, only in a positive manner. However, defaulting with a late, incomplete, or missed payment would have the opposite effect, causing your score to drop every time.
The health of your credit is extremely important when applying for future credit products, as lenders will often use it to judge how much they’ll allow you to borrow, as well as what interest rate you would qualify for. The better your credit score is, the more creditworthy lenders will consider you, so your loan will be larger and more affordable.
If you’re looking to solve your financial issues with the help of a short term loan, don’t hesitate to contact Loans Canada. We can set you up with the best lenders and rates in your area. Simply call us today or check out our website for further information.
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