Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Good credit will open many doors when it comes to loans and credit products. But if you haven’t yet established credit or your credit scores are currently on the low side, you may want to take steps to give it a boost. And a cash secured loan may be a great way to do that.
While you won’t get access to the loaned funds right out of the gate, you’ll have the chance to improve your scores with each timely payment made. Plus, you’ll be contributing to a savings account that you can tap into at a later date.
A cash secured loan is a unique credit product designed to help you build or improve your credit. Rather than providing you with a lump sum of money upfront, as is the case with most traditional loans, your lender will withdraw your loan payments from your bank account and deposit the funds into a secured account.
Once the loan is paid off, you can access the funds that your lender deposited into your secured account. You can then use that cash as you see fit, including investing, paying down debt, or covering major expenses. This is a great way to save money and build credit.
As mentioned, your lender will withdraw your payment from your bank account each month and add it to a secured account until your loan amount is fully repaid. The withdrawals will take place according to a set schedule, like other loans.
Every loan payment made will be reported to the credit bureau(s), which is what will help you build a positive payment history. This, in turn, can help build your credit scores.
There are several perks to a cash secured loan, including the following:
While there are plenty of advantages that come with a cash secured loan, there are also a few drawbacks you should be aware of before applying:
Like other loan types, cash secured loans come with interest. However, you may find that loan rates on cash secured loans are higher than other loans.
In fact, you can expect to pay as much as 20% APR or higher. Depending on the loan amount and the loan term, you could be paying hundreds of dollars in interest over the life of your loan, which you won’t have access to until the loan is fully repaid.
There may be other fees involved with a cash secured loan, including administrative fees. You’ll have to verify what fees your lender charges for cash secured loans to find out exactly how much your loan will cost you.
To calculate how much you’ll pay for a cash secured loan, let’s say you take out a $1,000 loan with an interest rate of 15% and an administrative fee of $150. Payments are made monthly over 1 years.
Loan Amount | $1,000 |
Interest | 15% |
Fees | $150 |
Monthly Payments | $90.26 |
Total Cost | $1283.12 |
Total Interest + Fees | $233.12 |
A cash secured loan may be a great way to build your credit, but before you settle on a cash secured loan consider other alternatives, including the following:
The number one way to give your credit scores a boost is to make sure all your bills are paid on time and in full every billing cycle. Even if you can only make the minimum payment, paying on or before the billing due date is crucial. As mentioned above, your payment history is one of the most important factors in determining your credit scores. As such, paying your bills on time and in full is crucial.
Another great way to improve your credit scores is to pay down your existing debt. The lower your debt obligations, the more money you’ll have available to put towards your savings. Plus, a lower debt load could make it easier for you to get approved for other loans in the future.
Don’t close any credit card accounts, even if you haven’t used them in a while. Old accounts — especially those in good standing — can be good for your credit scores. Old accounts can affect the age of your credit history which can affect the calculation of your credit scores. Generally, the older the age of your credit accounts, the more positively it can affect your credit scores.
A secured credit card is relatively easy to get approved for. In fact, approval is almost guaranteed so long as you can provide the minimum security deposit. These financial products act like conventional credit cards, except you’re not spending on credit. Instead, your security deposit serves as your credit limit and is held by the creditor while your account is open. Every time you make a timely payment, your creditor will report your payments which can help you build your credit scores.
To manage your finances, work with credit counsellors and learn how to budget effectively. These financial experts will help you come up with ways to whittle down your debt and work on building your credit scores so you’ll have more financing options available to you in the future.
Make a habit of checking your credit report at least once per year. Pulling this report will give you the chance to find out what your credit profile looks like and if there are any errors that could be dragging your scores down unfairly. If you notice any mistakes, have them reported and fixed right away.
Cost | Credit Score | Credit Report | ||
![]() | Free | Yes | Yes | Visit Site |
![]() | Free | Yes | No | Visit Site |
![]() | Free | Yes | Yes | Visit Site |
![]() | Free | Yes | Yes | - |
If you’re someone who struggles with self-discipline while building a savings account and good credit – then a cash secured loan may be perfect for you. Though the cash won’t be immediately available, you’ll eventually have a nice financial nest to tap into, while establishing and building solid credit.
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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