Which Province is The Easiest to Borrow in?
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Are you on the lookout for a lender to help you finance a major project, such as a home renovation? Or perhaps you simply need a little bit of extra cash to pay for your expenses until your next paycheque arrives? When you’re low on money but have payment obligations to contend with, a loan is often necessary.
It’s in your best interest to secure the cheapest loan possible. However, sometimes this isn’t possible, and you may have to rely on non-traditional lending sources.
Why is it Easier For Certain Consumers to Borrow Money?
Some people have no issues getting approved for credit, while others struggle constantly. The former category includes those who possess a high credit score and solid income stream, which lenders view favourably. If this describes you, you’ll have plenty of options when it comes to borrowing. However, if you lack these attributes, obtaining a loan can be a challenge.
Which Provinces Have The Best Lending Laws
Lending laws are federally regulated, so it doesn’t matter where you obtain your loan. But, certain types of loans are regulated at the provincial level, such as payday loans.
Some of the areas payday loans regulations cover include:
- Interest rate: Lenders are limited to what rates they can charge you.
- Cooling-off period: This refers to the period during which you can cancel your loan without incurring a fee.
- Non-sufficient funds: These are fees lenders charge you when you don’t have enough money in your account to cover a transaction.
- Rollover: Rolling over a payday loan means you can extend what you owe into a second payday loan.
Below is an overview of payday loan regulations by province.
|Maximum Interest Rate for a $100 Loan||Cooling-off Period||Maximum Penalty for Non-sufficient Funds||Rollovers Allowed?|
|Alberta||15||2 business days||$25||No|
|British Columbia||15||2 business days||$20||No|
|Manitoba||17||48 hours, excluding Sundays and holidays||$20||Yes|
|New Brunswick||15||48 hours, excluding Sundays and holidays||$20||No|
|Newfoundland and Labrador||21||2 business days||$20||Yes|
|Nova Scotia||19||Next business day (2 days for online payday loans)||$40||No|
|Ontario||15||2 business days||N/A||No|
|Prince Edward Island||25||2 business days||N/A||Yes|
|Saskatchewan||17||Next business day||$25||No|
As you can see, the provinces with the best payday loan laws are British Columbia and New Brunswick, followed by Alberta and Ontario. These provinces offer the most consumer protection at the lowest cost.
Check out the difference between a payday loan and a personal loan.
What to Consider When Choosing The Right Loan
Here are some factors you should consider when evaluating your loan options:
- The loan’s total cost: This is the amount you will spend to pay off the loan in full. It includes the principal, interest, and fees.
- Interest and fees: Ensure you can manage the interest rate and any associated fees.
- Loan term: Long-term loans result in lower payments, while short-term loans come with high payments.
- Affordability: Can you pay back your loan without sacrificing other living expenses?
- Lender reputation: Conduct research to ensure your lender is trustworthy and transparent.
Where is The Easiest Place to Get a Loan?
Seeking out an alternative lender is a viable option for quick financing. Alternative lenders specialize in lending to borrowers with bad credit. If your finances are in less than stellar shape, you’ll likely only qualify for a loan through an alternative lender. Some of the factors they consider when reviewing your applications include your:
- Job stability
- Debt-to-income ratio
- Personal assets
What to do if You Can’t Get Approved For a Loan in Your Province
Lenders must obey the same laws regardless of where they operate, so you can safely work with a lender in another province. However, you may still face the same hurdles when attempting to secure a loan, which is why working on improving your finances is a superior option. You can start the process by:
- Improving your credit
- Increasing your income
- Lowering your debt
- Adding assets that you can use as collateral
Once you get your finances in good order, more choices will become available to you.
Having too many options can sometimes be overwhelming, but the more, the better when it comes to borrowing money. Having access to affordable loans can save you a sizable amount in interest and fees, which is why keeping your finances in good standing is so crucial. Doing so will help you avoid those costly payday loans.
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