In Canada, there is a wide variety of personal loans available and the best one for you will all depend on your own circumstances. Some loans you may not qualify for if your credit history is bad or if you haven’t had the chance to develop a credit file yet. The loan types available in and across Canada include the following:
- Payday loans
- Secured personal loans
- Unsecured personal loans
- Guarantor loans
- Consolidation loans
Read more about these different loan types to determine which one would be best for you.
A payday loan is a short-term loan that is often taken out when a person has an emergency to deal with. Sometimes things come up and for one reason or another you may not be able to make your rent payment or you may find yourself in a situation where your phone is going to be disabled if you don’t come up with a payment soon. In most cases the money will be available to you within a 24-hour period to help you get back on your feet quickly.
You will need to pay back the money when you receive your next paycheck, however, so you’ll need to budget wisely. There is a higher interest rate associated with payday loans but if you’re dealing with a critical issue, you won’t worry so much about paying a higher rate of interest. You may be focusing on the financial crisis at hand and just need some help to get you by for the next couple of weeks.
If you are interested in payday loans Toronto and don’t have a good credit history, you don’t have to worry. The payday loans company will not look into your credit file to determine whether you will be accepted for a loan. The major requirement that needs to be fulfilled is you must be able to show that you have regular income coming in and will be able to pay back the loan in a relatively short amount of time.
Secured Personal Loans
This is another type of loan that does not require a great credit score in order to qualify for it. With this type of loan you’ll have to provide the loaning institution with an asset that acts as collateral to back the loan. This gives lenders the feeling of extra security when they are loaning out the money and in many cases you may find that the interest rates are lower than usual with secured personal loans.
These are longer-term loans than payday loans and you’ll be required to pay back the money in monthly instalments. There is a risk, however, with taking out a loan that is secured. If you put your vehicle, home or another big asset up as collateral, it can be collected by the lender if you fail to make your payments. It’s best to really take a look at all of your options before putting something extremely valuable on the line for a loan.
Unsecured Personal Loans
An unsecured personal loan is often harder to obtain. The financial institution will want to take a look at your credit score to make sure that everything is in order. They will also want to see that you have regular income coming in and the person that is dealing with your application will also want to determine that you don’t already have too much debt.
Since the loan is unsecured you can usually expect to pay a higher amount of interest than you would for a secured loan but less than you would have to pay with payday loans. There are many different banks, credit unions and other lending companies that offer unsecured loans either in person or on the Internet. If you are applying for a loan online, however, make sure that you have looked into the company that you are working with before disclosing any of your personal data. There are scanning websites set up that say they are offering low interest loans to just about anybody and they are really just trying to get a hold of your personal information.
If you don’t qualify for a personal loan and have a poor credit rating and don’t have anything of value that you can offer up as collateral, you may want to consider getting a guarantor loan. In this situation, somebody will cosign for the loan for you. The cosigner must have a good credit score and be able to prove that he will be able to make the payments for you should you default on the loan.
This is also a risky situation since many friendships and families have been broken apart by this type of loan. It should only be considered as a last resort. Should an emergency occur and you can’t make your payments for any reason, the person that cosigned for the loan will have to pay it off in its entirety.
These loans can be used if you’ve gone into heavy debt with credit cards or other high interest loans and need a way to pay them back without having to pay premium rates of interest. Once again, it can be difficult to qualify for this loan type since you have already proven that you have already had a hard time managing debt.
An Alternate Solution – Cash for Gold
If any of the above loan types don’t work for you, you may also want to consider a cash for gold alternative. This is not a type of loan but if you have any gold in your home you can cash it in and get money in your pocket on the same day. This is very similar to payday loans but with cash for gold you don’t need to have a provable income. All you need to do is walk in with your gold and then walk out with the money you have received as a payment.
With so many loan types available, it’s important to find out everything you can before applying for one. Learn more about payday loans and cash for gold now by visiting our website at moneydirectstore.ca.