Personal Loans Canada $10 000 over 120 months
There comes a situation in everyone's life when one has to face financial scarcity either due to a shortage of funds or no funds at all. At such crucial times, many of you started relying on credit cards to fund some necessary cash. However, credit card has a certain set of limitations that will not meet your large-scale fiscal issue.
So, at this point, what you can do is rely on personal loans to arrange much-needed cash either for a short term or a long term period. In this blog itself, we will be providing you with complete information regarding personal loans as to how do personal loans work? What is the interest rate charged on the same? What are the pros & cons of personal loans? How to apply for personal loans? And, related things like that. Without any further delay on the same, let's get started.
Before actually understanding the working progress of personal loans, first, consider what it is and what are the different types of personal loans available for you?
What is a Personal Loan?
As the name itself implies, a personal loan is both a long-term and short-term financial offer available online. Using the loan, you can source the funds for your personal usage. Be it like paying for the consolidated debts, settling the credit card bill, paying for home renovation, children's school fees, travel expenses, or anything like that. A personal loan can be used at your free will to meet a personal set of expenditures. But the main point to focus upon is the duration of the loan that actually decides how much amount you can get at the end.
What are the Different Types of Personal Loans?
For understanding the phenomenon of personal loans, it is essential to first know it's different types like the following:
* Secured Loan: It is a type of personal loan which is majorly offered for a long duration of time. Under this, you will be asked to deposit something as collateral or security against the total loan amount you borrow. Just like you can give collateral in the form of your fixed assets, home papers, jewellery, or something like that.
* Unsecured Loan: The name says it all which means the fact that you will not be asked by loan lenders to deposit anything as security. Usually, unsecured personal loans are offered for a short duration of time and even the loan amount is on the lower side.
* Online Loan: An online personal loan is easy to apply financial offer that you can do even from your smartphone at any point in time. Unlike the old-school process of traditional loans, you can apply online, submit the documents virtually, and get approval in the shortest possible time.
* Traditional Loan: As the name implies, a traditional personal loan is something that you apply for at the bank or at the credit union office itself. For this, you might have to make several rounds to the bank and get involved in the cumbersome approval process.
* Fixed Interest Loan: Some of the personal loans have the fixed interest rate charged by lenders. It means the fact that interest rate charges remain the same every single month which is included in the monthly EMI amount.
* Variable Interest Loan: The variable interest loan has the facility to lower the interest charges with the changing time. It means, your expenses for the loan keep on decreasing every single month.
How Does Personal Loan Work?
Now, we come to the main point of discussion and i.e., understanding the working process of personal loans in Canada. It is simple to understand the fact that personal loans can be applied online in which the lender will ask for your personal details, monthly income, and permanent resident status in Canada.
You will be offered a fixed loan amount either for a long term or a short term. There can be a secured or unsecured category of loans depending on your requirements. The one thing you need to very well understand is the interest rate charged from the lender's side that will differ as per lender to lender and according to your financial requirements.
Types of Interest on Personal Loans
As we have already said about the different rates of interest charged by personal loan lenders. Here, you will get a rough idea of how much does it charged depending on your credit capacity. The interest rate on personal loans online is best termed as APR (Annual Percentage Rate). This particular rate differs as per the borrower's credit ratings which are based on the following few points.
- If you have an excellent credit score of 720+ then you will be charged with the lowest possible APR that comes around 10% to 12%.
- If you have a good credit score of 690-719, then you will be charged with a decent rate of interest i.e., 12% to 15%.
- If you have a fair or should we say decent credit score of 630-689, then you will be charged with an APR of 20%.
- If you have the lowest possible credit ratings of 629 or below, then you will be charged with a higher rate of interest which is more than 30%.
How Much Amount Can you Borrow Under Personal Loans?
Another crucial element of personal loans in Canada is the range of amounts offered. Till now, you have got an idea of the secured and unsecured categories of loans, interest rates, and tenure. So, according to your profile, lenders will offer the loan amount between $15000 to $100000 depending on your repaying capacity, credit scores, and other major factors.
Pros & Cons of Personal Loans
- Most personal loans have fixed rates of interest and terms. It will be a deciding factor for borrowers to pay a fixed set of interest and know the overall tenure well in advance.
- It is the best way to get rid of all your consolidated debts in a single shot. Whatever small money is pending on you will be fixed accordingly.
- The loan not just helps you pay the pending dues, but further helps in building your credit to a stronghold position.
- Sometimes personal loan appears to be expensive for some people and they find it hard to settle in the end.
- It is not a good option if you have a very small debt.
- Personal loans are basically highly monthly payment loans, especially under the unsecured category in which interest rate is on a higher side.
Personal loans in Canada are a result-oriented financial offer that helps your overcome unexpected and sudden financial scarcity. It allows you to pay off the debts and build your credit in the shortest possible time. The best part of the loan is to apply online without facing any hassle.
Personal Loans Frequently Asked Questions
What if personal loan is not paid?
In case, you fail to repay the monthly installment of the personal loan, then it will be carried forward to the next month along with the late payment charges. Also, if you fail to completely repay the same, and then lenders will take strict legal action against you.
What to consider applying for a personal loan?
At first, you have to consider your current financial position in the picture while applying for the loan. You need to showcase your monthly income capacity, permanent Canada resident status, and send all the personal details to get the swift approval of the loan.
How much does it take to get approval of personal loan?
Usually, it takes 3-5 days of time to get the final approval of a loan from the online lenders. All you have to do is apply online from the very comfort of your home and get approval in the shortest possible time.