It’s common for people to look for additional funds to cover repairs, medical bills, big purchases, etc., and most look towards banking institutions for help. The problem is that you can’t always rely on banks for personal loans. That is especially true when your credit rating is not up to the mark or you want money as quickly as possible. To handle your situation, you can switch to another type of personal loan, called an installment loan.
Installment loans are quite similar to traditional personal loans, but they come with a fixed interest rate only. The interest rate is also quite high because the lenders need money to cover the risk they take by forwarding loans to people with a not-so-impressive credit history. The good thing is that you don’t need to repay the whole amount in one go but you can divide it into equal payments and pay bi-weekly or weekly. The most interesting thing is that installment loans often help you borrow up to $10,000, which you usually need to repay anywhere between six months and five years.
Know the Interesting Benefits
There are multiple reasons why people in Canada opt for an installment loan. Yes, the interest rate is on the higher side but it still doesn’t stop installment loans from becoming one of the most popular short-term loans for Canadians. The interest rate might be higher than traditional personal loans, but it looks much better when compared to a similar substitute, such as the payday loan. Here are some benefits you get when you choose to obtain an installment loan:
- As compared to many other options, installment loans are much more efficient and faster to obtain. You don’t need to attend meetings with a loan officer or a banking institution’s representative to get your loan approved. Online installment loans in Canada work quickly, with the approval process not taking more than an hour. It also means that in most cases, you end up receiving your funds within 24 hours of getting your application approved. To get a good deal, you can seriously think of applying for installment loans in Canada with Friendly Lender, as they help you choose from a number of deals.
- Installment loans also serve as a blessing to people with poor credit. If you’re one of many Canadians with little to no control over your finances, chances are you already have a bad credit score, with no banking institution willing to take you in as a customer. Thankfully, you can still get some money using installment loans. Nevertheless, you will still have to show some proof of income and demonstrate your ability to repay the loan within the set timeframe.
- If your financial circumstances are getting complicated because of your bad credit, you should consider taking steps to improve it over time. The problem is that the best way to improve your credit rating is to take a loan and repay it in a timely manner to prove you’re a responsible citizen. Unfortunately, finding a loan with bad credit can be tricky, but you can use installment loans in Canada to build your credit. You will have to deal with a higher interest rate but making payments on time will help you in the long run.
- Installment loans are popular because they come with flexible repayment plans. It is a big benefit considering the fact that a payday loan is due on your next payday but you can structure your installment loan much like a personal loan. Depending on the lender you choose, you may be able to choose a loan term as well as the repayment frequency. To get a good deal, you can seriously think of applying for installment loans in Canada with Friendly Lender, as they help you choose from a number of deals.
Few Important Considerations
When dealing with a tough financial situation, it is natural to be focused entirely on arranging money and not worrying too much about creating a perfect repayment plan. However, you should avoid making a hasty decision and remember a few things when applying for installment loans in Canada. For instance:
- Never overlook the interest rate. Often the speed of getting cash to deal with your emergency needs makes you turn a blind eye to the most important aspect of installment loans, i.e., the interest rate. These loans come at a high-interest rate, but that may vary from lender to lender. You can find a lender offering better rates, but don’t expect the interest rate to be very low considering they’re available for people with bad credit and require no real documentation.
- Understand the fact that you may have to deal with higher repayments depending on the total amount you borrow. As compared to payday loans, the cost of repaying installment loans from a principal perspective is relatively high.
- Never forget to ask about any additional fees that you may have to pay while taking a loan. Some lenders may surprise you with additional origination, administration, or affiliated fees. It could push the total cost up, so be sure to get more information about it in the beginning.
- Think twice before making a decision when you come across a lender promoting guaranteed approval. Sometimes, it’s just a trap because reputable lenders will do some background check to at least ensure that you have the ability to repay.
- Know how much money you really need and avoid working with a lender who pushes you unnecessarily to borrow more.
- Rethink your decision to take out an installment loan from a lender who lures you into buying insurance plans. They make it look as if they’re doing it for you but they’re actually safeguarding their own interest.
The truth is that installment loans in Canada are nothing less than a huge blessing for people who can’t use the traditional options because of their bad credit rating. You can surely use it but take your time to decide how much money to borrow and then work on a repayment plan to make this financial option work in your favor.