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Installment Loans Canada
Installments loans are the most common loans Canadians look for when searching for loans in Canada. They search for the term ‘Installment loans Canada because that is basically what they are looking for: Installment loans in Canada.
Installment loans can be described as loans that are structured over a period of time to be paid at planned or arranged dates (normally end of the month) and in planned amounts.
These kinds of loans can span from a couple of months to as long as thirty years. The long tenure installment loans are typically mortgage loans which have a loan installment plan.
The main reason why installment loans in Canada are the preferred choice for borrowers in Canada is that they are thought to be affordable and safe as compared to other kinds of loans such as Payday loans.
The term installment loans embrace or include all kinds of loans because it is mainly the payment process that gives the loan the name installment loans. So all types of loans that are paid in bits within a period of time are all known as installment loans.
Installment loans Canada is one of the best loans you can get in Canada when you are hit with unexpected expenses or emergencies.
Fundamentals of installment loans in Canada
Basically, installment loans in Canada, have a couple of months for a borrower to complete paying off the loan. The payment is structured in a way that the borrower will pay an amount of money every month as per his or her salary as well as the conditions of the installment loan given.
This amount stays the same throughout the life of the loan. This makes it easy for the borrower to make arrangements or preparations for the payments every month.
Sometimes the base rate goes up and that may affect the interest rates of lenders generally. What most lenders do is to rather add more time to the payment length instead of increasing the repayment amount.
If a borrower is more comfortable with the repayment amount being increased instead of the tenure being prolonged, the lender and borrower can discuss this option too.
Collateralized and non-collateralized installment loans
Collaterals such as a house or a car can be used to get installment loans in Canada. This technique of acquiring a loan is known as a secured loan or a collateralized loan.
When there is no collateral used to get a loan it is known as non-collateralized or an unsecured loan. A borrower who is getting a mortgage loan gets the money to purchase the house (that is if he or she meets all the requirements) but the house purchased is still in the name of the bank until the whole payment has been made.
The same situation applies to a car loan, the car used as the collateral is in the name of the financial institution until you are able to pay back the loan and then the car becomes your property again.
What you need to know is that if a loan is collateralized or secured the interest rate charged on it is fairly low. But on the other hand, when the loan is unsecured or not collateralized the interest rate is much higher. The main reason for this is to allow or help the lender take care of the risk involved in lending without any collateral.
Procedure for getting installment loans in Canada
The process or procedure for applying for installment loans in Canada is quite easy and straightforward. You need to fill an application form online on the lender you have chosen’s website, which is much simpler and faster than going all the way to the lenders’ office.
A visit to the lenders’ office will mean you will have to go along with all the documents requested for. And with this, you have to go through some sort of interview with an agent.
Filling the form online however helps you to cut out a lot of processes that a physical visit can’t do without. Depending on the kind of loan you apply for, you will be required to fill the forms that will ask all the basic questions and also the lender will provide all the necessary information regarding the loan.
This information includes the payment schedules, how much you are entitled to get with regards to your income, interest rate, the tenure of the loan, creditworthiness, repayment amount and rules governing loans in Canada.
A typical example is when you want to get let’s say $20,000 to get a car of your choice. The lender must inform you of how much you will pay monthly, how long a loan worth that amount will take.
Continuation for the process of acquiring installment loans in Canada
Some lenders will let you know, giving a down payment of the loan will attract a lower interest rate, otherwise, you can take the loan for a long period so you pay smaller repayments every month. The choice really is yours and what works best for you.
Another thing to note is that if your credit score is good, you can bargain for a much lower interest rate. You can pay off the loan if you are able to get the money early before the end of the loan.
Some lenders do not charge you anything for paying off the loan earlier than agreed. However, this is not the same everywhere. Before you sign off the application of a loan, make sure you know if there are any charges if you want to pay off your loan earlier than agreed. If there is, calculate all of that to know how much you will pay eventually.
If it is on the high side, it will be advisable to look for another lender who does not charge any penalties for paying off loans earlier.
Effects of installment loans in Canada on your credit scores
You cannot avoid having a good credit score if you need a healthy financial life. If you do not know how or ignore the necessary steps to take to a healthy financial life, you have difficulty getting credit or may pay a high price for it.
Taking installment loans helps with creating a good credit report: that is if you make sure to pay back the loan at the right time or the right amount just as in the agreement that you signed.
What lenders are mandated to do (not all do so) is send the credit history of their borrowers to the credit bureaus in Canada. In Canada, the two main credit bureaus are Equifax and TransUnion.
With the information given to lenders by the credit bureaus in the form of credit reports, lenders are able to understand exactly how your credit history is.
And then they will be able to take a decision on whether to give you the credit you requested for or not.
Effects of installment loans Canada on your credit scores continued
Taking installment loans Canada is good because the loan is spread over a period of time so every payment made on time is a plus on your credit score. The same way not paying back the loan on time or not paying at all will have a negative effect on your credit score which will affect you when you need a loan.
If the loan taken is huge and last for a long time, it will take a while to finish servicing the loan so it will impact positively on your credit score. That is if all effort is made to pay the loan on time all the time and your lender sending that information to the credit bureau.
A quick tip for you is to make monthly pre-authorized payment orders to your lender that will give them the power to take the monthly repayments from your account every month.
The lender who has this authorization should be able to get the money without difficulty and it can happen when you have enough money in your account. Getting installment loans Canada is easy but you have to be creditworthy or you have to have a good credit history.
In case your credit history is not good, you can still get installment loans in Canada with proof of your income but also at a higher interest rate.
Why should I go for installment loans?
There are several loans on the financial market so why should you choose installment loans and not the other types of loans?
Below are seven reasons why you will like to choose installment loans over any other loan.
1. Installment loans Canada are loans in Canada that can be paid back over a period of time. The period can range between a couple of months to as long as thirty years. This tenure for a loan, however, depends on what type of loan you choose.
If you need a loan but want to pay gradually for a time because you cannot afford to pay back the loan at once, the installment loans are your choice. With installment loans, you can borrow more, unlike payday loans.
2. You can apply for installment loans in Canada online and make the repayments online too. Makes it very easy to service installment loans.
3. Opting for installment loans in Canada simply means you care about your confidentiality, security as well as your safety. These traits are what installment loans stand for.
4. You pay your installment loans in ‘installments’ or in bits, this gives you the chance to build your credit score gradually with the on-time payments.
5. Your income and the interest rate which the lender is giving you the loan determines how much you will pay as repayment. So with these factors, you are not paying an amount that will cut deep into your budget, but amounts that are just right for you.
6. Most installment loans can be given within twenty-four hours or within three working days. Easy to rely on.
7. The amounts given for installment loans are far higher than payday loans.
Category of people who benefit from installment loans in Canada
Considering the fact that installment loans Canada is very common among the Canadian populace, there are a lot of people who qualify for installment loans.
The loans vary from mortgage loans, car loan etc. This cuts across a wide range of needs of Canadians.
A couple of people who benefit from installment loans in Canada will be discussed below.
• Those who have knowledge of loans
To say someone is financially savvy means the person really understands the financial market and uses it to his or her advantage. The people who fall in this group have money but are very clever in its usage so they don’t run out of it.
People with very good credit history can benefit from installment loans because of the low-interest-rate they get.
The best deal will be to take an installment loan with the lower interest whiles you use the interest on your money to pay off the loan gradually. That is definitely a smart move, isn’t it?
• People who are now starting life
Young people who are now starting life most of the time need money to take care of some financial problems. Since they are now starting life, they will need to build their credit so that they can have access to credit in the future.
As a young person, you will need some things that you might not have been able to save up for. An example is if you need money to buy a car to be able to get to work on time not forgetting the convenience a car comes with.
You can take an installment loan to buy a car and pay gradually so you build your credit score as well as get the car you need. Because you are starting up, you do not need a luxurious car but a decent one that will take you around.
• People who are retired
In Canada, most of the old or retired folks are on a monthly remittance from the government and do qualify for installment loans. They may not qualify for very huge amounts that will last for a very long time though.
They qualify for installment loans that are enough for them to get some basic items that can help them live comfortably. Life with installment loans for old people living in Canada is the way to go.
Installment loans features
Installment loans features that run through all installment loans regardless of the lender you borrow from.
Loans that are termed as installment loans are very flexible as you can choose the repayment schedule that best suits you or you are more comfortable with.
The payments plans can be monthly, quarterly, semi-annually or annually. It all depends on you, however, your credit scores and income plays an important role in this decision.
• No fees paid if the loan is paid back before the due date
Installment loans give you the freedom to pay back the loan before the due date you both (borrower and lender) agreed on. Paying back earlier attracts no fees and this is something you must look out for. If a lender has such fees in the agreement for an installment loan, you should move on to the next lender.
• Easy application process
Getting installment loans Canada is easy and hassle-free. You don’t need a lot of documentation to apply for installment loans. You can apply anywhere at any time, all you need is a computer or phone with an internet connection.
If you produce everything requested for by the lender and the information provided is accurate, your loan can be approved within the same day or even some few hours after applying.
• Higher amounts can be borrowed
Amounts borrowed are much higher giving you the chance to use the amount to purchase a high priced necessity. The amount, however, differs from lender to lender as well as other factors such as your income and the interest rate the loan is being given to you at.
Drawbacks for installments loans Canada
You take an installment loan in bulk and payback in bits till you pay back all the loan borrowed. The way installment loans are to be paid back and the specifications attached to it can sometimes be disadvantageous to the borrower.
• Conditions of loans cannot be changed after an agreement signed
Before installment loans are given by a lender in Canada, the conditions, as well as terms, are agreed on by both parties before the loan you sign on the agreement forms.
These terms and conditions are to be adhered to until the end of the loan. In the event where you have issues that do not favor the terms and conditions of the loan anymore, it cannot be changed and you will have to pay back just as agreed on.
Not fulfilling the terms will mean your credit history will be reported to the credit bureau which will affect your credit score. If you have a secured installment loan, defaulting means your property will be seized by the lender. Or the lender can be considerate by giving you the chance to pay back all the remaining amount in one installment.
• Installment loans have fixed rates
Typically installments loans Canada have fixed rates and when the base rate is reduced you will not be able to enjoy the reduction. Unfortunately, fixed interest rates are on the high side and paying a fixed interest rate the whole lifespan of a loan means your loan will be expensive.
A loan which has a variable interest rate will benefit you if there is a reduction of the base rate (the level below which you are not allowed to lend to someone). Also, the same way the interest rate will be reduced when there is an increment in the base rate, it will affect a variable interest rate loan.
Meaning you will be paying more as base rate always affects loans that have a variable interest rate.
Facing rejection because of your bad credit history can be a very devastating experience when you need the money urgently for an emergency situation. Lenders stay away from borrowers with bad credit because they want to protect themselves from any risk that is associated with doing business with bad credit borrowers.
You can get credit from different lenders, especially alternative lenders in Canada who give installment loans to borrowers with bad credit. Previously this would have been impossible because traditional lenders do not give credit to bad credit history borrowers and if they will consider giving a loan to them they must have collateral to put in place of the loan.
If you are a borrower with good credit history, installment loans Canada is just right for you. You do not have to pay the loan in bulk which will be very inconvenient and stressful. But paying in bits will give you the flexibility to pay in small quantities and agreed dates which will suit you and the lender.
Knowing how much you will be paying at the end of the month, gives you the opportunity to plan towards that. When you need installment loans Canada, you can visit the office of the lender but due to convenience and easy access, it will be better to apply online where you don’t have to leave the comfort of your house.
With the relaxed nature of repayment schedules for installment loans, it is easy to service installment loans as compared to other types of loans. As a first time borrower in Canada, installment loans are the best kind of loans to use to build your credit history because of the nature of the payment. There are (installment loans) common with all types of lenders be it the traditional or alternative lenders.
Disclaimer: All loans offered through this website are subject to credit and underwriting approval. AfterLoans.ca is a lead referral company, not a lender. AfterLoans only works with financial service providers that adhere to Canadian laws and regulations. Our lenders lend from $500-$5,000. Loans amortization is between 6-36 months. APRs range from 19.99% to 55%. The actual APR charged will depend on the lender’s assessment of your credit profile. For example, on a $1000 loan borrowed for 12 months at 29.9%, the monthly payment will be $97.24; with a total repayment, including interest, of $1166.88 There is also lender’s optional loan protection policy. In the event of a missed payment an insufficient funds fee of around 45$ may be charged (dependent on the lender). If you default on your loan payment plan the lender may terminate the plan and the remaining balance will become payable immediately. Our lenders employ fair debt collection practices, but will pursue the payment of Outstanding debts to the full extent that Canadian law allows.