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SMALL LOANS CANADA
The Existence of small loans
In Canada, small loans are becoming a major market for lenders. With Ontario, Alberta, British Columbia being the top locations if you want loans in Canada, you don’t have to look far to get a small loan. Even if you are not in any of these locations, there are still lenders available elsewhere who can give you loans. The term ‘small loans Canada’ is becoming a search word that many lenders look for when they go online.
Small loans Canada are loans that are not given in huge amounts. They are usually small amounts that individuals need to cater for emergency expenses.
People run into emergencies all the time but do not have the cash to cover it and need small loans.
These emergencies include funeral expenses, car repairs, home improvements, medical treatment, paying urgent bills. With small loans, in some cases, there is no paperwork involved when applying. Everything is done online and if you are able to provide all the necessary documents and all the checks are done, you can get your funds the same day.
Small loans Canada are ideal for solving emergency cash problems because it’s usually a little amount that is involved and the repayment is within a short while.
When used the right way, small loans can be the effective helpline that people use to cater for their expenses. The duration for repayment is between 1 to 6 months. Some lenders may offer flexibility in choosing the loan term that best suits your needs. Its advisable not to take more than you will be able to repay or can afford.
Small loans explained
With the current cost of living on the rise for most Canadians, having different credit options has become essential. Going in for a small loan to take care of an expense is now commonplace.
Imagine if you have been waiting for an item to go on sale for a long time and as you’re flipping through the magazine you discover that the last day of the sale is a day before your payday. With no cash at hand to make this purchase how else would you be able to get what you want if you do not go in for a small loan? Small loans are that important.
As already mentioned a small loan is a financial intervention for households and individuals who run into emergencies as they go about their day to day activities.
Small loans can be used to fund vehicle expenses and urgent bills. It can also be used in solving cash flow problems. Unlike other types of loans which involve huge amounts, small loans do not.
The terms of small loans and interest rates may vary from one service provider to the other. It’s important to read all terms and agreement before accepting.
When going in for small loans, you should decide how much you want to borrow and when you are likely to pay back. Your choice of a small loan should be according to your finances.
Small loans have a shorter term of repayment. A shorter term of repayment means you have to pay back the loan with the interest quickly. Paying early saves you a lot of interest as compared to if you were to pay back the small loan in a longer term.
Getting small loans with bad credit
Even those with bad credit are not left out of small loans. The truth is, bad credit can make financial life quite difficult and complicated. Getting a loan can become a bit challenging and lenders do not normally consider those with bad credit. All the same, you can get small loans Canada if you consider some of the following.
Use lending networks
Using lending networks can give small loans to those in need of them. When you use a lending network, it enables you to receive offers from several lenders at once.
Once you fill out your information and put it out there you can get your loan granted to you. It also allows you to compare and know the best rates you can get easily and faster.
This makes is better as compared to going to each lending institution individually and asking for their rates and other information before comparing. The qualifications are not too stringent because it allows even those with bad credit to get access to loans.
You need to have a steady income
Though you have bad credit, you need to have a steady income. Some lenders may request work history over a certain duration before the loan is granted but this will vary from lender to lender.
Others require that you have a checking account. All this information is to enable the lender to have a better knowledge of who you are before the small loans are granted.
Applying for a small loan
It is not cumbersome to apply for a small loan now. In Canada, there are different lenders willing to give small loans to those who need them.
You can get small loans Canada by applying directly to a loan provider online. Others may let you apply by telephone or by walking into their offices.
In other cases too there exists the application of small loans through credit brokers. These credit brokers will take your loan application or request and make it visible on their site to the small loan providers. You are then matched with the service provider that is likely to give you the loan.
When applying for small loans some of the details required can include your address, earnings, employers address etc.
The advantage of using the credit broker is that it allows you to send in just one application which is made available to a lot of lenders. You don’t have to fill in an application for each lender. The more the lenders can see your application, the likely chance you are to get your loan.
This could increase your chances of being approved for a loan. Some brokers may charge an application fee for their services but in the end, you will get the loan you need.
What happens after you submit your application?
After you put in an application for small loans, lenders will carry out credit checks to know if you can afford the loan you have applied for. If you used a credit broker, the information provided will be made available to them on your behalf.
Depending on what the lender decides on, you may get more or less amount than what you applied for. Sometimes further documents may be requested for verification purposes before the loan is granted.
When the loan application is accepted, you are then sent a loan agreement. It’s from the agreement that the terms and conditions for the small loan you have applied for will be stated.
You are at liberty to sign on to get your small loan if you agree to it. If you are not too clear on any section you may also ask your lenders for clarification.
After you have signed to a loan agreement the amount of time it takes to get the loan depends on the lender. Some can give you the amount on the same day and other in one or two business days.
Types of small loans in Canada
1. Small payday loans
This type of small loan is borrowed for up to a month. You then repay the loan in one single installment.
The interest to be charged upon the amount varies from lender to lender. Some may charge $30 for every $100 borrowed.
The amount to be borrowed can be from as low as $100 to $1500 dollars as a new borrower. Once you become a repeat customer and you have higher levels of income, you will be able to borrow more or have access to larger credit when you need it.
Small payday loans available online are very quick to access. Also its very easy for you to be approved. Small payday loans also do not require a lot of stringent checks before the loan application is approved.
2. Small personal loans
Small personal loans are loans that can be borrowed for different purposes. There are no restrictions on what the funds can be used for. Small personal loans can be borrowed for a little longer – around 24months. This gives the borrower enough time to pay in full and prevents missed payments.
The interest payable on small personal loans are smaller hence there is less risk of missed payments.
You also not do incur any unnecessary charges because you have a generally smaller amount to pay when the time is due.
It is sometimes the case that because small personal loans are not under the same rules and price caps as small payday loans, they tend to charge more interest than the original value of the loan.
3. Line of Credit loans
Line of credit loans are temporary loans that can be used to cover emergencies. If you have a good credit score, you can have access to this small loan. As a temporary loan, it is very flexible to borrow because of its convenient nature. You are only charged interest on the amount used. Also, you can use the credit again if you want to without re-applying.
With line of credit loans, you control how much you borrow and how much you pay at any given time. Interest is charged as you use the credit so when you do not use it, there’s nothing to pay back.
The only time you pay interest or any annual fees is unless you use the line of credit
Line of credits are great when you need a small loan. You can use as little or as much as you want to the maximum limit.
The time to repay will be entirely dependent on the individual. Some lines of credit have registration and administrative fees before you sign up but this can only be confirmed by finding out from the lender.
At the end of the month, you will get a statement showing the amount you owe on your line of credit.
You must, therefore, make a minimum payment monthly. Usually, for monthly payments, you pay 3% of your outstanding balance and the interest.
Some of the considerations before getting a line of credit include your income, the current level of debt with other institutions, and your current credit score showing how best you will be able to pay your debt on time.
Misuse of your line of credit will only make things more difficult for you as you may potentially rake up debt that you are not ready for. This may take years to pay back. Its advisable to use the line of credit like any other type of loan and remember to pay back what you use.
4. Small business loans
It is tough to get financing if you’re a startup or a new business. The risk involved sometimes turns off lenders. You can only get small loans only if you’re able to prove that you are in bad need of it.
Nevertheless, there are small or microloans available to help businesses to start up. There are even programmes in Canada offered by the Western Economic Diversification Canada to give microloans to small businesses in Edmonton, Regina, Saskatoon, Winnipeg, Vancouver etc to give small loans.
Once you meet the eligibility criteria, you can have access to a loan.
Who Is Eligible For A Small Loan In Canada?
Those eligible for small loans in Canada must be 18years and above. They must also be residents and employed either part-time or full-time with a verifiable source of income.
They should also be individuals who have a checking account because it is from this account that repayment will be made and the funds also deposited.
The checking account helps lenders to know how much money goes through your account and how much debt you can take on.
Most lenders who give small loans will go through all the necessary checks so as to prevent the client from taking on more than they can handle when they apply for small loans.
Avenues of applying for small loans Canada
There’s more than one way of applying for small loans in Canada. Lenders can choose the avenue that best suits them.
This is by far one of the easiest and most available means of applying for loans. Most small loan lenders conduct business online. This allows the individual to just visit their site and then apply for the loan that they need.
Within a short time, you will be able to interact with the lender and know when your loan is approved. You can apply for loans 24/7 with some lenders and get the funds you need within a day.
• Asking from family and friends
Family and friends can be a good source of financial help for small loans when you most need it. Due to the fact that they already know you, giving to you is relatively easier.
If the traditional lenders fail to give to you because of one reason or the other, you can ask family and friends. The most important thing to remember about borrowing from them is that you will still have to pay back.
This is to prevent any future strain in the relationship that you have with them.
• Credit unions
A credit union is a financial co-operative that can be small entities or large entities with thousands of members. Credit unions can be formed by large companies, organizations and other bodies for their workers and members.
Credit unions are created and managed by the members who form part of it. In Canada its known as caisses populaires (peoples banks) in the French-speaking community. Such self – help groups are available in Canada to give small loans to those who need it.
In North America, Canada has the highest number of membership in credit unions with Quebec having the largest number of credit unions.
According to research, in 2017, there were 293 credit unions with more than 7 million members in Quebec and Ontario alone serving from 1,032 service points.
• Using Mobile Apps
People are now innovatively using technology to reach those who need small loans. Now there are many small loans that individuals can have access to over the phone. Most do not require a bank account before any funds are given.
These transactions only require the mobile phone whether it’s a smartphone or non – smartphone.
Sometimes when it comes to loans, those with meagre earnings are sometimes marginalized. If such people want to have access to any financial facility for starting a business or starting a farm, small loans are made available to them through these specialized lenders.
How it works is that it allows citizens to borrow small amounts of money that they need for emergency situations. They then have a few days to pay back after which they qualify for more loans when they need them.
The interest rates and fees charged are very minimal and will be paid from the financial account that you have on your phone. The financial account popularly known as a “mobile money” account serves as the main way by which these specialized lenders will give you the funds that you need.
These mobile small loans are available to people who will not normally get a loan to apply for when they go to the bank.
Reasons why people want small loans
1. The need for a low value short-term credit
Getting loans at the bank can be a generally expensive venture for individuals. First of all, the credit score needs to be great. Secondly, if your credit score is low you have to pay higher interest on the loan that you get from the bank.
This does not sound like exciting news for any borrower. It just spells out expenses and a bit of a headache when the time for the loan to be repaid is due.
Having said that, its worthy to note that small loans in Canada do not give a lot of hassle to the borrower.
Small loans have a relatively lower interest rate to be paid than the other types of loans. It allows the borrower to access short-term credit that he or she will be able to deal with when it’s time to repay.
You are usually not allowed to borrow beyond what you can handle. This is because the lenders are aware of your borrowing habits.
2. To pay for medical expenses
When there’s a pressing medical expense, small loans in Canada are available for those in need of it. Sometimes through no fault of yours, you or someone in the family falls sick unexpectedly.
In such times you will need cash to pay for their medical bills. If there is none available, then a small loan can help salvage the situation.
In Canada, it is estimated that about 26 million people use credit on a regular basis.
This shows the great need of loans such as small loans in Canada to help individuals. It shows that the disposable income for households is not enough to cover the emergencies that come up.
Hence when small loans are taken, they serve as a reliable source of extra income to pay for other necessary expenses.
3. To pay for home renovations
Burst pipes, overgrown gardens and leaky faucets, we all can agree, dulls the shine of your home. This goes against the idea of having a beautiful, eco-friendly and efficient home. The big question is where to find the funds to cater for these expenses.
If you find yourself in such a situation and funds are not forthcoming, going in for a small loan will help cater for these expenses. More and more Canadians are looking into improving their homes and will, therefore, look for the necessary funding to enable them to pay for home renovations. Small loans in Canada are available
4. Funding vacations
If there’s a vacation you have planned about for so long but has not yet materialized due to financial constraints, it’s possible to get a small loan in Canada to fund that vacation.
The most important check will be whether you have a viable source of income to pay back the loan. Other checks will include your job stability and credit score.
If all these checks are satisfactory, you can get your loan granted to you. Your dream vacation can become a possibility with the small loan that you take.
In Canada, small loans have the potential of being a great tool to support the finances of people. Now, more and more people are becoming interested in accessing small loans Canada for their personal and other use.
Once you go through the necessary checks and you qualify, you can have access to your small loans at Afterloans. Due to the fact that it’s a loan, it will still have to be paid back.
The more you are able to pay promptly, the easier it will be if you still want to go in for other small loans.
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.