Whether you want to buy a car, pay for school fees, travel, renovate your home or any other thing, do not let the lack of finances curtail your dreams. Apply for a personal loan to get the desired financial backing. Here is how you can make sure that you get the best personal loan rates in Canada irrespective of your credit score.
- Select the Best Lender
Picking the right lender can bolster your chances of qualifying for a personal loan at a low-interest rate. If you have a low credit score, banking institutions among other traditional lenders will most likely reject your application or issue a high-interest rate. This situation calls for alternative lenders whose goal involves helping credit-constrained borrowers.
To get the full list of personal loan providers in Canada, visit Smarter Loans – Canada’s Loan Directory.
- Go for Secured Loans instead of Unsecured
Bear in mind that a personal loan is generally an unsecured loan, which means that it does not require any collateral. On the other hand, a secured loan is one that is backed by collateral as a guarantee. Collateral can be your savings, investments, home, car or any other valuable asset that you own. As such, when looking for the best personal loan rates, you should go for a secured personal loan. Since this type of loan is less risky for lenders, most of them provide such loans at a reduced rate due to the provision of security.
- Check your Debt-to-Loan Ratio
A debt-to-loan ratio is an important factor to consider if you want to get a good personal loan rate. The ratio measures the portion of your gross income that is spent on repaying debt. In Canada, any ratio above 36% is not healthy and can be an impediment as far as securing a personal loan is concerned. If your debt-to-loan ratio falls in this category, you may want to start paying some of your previous debts before seeking a personal loan in a bid to get a desirable rate. Personal loans can be obtained by people with less than stellar credit too, however keep in mind that the interest rate may be higher.
- Try out an Online Lender
Unlike traditional lenders such as your bank, online lenders are most likely to lend you money. In fact, they do not depend a lot on your credit score to approve your loan request. Their creative approach allows them to deliver personalized services to their customers. Aside from the possibility of getting the preferred personal loan rates, you can complete the application process anywhere as long as you have Internet connection and a device that can connect to the Internet.
Online personal loans have become extremely popular in Canada in the past few years thanks to the fast developing technology and online companies that are able to service Canadians without any physical branches.
- Don’t be Greedy! Apply for the Amount you Need
When applying for a personal loan, request only for what is enough to meet your needs. Keep in mind that you will still pay back the money with interest included. Worst case scenario, the interest rate may be higher if you borrow more from a lender who relies on risk-based pricing to conduct business. This approach typically assesses the risk involved in lending you money. Those who are considered as high-risk borrowers end up paying high interest rates and the reverse is true. Make sure to take your time when comparing personal loan providers in Canada. Use Smarter Loans to compare products, terms, interest rates and read reviews about Canada’s most reputable personal loan companies.