How does Canada Personal loan work?
A Canadian personal loan is that sum of money that you borrow from a lender to sort your issues.
For example, you can use a personal loan to pay for the following;
- home repairs or renovations
- Medical bills
- plan your wedding
- Funeral costs
- Vacation costs
- Emergency expenses
- consolidate debts and many more.
Canada Personal loans are different from other loan types like;
Car loans – used to fund a vehicle purchase
Student loans – used to fund education
Mortgage loans – Used to fund a home purchase
Personal loans are a lot similar to other types of loans in the sense that the structure is as follows; You borrow money from a lender and pay him back with interests and fees depending on the agreement.
Things to consider before applying for a Canada personal Loan?
When it comes to Canada personal loan, there are a lot of lenders you can borrow from. However, you need to consider the following factors to choose the right lender for you.
- Loan amount
- Fees
- Interest rates
- Term Length
- Terms of repayment
What are the different types of personal loans in Canada?
There are two types of Canada personal loan and they are as follows;
Secured Canada personal loan
A secured personal loan is a type of loan that requires collateral as one of the requirements before the lender will lend you their money.
This means if you put up your house or car as collateral to get your loan, if for any reason you fail to pay back the loan, the lender will use your collateral to settle your debt.
Lenders are happy to give out these types of loans because they have minimal risks involved and you can be eligible to get a large loan amount with a low-interest rate.
Unsecured Canada Personal loan
These types of personal loans don’t require collateral before they are approved. However, they are considered high-risk since there is no collateral to collect from you in case you fail to repay the loan.
