Loans are a financial necessity for many people all over the world, especially in the current economic climate. Canada is no exception to this, with many people opting for loans to fulfill their personal needs.
The loans can extend from house loans to very small personal loans. However, all types of loans share the same characteristics in line with the Canadian Law.
If you are looking for flexible loans solution this article is definitely for you. Let us have a look at different loans in Canada, and everything about them.
Types of Loans
Canada offers all kinds of loans for its citizens. Loans are available from both the government sector and the private sector. Loans can range from small personal loans to very large loans. Personal loans are often held against the property of a person and paid in installments.
Vehicle title loans, on the other hand, are not held against any particular property of the borrower, but simply against their vehicle. Vehicle title loans are often more loose and relaxed as compared to personal loans, especially in payment methods. Some lenders actually allow their creditors to pay an upfront amount, called down payment, by their own choice. Moreover, these loans are often paid off in installments and are a great way to make a good credit history, or improve a pre-existing one.
Asset-based loans are a great way to secure some funds very quickly. These loans are often held against a valuable asset of the borrower, such as some jewelry or a property. By leveraging the assets, you happen to get cheaper financing rates and are able to borrow large amounts of money straight away. Purchase finance loans are normally opted for when someone needs to purchase something. These loans have the purchased item held against the payments.
Student loans and house loans are special cases where a lender or bank conducts a research on the person applying before granting a loan. House loans typically have the house as the lender’s property until all the debt is paid off. On the other hand, student loans are offered to every single citizen of Canada and are granted after checking the eligibility of the student.
Credit History
Now that we have discussed the types of loans, let us have a look at the specifications of Canadian loans. The most important thing for anyone to remember while applying for a loan in Canada is a credit history.
The credit history of a person is their history with loans. The history includes the number of loans / bad credit loans the person has previously taken, along with their amount. In addition, payment history is what makes up a person’s credit score. A good history means paying off the loans at the right time, without delaying. Paying before the due date and paying larger sums as compared to the installments have a positive effect on credit.
The importance of credit history lies in the fact that it reflects a person’s chances of obtaining a loan. If someone has a good credit history, they can obtain a loan relatively easily. On the other hand, a bad credit history is a very harmful thing to carry around, especially in Canada.
Canadian banks and the entire loan industry normally do not hand out loans to individuals with a bad credit history. People have to wait in line for ages to get a chance. Although some firms do offer loans to people with a bad credit history, these loans are usually very small because no one wants to risk