Planning to start your business or a buy a car you had your eyes on but couldn’t because of budget constraints? The solution lies in long-term loans. They are suitable for people who want to get a huge sum of money as a loan and repay in installments spanning over a period of 2 years or more.
The biggest hindrance in getting a loan is having a bad credit score and unfortunately, this is the major requirement set by the bank when granting a loan application. Therefore, if you do not have a fair score, consider getting your application disapproved from the banks in Canada. Fortunately, there is still a hope as private lenders can help you to get the required amount despite having a bad score.
There are numerous private lenders offering their services all over Canada. Right from short-term to long-term loans, they can offer every type of loan provided the applicant meets the eligibility criteria. Their eligibility criteria include having a permanent source of income, a clean criminal record, proven ability to repay the loan etc.
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Get Approved With Bad Credit
Explained below are some of the features of loans offered to people with a low financial score:
Secured or Unsecured
Loans offered by private or direct lenders in Canada can be secured or unsecured. Secured loans are those, which are backed by a security. This security can be an asset owned by the borrower. It is to be kept with the lender as collateral. The lender, in case of non-payment of the loan, can take foreclosure actions on the asset.
On the other hand, unsecured loans are not secured with a security. Therefore, they are often referred to as high-risk loans.
It is a known fact that long-term loans are to be repaid in form of installments. Generally, one installment is to be paid every month. The amount to be paid in each installment and the total number of installments are pre-fixed.
A payment schedule is made keeping in consideration the convenience of both parties, which is duly signed by them and the borrower is expected to follow it rigorously. Failing to do so, they can receive collection calls from the lender, which can prove to be stressful for them.
In addition to them, calls can also be made to their family members, relatives or employers.
Read More: Benefits of Installment Loans
Impact On Credit Score & History
A long-term loan can have a great impact on the financial score and history of the borrower. If they are repaying the loan on time, it can help them to improve their score, which can make things quite easy for them in the long run. They will be able to get their loan applications approved easily with a fair score.
However, on the opposite side, it can have an adverse effect on the score as well. This can happen only if the borrower is not paying the installments on time. Their bad score can fall even further leaving them in an even more daunting situation.