Did you know that roughly three-quarters of Canadians have some form of outstanding debt? At the end of the day, it doesn’t matter what type of financial situation you’re in.
At some point in time, you’re likely going to need a loan. Maybe you’re financially stable, but need help buying a house. Or, maybe you need some quick cash to keep you afloat until payday.
If you’re not sure what type of loan you need, then you’re in the right place. In this guide, we’ll cover some of the different types of loans for every type of financial situation.
That way, you can get the funds you need to help you out of any situation. Let’s get started!
A personal loan allows you to borrow a fixed amount of money. Then throughout the loan cycle, you’ll pay it back, plus any interest and fees that come with the loan.
Personal loans tend to be pretty long, typically lasting between six months to five years. This type of loan can be used for anything from home improvement projects to medical bills (however it can’t be used for college financing).
There are two different types of personal loans: secured and unsecured. Depending on your financial situation and assets, one might be better for you than the other.
A secured loan uses an asset like your car or house as collateral. This makes the loan both easier to get and gives you more favorable interest rates. If you have the asset to put up, then it’s worth considering.
Just remember that if you can’t pay, then the lender can seize your property which makes it risky. The other type of personal loan is an unsecured loan.
With this option, you aren’t putting up anything for collateral. This makes the transaction riskier for the lender.
Because of this, you will likely require a high credit score to get one. In addition, these loans tend to carry higher interest rates.
Did you know that more than 50% of Canadians say they struggle to pay their bills? If you fall in this category where you need money to hold off until your next paycheck, then consider a payday loan.
This type of loan, also known as a quick cash loan, is much more short-term than a personal loan. Usually, they only last between two weeks to a month.
They’re ideal for people in rough financial situations because many lenders, like Kingcash.ca, offer them as no credit check loans. This is ideal for people with a bad credit score that still need a loan.
That being said, there still are some loan requirements to qualify for these types of online loans. Make sure to check out our guide to find out what you should know about them.
Line of Credit Loan
A line of credit loan allows you to borrow as much money as you like up to a determined, pre-set limit. Keep in mind that you don’t need to use all the money. You can use as much or as little of it as you want.
When you borrow the money you will pay interest on it until it’s been paid off. The interest rates that come with a line of credit loans tend to be variable.
However, they’re generally lower than the interest rates that come with credit cards and personal loans. A line of credit is a good option for people with excellent credit scores.
That being said, it’s easy to get a hand on the money in your line of credit loan. So, you need to make sure that you’re able to control your spending.
Credit Builder Loans
If you suffer from a low credit score, then you’re likely finding it hard to find a good loan. One solution to this is to look for special credit builder loans.
These are small loans that you can repay over some time with relatively low-interest rates.
This, in turn, improves your credit score as long as you make all the payments on time. It’s a good option for those looking to recover their credit scores after facing financial hardship.
If you are a student that needs money for college, then you have two loan options. The first is a government-sponsored student loan. This type of loan is given to eligible students that attend designated schools.
The amount you receive will be based on factors like your family income, tuition cost, and the province/territory you come from. However, the biggest advantage that comes with government-sponsored loans is that they’re tax deductible.
The other type of student loan is a private one. With these types of loans, you’re responsible for paying back all of the interest that comes with them yourself.
A home is the first huge purchase that many families make. However, very few people can afford their property on their own. So, banks will provide long-term loans that typically last a decade or two.
Mortgages are one of the most common types of loans. They’re typically offered by large banks and the interest rates that come with them tend to be competitive.
That being said, the exact amount that you’ll receive will depend on your credit history and any down payments you can put down.
Want Access to Different Types of Loans? Contact Kingcash
We hope this guide helped you learn about some of the different types of loans available to Canadians. If you haven’t had luck getting a loan from traditional financial institutions, then it’s time to look for a solution.
And that solution is Kingcash. We pride ourselves on offering alternative options that are both fast and easy. King Cash can provide you with same-day loans without a credit check.
So, if you’re ready to get access to the cash you need, then make sure to contact us today.