Loans play an integral role in our society. They allow you to get a quality education if you cannot afford high tuition fees, will enable you to invest in real estate and other industries, let you grow your business, and help you purchase expensive commodities like a car and house. Likewise, if used wisely, loans can help you escape economic poverty. Many companies are dedicated to providing loans to consumers other than banks, giving you many options for a suitable loan policy. If you want to apply for a loan Canada gives you the following options:
Types of Loans in Canada
Table of Contents
1. Payday Loans
A payday loan is a short-term cash advance. Through it, you can take out a loan of up to $1,500 and repay it when your paycheck arrives. You have to repay payday loans quickly, and if you cannot do so, you can either take out another loan or let your bank account go into deficit.
Terms of payday loans differ from region to region, but these loans are known to have higher interest rates. It is common for a loan of $100 to have an interest of $25. However some banks have more lenient policies. They even grant discounts if you directly deposit the amount or have pre-authorized payments in your account. You’ll find many companies dedicated to providing payday loans online.
2. Student Loans
Student loans are an excellent way for you to pursue higher education if you are not financially able to do so. In Canada, more than 1.7 million students are currently using student loans. These loans differ from other loans as they do not require you to put up collateral. Instead, they demand evidence that you are enrolled or have recently graduated from an educational program. There is no limit to the amount you can borrow through student loans. It all depends on your situation and fees. And since the loans do not involve any credit score, they are interest-free. You repay your student loans through direct withdrawals from your bank account.
3. Line of Credit Loans
You can use these loans to pay extra expenses. For example, if you travel somewhere and find yourself without cash, you can use a line of credit to purchase additional items. You will be able to borrow any amount through a line of credit and just continue to pay interest until you repay it. You may take out another loan even if you have not repaid the previous one to borrow another. However, this loaning policy is only available to you if your credit score meets the requirement. Compared to payday loans, the interest rate for line of credit loans is lower.
Endnote
While it may be true that loans do not guarantee you a more prosperous future, that does not mean that being in debt is a sign of financial instability. Substantial industry leaders often draw out loans to help their companies advance further. Even the state borrows money to start welfare projects for the public.
While applying for loans, you should ensure that the modes you use are viable and certified. Taking money from unauthorized businesses may be tempting, but their dealings can often be illegal, and their interest rate can be hard to repay. Make sure to rationally consider the repayment time frame and interest rates before taking out loans.
