There are several ways to borrow money personally that should be evaluated according to your credit rating, the amount requested, and the urgency of getting a personal loan. Here are the 4 main ways.
Talk to your bank
Banking institutions grant personal loans and lines of credit to their clients, but usually only after they verify that the applicant has a stable situation, an account free of payment incidents, a debt rate of at most 30%, and a good credit rating. Once the application is initiated and all these conditions have been met, you need to wait at least several days to get approval from the organization and – often – to get the funds in your account. If the bank determines that the client’s profile is too weak, it will reject the file or demand a mortgage guarantee on their house, a life insurance contract, or a pledge on their car to secure the loan.
Go through a broker
In Québec, there are brokers who specialize in getting personal loans. As they work with a large number of banking institutions and private lenders, depending on the client’s profile, they select the partners most likely to grant them a personal loan and to offer the best terms. That’s why they’re able to assist clients who have good credit ratings as well as those with bad records.
Apply for a loan with no credit check
For people with a bad credit rating, getting a personal loan from a traditional financial institution is impossible. They should therefore turn to an agency that offers personal loan solutions without a credit check. You can usually request up to $1,000 for your first application, even with bad credit. All you need to do is meet the basic criteria – that is, have a bank account in Canada that has been open for more than three months, have resided at the same address for at least six months, and have a full-time job or benefit from a CSST program, disability insurance, or a pension plan that lets you generate more than $1,200 per month.
If the loan is repaid properly, it can be renewed at an increased amount.
The other advantage of loans without a credit check is undoubtedly the response and processing time. Indeed, this type of agency can approve a file in as little as one hour during business hours and – in certain cases – deposit the funds into the account on the same day.
Go to a pawnbroker
If you have a valuable item such as jewellery, a collectible, a work of art, a branded object, or an antique weapon, you can get a loan from a pawnbroker. A loan from a pawnbroker carries a one-month term that can be renewed as long as the interest is paid every month. Unless you can turn to a loved one to borrow money, this solution is the only way to get a loan for people with little to no resources.
Depending on the desired amount, the applicant’s profile, and the urgency of obtaining the funds, there are several ways to get a personal loan. Unless you’re bankrupt, over-indebted, requesting a large sum, or make less than $1,200 per month, there’s usually no reason to be rejected by all organizations.