Posted in Loans and Mortgages

Types of Loans Explained

There are a variety of Loans available to cater to each individual’s needs and what they need a loan for. Some loans will have longer down payment durations, and others will have higher interest rates. This article provides information on the loans that are mostly applied for in Canada.

Below are the most applied for loans in Canada which can be found from most banks in the country.

Secured Loans

Secured loans are usually popular among those with bad credit scores. If you do not have a great credit score, a secured loan may be given but with a higher interest rate than with usual loans. Depending on the type of collateral you will be able to provide, the bank can apply for up to $25 000 or as little as $5 000.

The lender specifies the duration of time you have to pay back the loan, and you will need to be older than 18 years of age.

Unsecured Loans

Unlike Secured loans, unsecured loans do not need collateral but will require the borrower to have a positive credit history. The interest rate is much lower than with a secured loan and is a great choice if you are looking for a long-term loan or taking care of an emergency without having a large repayment each month.

Student Loans

A student loan is perfect as a chance to fund university costs after graduation. Student loans have helped many people to stay in university when their funds run out, and they are unable to afford to study further. Requirements to get a student loan is just to provide proof that you are enrolled in a university.

Amounts available to get on a student loan can go quite high but depends on what the cost of the university is.

Payday Loans

Payday loans are one of the most popular ways of getting money for an emergency or just to get through the month. These are short-term loans that last anywhere from two weeks to a month. Most banks offer up to $1500, with the payment needing to be paid back quickly. If a person cannot pay the loan, they need to take out another loan to pay for the payday loan.

The loans on this list are the most frequently applied for loans in Canada and provide great financial assistance for your specific needs.