With a diverse economy, excellent healthcare, great schools and an innovative business spirit, Alberta is known for its high standards of living. It is amongst one of the most desirable places to live in Canada. However, with high standards of living come high costs. If you ever find yourself saddled with unexpected expenses, or a temporary reduction in income, you may seek help in the form of a personal loan.
Fortunately, when it comes to personal loans in Alberta, you have dozens of products and lenders to choose from. It’s important, though, to do your homework and find a loan that can meet your needs without sending you into debt.
At LoanConnect, we make it our mission to connect aspiring borrowers with reputable and trustworthy lenders who truly want to help individuals out of tight financial situations. The lenders we partner with cater to individuals in all credit tiers, from Excellent to Poor. They also offer some of the most competitive rates in the industry, with flexible terms and conditions. Applying with us won’t affect your credit score, but can result in a preapproval in as little as 60 seconds. To experience a quicker and better way to apply for personal loans, give our personal loan search engine a try.
What Is a Personal Loan?
While other loans have explicit purposes – such as mortgage loans, auto loans, and student loans – you can use personal loans for just about anything. Use them for wedding expenses, vacation costs, debt consolidation, home renovation costs, or all of the above. Most people in Alberta will turn to personal loans when no other loan type is appropriate for their needs.
How Do Personal Loans Work?
When shopping for personal loans in Alberta, there are three terms you should familiarize yourself with: secured, unsecured and installment. Most personal loans are unsecured, meaning the lender does not require collateral and therefore cannot seize any personal assets if you default. However, they can seek repayment via other legal means, such as through a lawsuit or wage garnishment.
Alternatively, a secured loan means the lender requires some form of security. Though you may hesitate to secure funds with an asset, doing so could land you a much lower interest rate.
Finally, know that most personal loan lenders require that you repay the loan in installments. It’s important that you do not confuse “installments” with “minimum monthly payments”. With an installment loan, you pay a fixed amount each month on a periodic basis. Unlike minimum monthly payments, you generally cannot pay more than the installment amount without acquiring penalties.
How Do You Qualify for Personal Loans in Alberta?
Though personal loan requirements vary between lenders, most have a minimum credit score and income requirements. Ideally, you will have a 650 credit score or higher. You should also be able to show proof of employment or, at the very least, ability to repay your loan. Sufficient proof of income may include recent tax returns, pay stubs or alternatives, such as disability or unemployment compensation and pension.
Can You Get a Personal Loan With Bad Credit?
Because most personal loans in Canada are unsecured, very few lenders are willing to extend offers to individuals with bad credit. That said, you may be able to qualify for a loan with poor or no credit.
Private lenders have been known to approve individuals with scores as low as 550. However, if your score is less than 600, you can expect to pay significantly higher interest rates. Canada caps personal loan interest rates at 60%; but a low enough score could mean your offer approaches that limit.
Will a Personal Loan Inquiry Affect Your Credit?
When you submit an application through LoanConnect, your credit score will not be impacted. Our pre-approval process is based on your financial information and a soft credit check. A hard credit check, which affects your credit, is only completed after you’ve chosen which lender to move forward with. However, because our application process presents you with lenders whose pre-approval criteria you match, your chances of approval are increased. This decreases the likelihood of needing multiple hard checks against your credit. And if treated responsibly, the positive impact of your loan repayment history outweighs the impact of the hard inquiry.
Can a Personal Loan Help Your Credit?
When you pay your personal loans on time and without incident, they should help you build up your credit score. Personal loans contribute to your credit mix, lower your credit utilization rate and contribute to your positive payment history. However, as with any type of credit, if it’s neglected, it could have a severe adverse impact on your score. If you’re in the market for a personal loan, do your homework, and borrow from only the most reputable lenders. For comprehensive help finding the right product, use our personal loan search engine.