Many people struggle with having enough money for big purchases, such as a vehicle, dream vacation or a new home. Emergencies can come up that require all your financial resources. Leaving you wondering how you’re going to make it through your bills and accruing debts. When financial situations spring up that require more resources than you have in the bank, applying for one of the many quick cash loans in Canada can be the solution. Here’s an overview to help you understand the approval and lending process.
The Benefits of a Private Lender
Traditional bank loans have a lengthy application process and rarely favour those who have questionable credit and less than excellent scores. Conventional bank loans are unattainable for many people, either because their credit isn’t good enough or there is a frustrating wait time before the application is processed and approved. When you need cash in a hurry, a private lender is the way to go. These smaller companies can approve you for a quick cash loan without all the stress and hassle of working with a big bank.
Working with a private lender still affords you the same professional service and fairness expected from a traditional bank. However, these smaller lending institutions can be more personable and encouraging, as you are working directly with the staff that will help process and approve your application. This can take the anxiety out of needing to borrow money.
The Loan Options
Private lenders have the option to extend loans to multiple individuals, but they often specialize in approving quick loans for people with bad credit. Rather than requiring funds to be used for a specific purpose, private lenders allow loans to be used for whatever the borrower needs. There are several different forms of loans that can be used for quick cash needs.
1. Car Title Loan
When applying for a car title loan, your car is used as collateral to secure your loan. Those who default on their loan payments forfeit their car over to the lender. This can happen with a car being repossessed by the lender to settle your debt. With a title loan, you can borrow money that equals the total value of your car but no more. Even though many individuals find that this loan is more readily approved by the lender, car title loans tend to have higher rates and fees associated with them.
2. Personal Loan
Similar to the repayment process of a conventional bank loan, those who borrow money using a personal loan repay the owed amount in fixed installments. Your financial profile, such as your credit and your income, will influence how much you can borrow. The installments can be spread from three months to 120 months, depending on the lender. These loans are often considered more affordable because they come with a lower APR than a title loan or payday loan.
3. Payday Loan
For really quick cash, a payday loan can help. However, these loans are the most expensive and could have an APR as high as 272.39%. With a payday loan, the amount the lender provides must be paid back on your next payday. The lender usually requires the entire amount plus the interest charge to be paid back in one payment. Typically, a personal check or electronic bank draft is used to guarantee payment to the lender upon approval.
The Documentation for Quick Cash Loans in Canada
Though the application process varies by lender, there is a standard set of information you should expect to provide. This holds true whether you are applying online or by visiting the lender’s office.
- Government-issued ID
- Employment status (paystub)
- Date of birth
- Social security number
- Residence information
- Contact information (phone and email)
- Banking information (account number)
The Approval Process
The lender will look at your credit history and score to determine the risk of lending you money. There are many quick cash lenders who don’t have the same strict score requirements as with a conventional bank. However, you will often be paying a much higher interest rate for this leniency. The lender will also look at what kind of loan is requested and the amount, as well as look at your employment and income. Your debt-to-income ratio and income may be more important to the lender than your credit score. Funds can either be received through direct deposit or through a cash payout.
The Need for Quick Cash
Though it should not be a financial habit that you get into, there are times when emergency situations pop up that require access to some quick cash. If you find yourself in this situation, LoanConnect can see you through a financial pinch. As the premier personal loan search engine for Canada, LoanConnect will help you quickly find the lender you need.