Personal loans have become a need for many in Canada. People often struggle with their money due to increasing expenses and rising costs. Additionally, life is unpredictable, so unexpected expenses need to be compensated for as well.
You never know when your car may need an instant repair or a sudden home improvement project that can’t be delayed anymore. Such expenses become difficult to fulfill when you don’t have instant funds or significant savings. In these situations, loans are quite helpful.
With a good credit history, your application can easily get approved. You can go to banks, credit unions, brokers, or direct lenders depending on how much money is needed, how quickly you need the approval, and what eligibility criteria you can easily meet.
On the other hand, we have people who either have bad or fair credit. These are categories of credit score that may create problems when trying to qualify for loans. Let us first understand what credit scores are.
Understanding a Fair Credit Score
Your credit report is a record of your financial activities. For example, the money you have borrowed before, the rent and bills you pay, things bought from credit cards, any bankruptcies filed, collections accounts, etc. Each credit report gets graded and this is known as the score.
Excellent scores are those that are 700 or more. Then we have good scores that are either 680 or more. Fair scores are 640 or more. When your grade falls below that number, it is a bad credit score.
The better your score is, the less the lender will consider the risk of providing you with a loan. A fair score means that your ability and responsibility to pay back the borrowed money is fair. Lenders obviously prefer good and excellent scores but a fair score is obviously better than a bad one. It means that you still have plenty of options to get approved for easy terms and conditions.
Loans and Lenders
Banks are considered to be the most reliable sources of borrowing money. However, they have become less popular over time due to stricter policies and lengthy approval procedures. Credit unions are convenient options but no feasible when you need to borrow a large sum of money. One can also go to brokers that find the most suitable lenders on your behalf. But it means you can’t personally be satisfied with the lender’s reliability and transparency.
The best option to consider is a direct lender. These lenders typically work online; offering application and approval entirely online. Due to their well-established websites, it is easy to find information on them. Therefore, one can look up information up to personal satisfactory standards.
Read More: Which Loan Company Is The Best For Bad Credit?
How To Apply?
With direct lenders, the application and approval process does not take much time. Your first step should be finding the most suitable lender. Shortlist a few that are willing to consider a fair credit score. Compare them based on what information you find and select the best one.
Once finalized, apply using the online form. Once submitted, the lender will send you a contact, if you agree with the terms and conditions, sign and submit back. Upon receiving, the funds will be transferred to your provided bank account.