Benefits of Getting Online Loans in Canada
Emergencies can happen anywhere in the world, including Canada, especially when they least expect them. They’re quite unpredictable. The most rampant are money emergencies.
What comes in handy to rescue Canadians from being stuck financially are online loans. They can be useful, whether you have to go to the hospital for some medication or clear some fee balance at school. As you probably already know, fulfilling an urgent need for money to sort some unforeseen emergency can be a problem, if you live far from the bank or your traditional lender takes time to process the funds you’re trying to borrow.
Online loans in Canada may be a better choice. You can borrow the money you need online and have the funds in as fast as fifteen minutes. Thanks to their improved automated system, online loans have way faster approval process than other means of getting loans.
Online loans may still be young in the country’s lending and borrowing landscape, but they effectively make up for it by offering extraordinary convenience to borrowers. Take a look at the eleven benefits of getting online loans in Canada listed below.
- Brings Greater Convenience
As already mentioned, it’s incredibly convenient to obtain an online loan. You’ll notice that it’s immensely easier to apply for a loan from online lenders over the traditional ones, whether you’re applying for short term loans or personal loans. You don’t need to visit the bank several times to check whether you got approved for a loan. All you need is to fill your details appropriately through the online lender’s website or app. You’ll then receive a confirmation message indicating the exact amount the lender awarded to you.
- Entails Less Process
Getting loans from traditional lenders is totally different when applying for one online. In getting other loans, the borrower has to fill a lot of paper works and submit them for consideration. Not to mention, there’s a need to look for a guarantor to have a higher chance of your application getting approved. With online loans in Canada, you only need to access the loan lender’s website or download their loan app and create an account with them.
Online loans don’t require paper works, and your loan application will be processed immediately. It saves anyone the hassle of physically traveling to the bank or traditional lender’s office and standing in long queues just to wait for their loan to be approved.
- No Checking of Credit Score
Some people still believe that you’re not qualified for any loan if you have poor credit. That’s certainly not the case. It’s possible to get loan approval from online lenders, even with no credit check. You’ll only need to fill some basic requirements to qualify. There’s no need to worry about online lenders scrutinizing your credit history.
While it’s true that some online lending companies still ask for a credit check, it only happens when you’re trying to negotiate for a more considerable amount. Overall, most online lenders don’t do credit checking.
- Saves Time
When borrowing money from online lenders in Canada, you’re required to fill only a few details than the traditional way of applying for a loan. It’s the reason why online loans are arguably the best option one can consider when facing any financial challenges. After submitting your application, your request will immediately be processed, and you’ll get a confirmation via email or text once approved. It saves you both time and money.
- Your Level of Income Decides How Much You Can Borrow
Depending on the borrower’s monthly income, the amount one can get from an online loan varies. Online loan companies don’t accept an amount in your application that doesn’t align with your salary. Is this policy a good thing or not? While some may see it as a disadvantage, it’s, in reality, a benefit. It only means you’ll be able to pay off your loan quickly. As you probably would agree, more financial troubles instead of a solution to a financial problem result from borrowing an amount that exceeds your income.
- You’ll Have A Range of Choices
When it comes to instant online loans, three broad choices exist.
- The first is the type of instant online loan. In it the borrower is required to submit a name and other details of another person or party who will stand as the next financially responsible for repaying the loan. It’s known as the online guarantor loan. The next financially responsible or the guarantor should pay back the borrowed amount in case the primary borrower is unable to accomplish it. Financially stable friends or family members, especially parents, usually serve as guarantors in this type of online loan.
- Second, is peer-to-peer lending, also known as P2P lending. It’s a relatively new approach where instead of borrowing from an institution, the borrower will get the loan directly from a person or a group of individuals. You’re borrowing from strangers here. You and the lender will also negotiate the loan terms such as interest and repayment period.
- Next is the income-contingent online loan. Lenders that offer income-contingent loans aren’t concerned with your credit history. They only look at your current ability to pay. They focus on your salary and other sources of income with little concern about your credit score. If you’re one of those individuals who spent a prolonged period of being unemployed and just recently got back into the corporate world or once again have a reliable source of income, income-contingent online loans are the right choice for you.
- Charges Lower Interest Rates
The cost to the borrower of taking out an online loan is cheaper than other means of borrowing money. How’s that possible? It’s because online lenders in Canada rarely have the overheads of traditional money lenders and banks that both have brick-and-mortar premises. The cost of running a loan company online is lower, thanks to lower investment risks and lower overheads.
Applicants also don’t need to worry about those variable interest rates that heavily burden a borrower if he decides to take out a debt consolidation loan. The rate in online loans is fixed on long-term and larger loans.
- Flexibility for Personalized Loans
Something that online lenders provide, but traditional banks don’t is the flexibility for personalized loans. Conventional financial institutions eventually do it, but not until the loan process is already at an advanced stage.
Online loan providers make it easy for borrowers to determine how much they could borrow, when to pay back each month, and how much is the monthly payment of their loan. Of course, it can take time to juggle the figures. With an online calculator, however, borrowers can plan their finances around the loan. That way, you know precisely the amount you’re going to pay back, including when it should be paid off. You’ll see what’s affordable. Based on your personal preferences, you can also request for adjustments on the repayment terms.
The site or app of online lenders will make the calculations before you decide to move to the next stage and will adjust the terms in an instant. That’s a good thing because it isn’t only flexible; it’s also transparent. Just access their website or open their mobile application and put in your desired loan amount, the number of months you wish to repay it, your income, and then press a button to submit it.
- Personal Information Confidentiality
Online loan companies aren’t authorized in any way to distribute or share your personal information with other platforms or with any third party. If you’re wondering if providing ID card information and bank details to online lenders is safe, there’s nothing to be afraid of. Your personal information is and will always remain confidential. You can rest assured that your bank details won’t go in the wrong hands.
- No Restrictions on How to Use Funds from The Loan
Several traditional loans can only be utilized for one or two things as restricted by the bank or other financial institutions. For instance, if you get a housing loan, you can only use the funds for building a house, nothing more than that.
Online loans in Canada have no limitations in terms of what purpose it can be used for. You’re not bound by any limits. You won’t have a problem with your lender, even if you use the money for whatever reasons.
- Automatic System for Lending and Transferring Funds
The borrower doesn’t need to do anything once online loan providers in Canada approve the application. The online lender will transfer the money to the borrower’s bank or PayPal account directly. The amount you borrowed can also be automatically transferred from your bank or PayPal account back to the lender, including the added interest, once you’ve gone through the rough patch or your payday has already arrived. Since the funds will be transferred electronically, expect the process to be fast, easy, and more convenient for you.
Although online banking has already been around for many years, online loans have actually been slower to adopt in Canada. Today, however, there are already plenty of reliable online loan providers to choose from. Getting online loans is similar to obtaining a loan elsewhere, but much more convenient. The benefits of getting online loans in Canada discussed in this post should encourage you to give it a try.
More great Clever Dude articles:
Image sources: Shutterstock.