Personal loan is a kind of general purpose loan, unlike specific loans like student loan or car loan. As the term suggests, borrower can use it for personal purpose like consolidating debt or meeting emergency medical expenses, etc.
Concept of personal loans seems lucrative and getting approved is challenging. You need meet pre-requisite qualifications for personal loan approval.
Certain facts about personal loans, you need to understand, before applying.
Loans are unsecured
It means borrower does not have to submit an asset as collateral upfront for loan approval. Lender does not possess any leverage in case of borrower’s default, so personal loans are hard to get. In such scenario, lender can take legal action or hire collection agency [some of them employ harsh tactics like constant harassment, which is illegal].
Amounts are fixed
The amounts for personal loans are fixed. It will be determined based on borrower’s credit score, borrowing history, and income.
Fixed interest rates
Interest rates will not change, all through the loan duration. Moreover, just like fixed loan amounts, the interest rates will be based majorly on credit rating. The better credit score the lower will be the interest rates. Loans with variable interest rates are hard for managing payouts because of consistent fluctuations in interest rates.
Fixed repayment period
Personal loan repayment period are fixed ranging from 6 months to one year for small amounts and from 5 years to 10 years for large amounts. It means small monthly payouts will get lengthy repayment period but remember interest will be significantly more than short repayment periods.
Credit score impact
In case of monthly payment default, credit scores get affected negatively, which will increase the risk of getting future loans or even credit cards. Alternatively, if you pay on time then lenders will report your loan account details to the monitoring credit bureaus. Your credit score will improve.
Stay away from scam lenders
There are several scam lenders, who steal from desperate borrowers having bad credit history. They are swayed into paying upfront commission of a specific amount via cash deposits or wire transfers to get loan approval. The scammers get the funds and vanish in thin air.
Therefore make sure to borrow from reliable financial sources. Argent Direct loans is an online portal that offers personal loans to people with good as well as bad credit. Application process is easy and quick.
For small loan amounts ranging from $500 to $1000 the borrower needs to be –
- Canadian resident
- 18+ years
- Employed for minimum 3 months
- With no bankruptcy situation
- Monthly income more than $1200
- Have Canadian Bank account for money transfer
You will get a variable credit contract via e-mail or fax, which needs to be read, understood and signed for loan approval. The money will be deposited directly in your Canadian Bank account.
It is obvious that unsecured loan from right lender with satisfactory terms can help you reduce the financial pressure, which exists.