An unsecured personal loan is a loan that doesn’t require you to put up any collateral or security. This means that if you can’t repay the loan, the lender can’t seize your home or car. Unsecured loans come with higher interest rates than secured loans, because there is a greater risk that the lender won’t be repaid.
The terms and interest rates on unsecured loans vary depending on the lender and on your credit worthiness, so it’s important to find a lender that suits your needs.
What can a personal loan be used for?
Banks do not put any restrictions on the use of the funds of personal loans, which means that a personal loan can be used for a variety of purposes, including
Where can you get unsecured personal loans in Canada?
Unsecured personal loans in Canada are available from a variety of lenders in including
- Banks: Banks are the first choice for most borrowers who have good or excellent credit ratings. In most cases, your bank will be more than willing to lend out an unsecured personal loan to you based on your past transaction history with the bank and the overall credit history. The downside to banks is that they require a lot of paperwork, which means that from the time you start your application the funds can few weeksa to land in your account.
- Credit unions: Credit unions offer lower interest rates as compared to banks in Canada but in order to get an unsecured personal loan from a credit union, you must be a member of that credit union. It is also easier to renegotiate the terms with a credit union, as the primary aim of any credit union is to serve their members/customers.
- Online lenders: You can get unsecured personal loans online in Canada, through a Fintech lender. They offer some of the lowest interest rates while offering lightning fast speeds. Most online lenders can deposit funds on the next day, which makes online lenders the go-to option in case of financial emergencies or when you don’t have time to wait for appointments and paperwork.
How to get an unsecured personal loan?
To get an unsecured personal loan in Canada, you’ll need to meet the lender’s eligibility requirements. Most lenders require that you be at least 18 years old and have a good credit score. You’ll also need to provide proof of income and employment.
Eligibility for an unsecured personal loan depends a lot on your credit worthiness which includes your credit score, income and debt-to-income ratio. Lenders typically require a minimum credit score of 600 before approving you for a loan. Anything between 300-600 is considered a bad credit score in Canada. However, if you have bad credit, you may be able to get a loan through a subprime lender.
Once you’ve been approved for an unsecured personal loan, the lender will provide you with a loan agreement. This document outlines the terms of the loan, including the amount you’re borrowing, the interest rate, and the repayment schedule. It’s important to read the loan agreement carefully before signing it.
Make sure that you understand all the rules, charges and penalties. If anything is unclear, ask the lender before signing the contract. Make sure that you have full disclosure from your lender. See the chart below for Symple Loans eligibility requirements.
Symple Loans eligibility requirements:
- Be at least 18 years old
- Be employed and receiving employment or retirement income over $25k annually
- Be a Canadian citizen or permanent resident
- Reside in Canada (excl. NS, QC, SK)
- Have no current or previous consumer proposals or bankruptcies
What to do if you can’t repay an unsecured personal loan?
If you can’t repay an unsecured personal loan, contact the lender as soon as possible. The lender may be able to work with you to come up with a repayment plan that fits your budget. If you can’t or don’t repay the loan, the lender can take legal action to recover the money you owe.
How do you get the best interest rate?
To get the best interest rate on your unsecured personal loan, shop around. Compare the interest rates and terms offered by different lenders to find the one that’s right for you. It’s also important to have a good credit score, because this will help you qualify for a lower interest rate.
How to apply for an unsecured personal loan?
If you’re in the market for an unsecured personal loan in Canada, here’s what you need to do:
- Compare interest rates and terms from different lenders.
- Choose a lender that offers the best interest rate and terms for your needs.
- Complete an online application or visit a branch to apply for the loan.
- Provide proof of income and identity.
- Wait for approval and receive your funds.
If you’re looking for a quick and easy way to get the money you need, an unsecured personal loan could be the right option for you. Just be sure to compare interest rates and terms from different lenders to find the best deal.
What are the pros and cons of getting an unsecured loan?
The pros of getting an unsecured personal loan include:
- Quick and easy approval process
- No collateral required
- No risk to personal property
- Can be used for a variety of purposes
- Get unsecured loans online if you have low or bad credit
The cons of getting an unsecured personal loan include:
- Higher interest rates and fees than secured loans
- Can be tough to get approved if you have bad credit
- Risk of litigation in case of default
- Smaller loan amount
Well, there you have it! You now know what an unsecured personal loan is, where you can get one, how you can get one, and if it’s right for you.
Use the Symple Loans Quick Quote to determine your loan rate, Apply Quickly and Easily Online, and Get Approved.
With Symple Loans, you can borrow up to $50,000, choose loan terms up to 7 years, and have the flexibility to pay off the balance at any time without fees or penalties.
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