Home Equity Loans

How to chose a loan type.

When selecting the right loan, there are multiple factors you need to consider carefully.

When you're considering applying for a loan, it's important to first identify the purpose, as this will help guide your choice of loan type and lender. For instance, if you're seeking a personal loan for general purposes like a vacation or a big purchase, you'll have more options available compared to someone applying for a debt consolidation loan.

1. What do you need the money for?

2. What interest rate are you being offered?

When comparing interest rates from different lenders, be sure to take into account both the APR and the monthly rate. This is especially helpful when you're choosing between lenders with similar loan offers.

3. What type of repayment plans are available?

The repayment schedule you select will determine not just the frequency of your payments, but also how fast you can pay off the loan. Generally, you’ll have the choice of monthly, weekly, or bi-weekly payments. If your goal is to save money and pay off the loan sooner, opting for bi-weekly payments is usually the most effective choice.

4. Are there any additional fees?

Generally speaking, some lenders will have a couple of fees added to the cost of your loan. But, it’s important that you make sure you aren’t being charged any illegal fees or that the cost of the fees is not higher than the legal limit.

5. What do customers have to say?

In most cases, lenders may add a few fees to the total cost of your loan. However, it’s crucial to ensure that these fees are legal and that they don't exceed the allowed limit.

Get a free, no-obligation personal loan quote today, with rates starting as low as 9.99%!

You can apply without affecting your credit score.

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• Employment Insurance Loans

Once you've chosen the loan type and lender that suit your needs, it's time to apply. The simplest way to do so is by applying online.

ibeloans.com Loan Application

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How to Apply a Loan Online

Loan Types

You can also follow our guide below to learn how online loan applications work.

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Step One: Complete the Online Application

Go to the lender’s website and access their application form. This will only take 1 to 5 minutes to complete. You’ll be required to provide your personal details, employment information, and financial data.

Step Two: Gather and Organize All Required Documents

After submitting your online application, the next step is to gather any required documentation. This may include bank statements, proof of employment, a government-issued ID, or other supporting documents. It’s important to collect all the necessary paperwork upfront to avoid delays. Having everything ready means that if the lender requests additional information, you’ll be able to provide it promptly, speeding up the approval process and ensuring a smoother experience overall.

Step Three: Keep an eye on your email and be ready to answer your phone

After submitting your application, stay attentive to your email, phone, and text messages for any communication from the lender. Respond promptly and provide the requested information to ensure a smooth and quick approval process.

Step Four: Kindly await approval

While waiting can be tedious, the process usually takes no more than 48 hours. Response times may vary by lender, but if you're eager for an update, you can always reach out to them for the status of your application.

Step Five: Funds deposited into your bank account or cheque

Once your loan is approved, the next step is receiving your funds. Typically, this process takes no longer than one business day, depending on the lender’s policies. Most lenders will transfer the approved loan amount directly into your bank account, ensuring quick access to the funds. However, some lenders may offer an alternative option, such as receiving a cheque instead of a direct deposit, allowing you to choose the method that works best for you.

Please note: If your application is rejected, you'll need to start the process over with a different lender. That’s why it’s a good idea to apply through Canada’s premier loan search platform when seeking a loan online. Click here to begin.

Learn More About How to Apply for a Loan

• How to apply for a personal loan (Brief Details)

• The Best Reason to Give When Applying for a Personal Loan

• Don’t Apply for a Loan Before Reading This First

• Steer Clear of These Common Personal Loan Application Mistakes

Loan Requirements: Necessary Documents and More

• Consistent income

• Active chequing account

• Minimum age requirement for your province

• Valid Canadian address

• Canadian citizen or permanent resident

• Specific credit score requirements

• Social Insurance Number

• Proof of address

• Valid government-issued ID

• Proof of employment

• Recent bank statements

• Others if the lender specifies.

Although some lenders may have specific additional requirements, here are the essential documents and eligibility criteria that most lenders will request during the loan application process.

Loan-Related Cost

When you decide to apply for a loan, it’s essential to carefully consider all the costs involved. This includes not only the interest rate but also any additional fees that may arise. Unexpected charges, such as late payment fees or processing fees, can significantly affect your ability to repay the loan on time or even change the total amount you’re eligible to borrow. By accounting for these costs upfront, you can ensure that you’re fully prepared and avoid any surprises that could impact your financial situation.

Interest Rate: Every lender charges interest, which is the primary cost of borrowing. While interest rates differ from one lender to another, in Canada, the maximum rate allowed is 60%.

 Fees: The fees you may incur depend on the type of loan you’re applying for. Some of the most common fees include: Administration fee, Loan Origination fee, Brokerage fee, Non-suficient Funds fee, Late payment fee, and Early repayment fee.

Every loan will involve some form of fee, but if you're worried about a specific charge or believe a fee is excessive, be sure to thoroughly review and understand your loan agreement before signing.

Down payment: A down payment is the upfront amount you pay when buying a major asset such as a home or a vehicle. It’s usually a percentage of the total purchase price, so the amount you need to save will vary depending on the item you’re buying.

Monthly Payments: Most loans are repaid in regular installments throughout the loan term. Generally, you can choose between monthly, weekly, or bi-weekly payment schedules. Depending on your income schedule and budget, select the option that suits you best. However, keep in mind that not all lenders may offer every payment option.

Total Repayment Cost: Even if the monthly payments are manageable or the interest rate appears affordable, it’s important to consider the total cost of the loan by the end of the term. Most lenders will outline the full repayment amount. It’s a good practice to ask yourself if the overall cost is worth the loan before committing.

Where Should You Get Your Loan From?

Choosing the right lender can feel overwhelming, but once you familiarize yourself with your options, you’ll be able to easily select the one that best suits your specific needs.

Details

Bank or Credit Union:

Often the most common option, a bank or credit union is ideal for those with strong credit. These institutions usually have more rigorous approval processes and expect borrowers to meet higher eligibility criteria.

Private Lender:

A private lender is an individual or business that offers loans outside of traditional financial institutions. Since private lenders have fewer restrictions, they can work with a wider range of borrowers. If you have less-than-ideal credit or have faced financial challenges in the past, a private lender might be a suitable choice for you.

Loan Broker:

Brokers work with a variety of lenders and can assist you in finding the best loan options and rates. A key advantage of using a broker is that you only need to apply once, and they handle the rest. This saves you time and ensures you get the most suitable options for your needs.

Online Lender:

An online lender directly works with borrowers to help them secure the loans they need. The process usually starts with completing a simple and quick online application. Once approved, the funds are directly deposited into the borrower’s bank account. Online lenders can approve more borrowers because they don’t adhere to the same strict requirements as traditional banks or credit unions. This makes online lenders a great choice for individuals who have faced financial difficulties, are receiving Employment Insurance, or have less-than-perfect credit.

Payday Loan Lender:

If you're considering a payday loan, we recommend exploring all other options beforehand. Although payday loans might seem appealing due to their simple application process and fast approval, they often lead to significant financial challenges in the long run

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Keep in mind: When you apply for a loan online with us, your application is automatically matched with our full network of lenders, ensuring you receive the best options available by the end of the process. Apply today to save both time and money.

How to Pay Off Your Loan

After receiving your funds, the next step is to begin your repayment plan. Your payment schedule is already determined, so you’ll know exactly what to expect as you pay off your loan.

However, it’s crucial to ensure that you can comfortably make all your payments on time as planned.

Automatic Payments: Many lenders prefer or require loan payments to be automatically deducted from your bank account. This convenient option eliminates the need to manually submit payments, helping you avoid the risk of forgetting one. However, it's crucial to ensure that your account always has enough funds to cover the payment. If your payment fails due to insufficient funds, both your lender and your bank may impose non-sufficient funds fees.

Communication: If you anticipate not having enough funds in your account for a payment, it’s important to contact your lender before the scheduled withdrawal. Most lenders will be willing to work with you and reschedule the payment. However, if you fail to reach out, they may be less inclined to assist after the payment is declined.

Prepayment: While making timely payments will keep you on track, you may also have the option to pay off your loan earlier than planned. Some lenders offer the flexibility to make a lump-sum payment to reduce your balance more quickly. You might also consider discussing with your lender the possibility of paying off the entire loan balance. However, keep in mind that depending on how the interest is calculated, this may not necessarily save you money.

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Securing approval for a loan, no matter your credit history or financial background, has never been easier. With more options, lenders, and application methods available, the process is more accessible than ever. However, despite these advancements, it’s crucial to stay vigilant against scams and fraudulent lenders that pose a risk to our financial security.

Loan Safety

Upfront Payment Loan Scams

The most prevalent loan scam affecting Canadian consumers today is the upfront payment or loan insurance scam. In this scheme, a fraudster posing as a legitimate lender, or even as an employee of a well-known financial institution, contacts a consumer to inform them that they’ve been approved for a loan. However, the catch is that the consumer is told they must make an upfront payment, often described as "loan insurance," before the loan funds can be transferred to their account. This payment is usually requested through gift cards (like Steam, Amazon, Visa, etc.) or even through direct access to the victim's online banking.

No genuine lender will ever ask for an upfront payment of any kind. If you are asked to pay in advance, it’s a clear sign of a scam. Once the fraudster receives your money, they will disappear, and you will likely never hear from them again. Additionally, it's nearly impossible to track down these scammers, and the chances of recovering your money are extremely low.

Legitimate Lender vs Scammer

Legitimate Lender

Scammer

Requires time to assess eligibility and go over your application

Promises guaranteed approval

Asks for bank statements

Asks for access to online banking

Does not ask for any form of upfront payment

Asks for upfront payment in the form of loan insurance

Provides you with loan offer and contract to go over, answers

any questions you have

Bullies you into accepting an offer

Has a legitimate business email address

Has a Gmail (for another email provider) email address

How to Protect Yourself From Loan Scams

Securing approval for a loan, no matter your credit history or financial background, has never been easier. With more options, lenders, and application methods available, the process is more accessible than ever. However, despite these advancements, it’s crucial to stay vigilant against scams and fraudulent lenders that pose a risk to our financial security.

• Before you apply for a loan on any site, make sure that the site has all of the following:

  • Educational information in the form of blog posts, videos, tools, etc.

  • Detailed information about the loans and services they offer

  • A physical address

• Look for online reviews for any lender you want to apply with

• Keep track of the lenders you apply with, staying organized will help prevent any confusion if you’re contacted by a company you don’t know

• Do not accept any unsolicited loan offers, even if you were thinking about applying for a loan in the near future

• Don’t provide personal information over the phone that you already provided in the loan application

Frequent Question Answer

Can you get a loan with bad credit?

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Yes, Canadians with bad credit can still qualify for a loan. Unsecured bad credit loans may be paired with higher interest rates, but consumers can still opt for a secured loan such as a car title loan to gain access to lower rates.

Can I apply for a loan with my Canada Child Tax Benefit?

If you’re a parent and receive the Canada Child Tax Benefit, it’s considered a type of income. This means you can use it as a means to qualify for a loan. However, you’ll need to find a lender that accepts this type of income. You will likely need to work with an alternative lender.

Will applying for a loan hurt my credit score?

If the lender performs a hard pull of your credit, yes your credit score will go down a few points. But it will recover over time. The most important thing is to make sure you don’t have too many hard pulls within a short period of time. Click here to learn more about having your credit checked.

Why was my loan application rejected?

There are a variety of reasons why your application may have been rejected. For a detailed look at these reasons, check out this article. Fortunately, there are also a variety of ways to improve your chances of approval, including getting a cosigner.

Can I pay off my loan early?

Yes, some lenders will allow you to settle your account early. Just keep in mind that you may be charged a prepayment penalty, which is typically a percentage of your remaining loan balance. Before you sign a loan contract make sure you understand the terms of your loan.

What happens if I miss a payment?

Missing a loan payment will affect your finances in two ways. A missed payment will be reported to the credit bureaus and negatively impact your credit score. And your lender could potentially charge you a late fee. If you know you won’t be able to make a loan payment on time, make sure you speak with your lender.

What is the difference between a secured and an unsecured loan?

A secured loan is backed by some form of collateral, typically an asset like a vehicle or piece of property. If a borrower defaults on a secured loan, the asset could be seized. An unsecured loan does not require collateral. The heightened risk of an unsecured loan may result in a higher interest rate, although this is usually a function of the applicant’s credit history.

How to tell if a lender is legitimate?

Choosing a legitimate lender can seem like a daunting task, but there are a few key factors to watch out for. For example, a legitimate lender will never ask for any form of upfront payment and should have many independent reviews you can look at online. For a more detailed look at finding a legitimate lender, click here. To find reviews about your lender, click here.

Can I transfer my loan to someone else?

Certain loans, for example, a car loan, can be transferred to someone else. But, a personal loan cannot be transferred.

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