Perhaps Canadian online personal loans are a great solution for financial needs, because they are so flexible. However, lenders vary and you may discover some lenders won’t grant you a loan.
Luckily, you have options. Some lenders don’t have stringent requirements, making it more likely you can qualify. Here are some of the factors you should look for if you want a fast, easy process.
No Minimum Credit Score Requirement
Many lenders will only consider your application if you meet a minimum credit score requirement. This requirement varies between lenders, but generally they want to see at least “good” credit.
According to Equifax, credit scored of between 660 to 724 are considered good. Transunion, Canada’s second credit reporting agency considers a score of between 720 and 780 good.
So, what happens if you can’t meet this requirement? That’s easy – choose a lender that doesn’t have a minimum credit score requirement.
A select group of lenders offer Canadian online personal loans that rely on an artificial intelligence assessment instead. This assessment considers many factors, but especially your income and debts. They place less emphasis on credit and more on your ability to repay. Consequently, if earn a steady income and have a reasonable debt loan, you definitely have a chance of qualifying for one of their Canadian online personal loans.
Pre-Approval Process Using Soft Credit Check
Even though good lenders may use an artificial intelligence assessment, they will still check your credit. This is a standard practice when you apply for almost all loans. However, how they check your credit can impact you greatly.
If you choose a lender that uses a pre-approval process, they should use a “soft” credit inquiry. It is commonly used for financial products as it provides the lender with a broad overview of your financial situation. When you’re granted pre-approval, the lender reveals your interest rate and you decide whether you want to borrow.
Since soft credit inquiries are used so often when people are shopping for credit products, they carry little weight. They do appear on your credit file, but they don’t affect your credit score. However, a “hard” inquiry does.
Every hard credit check negatively impacts your credit score by between 3 and 12 points. While lenders and the credit bureaus are quick to point out this reduction is temporary, it can remain on your credit file for up to 3 years. Plus, multiple hard inquiries can send up a red flag to lenders as it suggests you’re struggling to acquire credit.
As a result, always choose a lender that uses the pre-approval process and a soft credit inquiry. If you don’t like what the lender offers you it’s not a problem. You can continue shopping without worrying about lowering your credit score.
No Proof of Income Required
Let’s face it, who has the time to dig up old pay stubs or to get a letter from their employer to prove how much they’re making? If you’re self-employed, but earn a steady income, you may need to obtain a statement of income from your accountant, which is even more irritating and costly too.
Even if you happen to jump through all these hoops and upload or drop off these documents, there’s no guarantee you’ll qualify for one of the lender’s Canadian online personal loans. You could easily waste all that time and effort.
Fortunately, this isn’t necessary when you apply for Canadian online personal loans through a good lender. Instead, they verify your steady income electronically through authorized bank statements. They can’t see any other banking details, just your direct deposit payments.
Obviously, this process is much speedier than handling physical documents. Plus, you don’t need to do a thing – the lender handles it all.
Reasonable Minimum Income Requirement
Many lenders won’t tell you their income requirements. Instead, they expect you to fill out an application form and wait for their decision. Clearly, this makes little sense if you can’t possibly qualify for their Canadian online personal loans.
Additionally, many traditional lenders have high income requirements. This reduces their risk as borrowers have more money to use. Unfortunately, many people don’t earn high incomes.
Fortunately, a few good lenders make it much easier to obtain Canadian online personal loans. For the sake of this article, we’re providing you with FlexMoney’s basic requirements:
- Net minimum monthly income of $2,000 for at least the last three months (sorry, we can’t consider income from Employment Insurance, the Disability Tax Credit, or COVID-19 benefits)
- Active account with a Canadian financial institution with at least three months of transactions
- Canadian citizen who is at least 20 years of age
- Have a valid email address and mobile phone number
- Not involved in an active bankruptcy, consumer proposal, or credit counselling program.
No Long-Term Stability Requirement
Traditional lenders want to see a long history of stability. This includes where you’re lived, worked, and banked over many years. However, we live in a country where change happens often.
You may need to move for a new job. Perhaps you changed banks, because you wanted better service and products. You could move to a more convenient or less costly location. Nonetheless, many lenders penalize if you do so.
Luckily, good lenders place less emphasis on stability. As mentioned above, FlexMoney is only concerned with your history over the past three months. If stability could be a concern for you, our Canadian online personal loans may be your better choice.
Check Your Debt-to-Income Ratio
You need to be realistic when you apply for Canadian online personal loans. No lender will issue you a loan if you already carry too much debt.
Yes, you can use one of these loans to consolidate your bills into a single, easy-to-manage payment. Nonetheless, we suggest you do a few calculations before you apply to avoid disappointment.
Your debt-to-income ratio (DTI) measures how much you owe against how much you earn. Before you apply for any Canadian online personal loans, calculate your DTI here. If you are planning on using a loan to consolidate, be sure to include all your expenses.
A manageable DTI is between 37 and 40, but even less is better. There’s no use in trying to fool yourself. The credit bureaus show outstanding loans and credit cards. They may even show your cellphone plan and your rental payments. If your DTI is too high, pay down your debt or cut down on expenses. Otherwise, you can expect a loan application refusal.
Choose a Licensed Lender
Even though most Canadians regions require lender licenses, some companies ignore the law. Should you deal with an unlicensed lender you will forego any consumer protections afforded by regional and Canadian laws.
Government oversight is extremely important as it provides a way to deal with problems if you feel you’re treated unfairly. Additionally, licensing limits lender actions, including the fees and penalties they can charge and how they deal with your loan.
Finally, licensing ensures transparency. A licensed lender must reveal costs and can’t hide fees and penalties within their loan contracts. Two common costs lenders try to charge borrowers are an origination fee and pre-payment penalty. Neither of these are necessary.
Always choose a licensed lender for Canadian online personal loans. Make sure they don’t levy an origination fee for setting up your account. Also check they don’t charge you if you want to pay off your loan early, either through additional payments or a lump sum amount.
Canadian Online Personal Loans Through FlexMoney
We already provided you with our basic requirements for our Canadian online personal loans. However, we realize choosing a lender isn’t straightforward. Consequently, we are providing you with even more information on why you should choose us over the competition:
- Our process is 100% online – you never need to visit a brick-and-mortar office
- FlexMoney is a Canadian company – our customer service representatives live and work here
- We are a licensed lender in Ontario, British Columbia, Alberta, New Brunswick, Nova Scotia, and Newfoundland
- No minimum credit score requirement
- Electronic income verification – no proof of income required
- Minimum net monthly income of $2,000, paid by direct deposit – we consider regular employment, self-employment, and pension income
- Our artificial intelligence assessment considers many factors, not just your credit
- FlexMoney uses a pre-approval process and a soft inquiry that does not lower your credit score
- We grant loans of between $500 and $15,000
- Choose a repayment term that suits you of between 6 months and 5 years
- Short stability requirement of three-months
- Competitive interest rates
- Fast decision – find out whether you’re pre-approved within minutes
- Digital document signing – sign your loan contract electronically
- Quick funds release – money in your bank account within 24 hours, if you sign during business hours
- Toll-free number, chat, website, and email support as well as an in-depth website FAQ section
Find Out More
If you’re interested in starting the application process for one of our Canadian online personal loans, or if you have more questions, please visit our website. We make it simple to get cash now, without all the fuss.