A Canadian personal loan is a great financial product that can be used in many ways. However, you may not understand what can be involved in the loan process. Additionally, unless they understand how they work, it can be difficult to differentiate a good Canadian personal loan from an inferior one. Finally, you may underestimate the impact of choosing a poor lender over a good one.

As a result, we’re looking at the differences and limitations of a Canadian personal loan through traditional and alternative lenders. We’ll also examine how difficult or easy the process can be for applicants. Lastly, we’ll highlight some of the most important issues that separate good lenders and good loans from less desirable ones. We also want you to recognize common myths from the facts.

Lending Criteria

Expectations

Most Canadians want to know whether they’ll meet a lender’s qualification requirements before they bother with an application. What’s the sense of wasting valuable time if you haven’t got any hope of approval?

FlexMoney believes this is a reasonable expectation. As a result, here’s our lending criteria:

  • Canadian citizen at least 20 years old
  • Steady source of income from the same source for at least three months
  • Minimum monthly net income of $2,000
  • Have a mobile phone number, email address, and active Canadian bank account with at least three months of transaction and banking history.

Reality

FlexMoney is an exception to the rule when it comes to revealing lending criteria beforehand. Check the big banks or credit unions. Do they tell what you need to qualify? Or do you need to complete an application form, but follow it up with agent or branch finalization?

We think this approach doesn’t serve customers well. You invest your time, energy, and personal information before you can even consider whether it’s worth it.

Application Complexity

Expectations

We believe Canadians want a quick and simple loan process. It makes sense, since we all lead busy lives. Office or branch appointments, complicated application forms, and collecting a load of documents isn’t simple or easy. It’s also completely unnecessary, since we live in a digital age.

Reality

Mainstream lenders are stuck in the past. Even though some offer an online application form, it’s almost impossible to conduct the entire Canadian personal loan process online.

Additionally, they usually delve very deeply into your home, employment, and work stability, sometimes for as long as five years. FlexMoney approaches the Canadian personal loan process much differently.

Your Canadian personal loan is handled completely online. Apply at your convenience from any device at any time. Our application form is straightforward and simple and we’re only interested in your work, home, and banking stability for the past three-months.

Proof of Income

Expectations

Do you wonder why the onus is one you to prove how much you earn when you apply for a Canadian personal loan? It seems an outdated practice in this day and age. Nonetheless, this is what you usually face when you apply through a traditional lender.

Reality

Mainstream lenders expect you to jump through many hoops if you want to qualify for a Canadian personal loan. As a result, most people find it necessary to supply proof of income when they apply. Acceptable proof might be old pay stubs, a letter from your employer, or an accountant’s income statement. Whichever it is, it causes you inconvenience.

FlexMoney has a better way. We confirm your income electronically through bank statements. We do the work, not you.

Credit Score

Expectations

Most Canadians understand the importance of credit. However, they also want lenders to be reasonable. For instance, if they have a small indiscretion on their credit file, they probably wouldn’t expect it to be grounds for denial.

Reality

Regrettably, when you apply through a mainstream lender, your credit score is often the most important consideration. According to Equifax, “lenders generally see those with credit scores of 660 and up as acceptable borrowers”. This means many people can’t qualify for a traditional Canadian personal loan.

Fortunately, FlexMoney does not have a minimum credit score requirement. Instead, we use an artificial intelligence assessment. It considers many factors for a well-rounded financial overview. If you have a steady income and reasonable credit, you could qualify.

Credit Inquiry Method

Expectations

Most Canadians probably think that it doesn’t matter which lender they choose, since they all check your credit. Plus, it’s a natural assumption that simply applying for a loan shouldn’t negatively impact your credit score. After all, it’s only an application, not an actual loan.

Reality

It does matter which lender you choose, because many traditional lenders use a “hard” credit inquiry. This provides them with in-depth information from your credit file. However, this hard credit inquiry also negatively impacts your credit score. It also stays on your credit file for years, even if you don’t get the loan.

Conversely, FlexMoney uses a “soft” inquiry. This provides us with a general overview of your financial position. It does not lower your credit score.

Loan Limits

Expectations

Most Canadians realize that lenders decide on how much or how little they’ll offer as a Canadian personal loan. However, they also assume they should be able to easily find a loan that suits their needs.

Reality

Many lenders don’t bother with small loans. They believe credit cards or a line of credit can fulfill this need. Others only offer the highest loan amounts to those with excellent. Of course, this creates problems as it excludes many Canadians.

Not everyone has access to credit cards or a line of credit. Even if they do, they may not want to pay compound interest charges. Plus, maximum loan amounts shouldn’t be restricted to those with excellent credit.

Fortunately, FlexMoney offers loans between $500 and $15,000. You won’t pay compound interest and you don’t need perfect credit.

Payment Frequency Options

Expectations

Canadians want loan options that align with their lifestyle. For instance, it makes sense to align your payment date with your pay days. A lender should accommodate your needs so it’s convenient for you, not them.

Reality

Traditional lenders still don’t accommodate their customers as much as they should. You may be able to make weekly payments, but monthly is still the norm.

Luckily, FlexMoney offers many more payment options. Choose from weekly, bi-weekly, bi-monthly (15th and end of month), and monthly. We make it easier for you to manage your Canadian personal loan.

Repayment Terms

Expectations

One of the primary reasons many people choose a personal loan is flexibility. You borrow a lump sum and then choose how long you want to take to repay. Consequently, most Canadians expect to be able to choose between a range of terms, from months to years.

Reality

Generally, the minimum term through a traditional lender is one-year. This could present a problem if you don’t want to spread your payments out that long. For instance, you may want to spruce up your house before you sell.

Fortunately, FlexMoney’s minimum term is 6 months. If you want more affordable payments, take up to 5 years to repay.

Cost to Borrow

Expectations

Many people automatically assume that they will get the best interest rate and pay less fees if they borrow through their own financial institution. After all, you’re a loyal customer and they’ll probably treat you right.

Reality

Those low interest rates posted on your bank’s website or branch window are reserved for their very best customers. If you don’t fall under this category, you’ll pay more. Plus, there’s certainly no guarantee of approval after you invest considerable time in their application process.

Consequently, it doesn’t make sense to discount alternative lenders or what they have to offer. FlexMoney uses a pre-approval process and offers highly-competitive interest rates. Since the entire process is quick and simple, compare us to what you’ve been offered elsewhere.

Fees & Penalties

Expectations

You’re the customer and you’ll be paying interest on your loan. As a result, it’s a reasonable assumption that you shouldn’t pay additional fees.

Reality

Many lenders levy an origination fee just for setting up your loan account. It ranges between 0.5% – 8.0% of your total loan cost and comes straight off your loan funds. Others penalize you if you want to pay off your loan early or if you want to accelerate your payments.

Happily, FlexMoney does not think it is ethical to charge either. Account setup is part of our administrative costs and we think it’s great when you can pay your loan off sooner.

Decision Timeline

Expectations

After you’ve collected everything the lender needs, most people want to know whether they’re approved quite quickly. It should just be a matter of verifying information.

Reality

Regrettably, if you apply through a mainstream lender, you could still find yourself twiddling your thumbs for some time. Your loan officer must pull your credit file, verify your income, and check everything else on your application form. If you’re at the bottom of their inbox, it could take days. And they could still turn you down.

Conversely, FlexMoney gives you a decision within minutes. If you’re pre-approved, you’ll see our interest rate immediately.

Funds Release Timeline

Expectations

So, the lender let you know that you’re approved. Congratulations! Now that all the paperwork is over, it’s natural that you’d expect to get your funds immediately.

Reality

Even if you’re approved through a traditional lender, you will probably wait for your loan funds. They’re not highly-automated and the wheels turn slowly.

Luckily, you can expect your Canadian personal loan funds in your bank account within 24 hours if you choose FlexMoney.

Customer Service

Expectations

It’s not unusual that you might have questions when you’re considering a Canadian personal loan. After all, there’s a lot involved and you want to make an informed decision. Consequently, you’d expect that the loans officer would be available to you to answer your questions.

Reality

Your brick-and-mortar loans officer probably deals with many clients. You’ll need to call and leave a message or email knowing you’ll wait for a reply. Unfortunately, that doesn’t help you much if you need to talk to someone straightaway.

Fortunately, FlexMoney offers a toll-free number during regular business hours. We have many Canadian customer service representatives able to answer your questions.

FlexMoney Canadian Installment Loan

In most cases, you’ll find that a Canadian personal loan through FlexMoney can help you avoid the pitfalls mentioned above.

If you’d like to start the loan process or need more information, please visit our website or contact us. We also offer an in-depth Help section that answers commonly asked questions.

FlexMoney offers a smarter, faster, and more efficient way to get a Canadian personal loan when you need one. Get started now!