The best online personal loans in Canada should deliver what you need quickly and efficiently. Nonetheless, there’s a huge number of lenders and countless products available. The question is, “How do you choose?”
Fortunately, you can narrow the field by considering the following factors. You’ll quickly discover many loans and lenders are meant for you.
Do You Meet Their Credit Score Requirement?
Most lenders have a credit score requirement. Generally, they want to see a “good” credit rating. Equifax suggests you need a score of between 670 and 739 points.
If you don’t know your credit score, you can obtain it for free through several third-party apps such as Borrowell, Mogo, or Credit Karma. Both credit reporting agencies, Equifax and Transunion, provide ways to obtain your credit score for a fee.
However, you may not want to bother with all that. The best online personal loans in Canada do not have a minimum credit score requirement. Some lenders use their own assessment process which considers many factors, not just your credit score.
How Will They Check Your Credit?
It is standard practice for lenders to check your credit. That’s understandable, since they’re considering granting you a loan.
However, how they check your credit is extremely important. They can choose either a “hard” or “soft” credit inquiry.
A hard credit inquiry lowers your credit score by as much as 5 points. It also stays on your credit file for up to three years, even if they turn you down for a loan.
A soft credit inquiry does not lower your credit score. While it does stay on your credit file, lenders don’t give it much consideration. Often times, soft credit inquiries are used during a pre-approval process when the borrower is shopping around for the best deal.
The best online personal loans in Canada always use a soft credit inquiry and the pre-approval process. Pre-approval isn’t an obligation to borrow, but allows you to see what the lender’s offering, without damaging your credit score.
How Important is Stability?
Lenders love to see an applicant with a long work, banking, and residence history. They believe stability means you are more likely to repay your loan.
Unfortunately, this isn’t a fair way to judge an applicant. After all, why should it matter where you lived, worked, or banked many years ago? Sometimes you need to change things up and you shouldn’t be penalized for doing so.
Fortunately, the best online personal loans in Canada have very short stability requirements. If you can demonstrate you’ve earned income from the same source for at least three months, that’s enough to qualify.
Do You Need to Provide Proof of Income?
Regrettably, many online lenders still operate in the Dark Ages. They want you to upload written documents to verify your income. This might be recent pay stubs, a letter from your employer, or even an income statement.
Luckily, the best online personal loans in Canada provide electronic income verification through bank statements. If you’re paid regularly by direct deposit, a quick and easy encrypted verification is possible within minutes. The best part is that you don’t need to do anything.
Do They Have a Minimum Income Requirement?
This is where things can sticky with many lenders. They’ll ask you to fill out an application form without telling you what they expect from you. Some may not tell you because they want to see a high amount.
Obviously, this is a waste of time if you don’t meet their income requirement. Fortunately, the best online personal loans in Canada tell you upfront what they need from you. Their minimum income requirements are often very reasonable and they may even consider applications from sources other than a regular job.
What Fees Do They Charge?
Often times there is a huge trade-off when you choose certain online lenders. They may offer a quick loan process, but they’ll also charge you unnecessary fees.
For instance, many lenders make it seem that an origination fee is normal in the lending market. This is just a fancy name for an administrative fee to set up your account and it can be substantial (between 0.5 and 8% of the loan amount).
Additionally, some lenders penalize you if you want to pay extra payments or pay your loan off before your loan end date. Once again, prepayment penalties aren’t an industry standard and you shouldn’t pay them.
Fortunately, the best online personal loans in Canada do not include these fees. The cost of setting up an account should be borne by the lender, not you. You should also be able to pay extra at any time, without penalty.
What Amount Can You Borrow?
Obviously, you’ll want to choose a lender that offers at least the amount you want to borrow. However, this may not be as easy as you might think.
Some lenders do not offer loans under $1,000. Others don’t offer loans over $5,000. Clearly, it doesn’t make sense to borrow $1,000 if you only need $500. Equally, what’s the point of applying for a loan for a few thousand dollars, when you really need $15,000.
The best online personal loans in Canada offer a wide range of borrowing options. After all, it is always best to find a good lender and stick with them. It can improve your chances of better terms if you decide to borrow through them again later.
How Long Do You Have to Repay?
Once again, flexibility is vital. You may want a short repayment term if you’d like to clear your debt quickly. However, the minimum term for many lenders is one year.
Alternatively, you may want the option of lower payments and more time to repay. However, the longest term many lenders offer is a few years.
Luckily, the best online personal loans in Canada offer terms as short as six-months and as long as five years. This makes it very easy to find one that suits your short and long-term financial goals.
Do They Offer Digital Document Signing?
Many lenders promote online personal loans, but part of their lending process still occurs in-person. Most commonly, they will have you complete an online application and then ask you to contact a loans officer or visit a brick-and-mortar office to sign your loan contract.
Fortunately, the best online personal loans in Canada do not have this requirement. Instead, they send your loan documents via email and you sign them electronically. This simplifies and speeds up the loan process.
How Much Time Before They Release Funds?
Just because you’ve signed your loan contract, it doesn’t mean the lender will release loan funds quickly. In reality, some lenders take days or even a week before they send money to you.
Luckily, the best online personal loans in Canada can have money in your bank account within 24 hours after you sign. If you sign during business hours, it could be even quicker.
What Customer Service Options Do They Offer?
The problem with many online lenders is that rely heavily on email. While this may be fine in most cases, it certainly isn’t if you have an urgent question or concern.
Fortunately, the best online personal loans in Canada offer multiple customer service options. If email isn’t quick enough, you can contact them via a toll-free number during regular business hours. They should also offer an in-depth FAQ section on their website as well as website support tickets that can’t be ignored.
The Best Online Personal Loans in Canada Through FlexMoney
If you’re considering an online personal loan, FlexMoney can help. Here is what we need from you, followed by what we offer:
Our Basic Requirements
- Canadian citizen
- At least 20 years of age
- Steady income from the same source for at least three months
- Minimum monthly net income of $2,000
- Active cellphone number and email address
- Open and active bank account with a Canadian financial institution with at least three months of transaction and banking history
Sorry, we can’t help those whose income source is Employment Insurance, the Disability Tax Credit, or government benefits related to COVID-19. Please don’t apply if you if you are currently enrolled in an active bankruptcy, consumer proposal, or credit counselling program either.
Why Choose FlexMoney?
- No minimum credit score requirement
- Pre-approval process – no obligation
- Soft credit inquiry
- Three-month’s stability
- Digital income verification
- No origination fee or prepayment penalties
- Wide range of loan amounts and repayment terms
- Digital document signing
- Decision within minutes
- Funds release within 24 hours, or less, if loan contract signed during business hours
- 100% Canadian company with Canadian customer service representatives
- Licensed lender in Ontario, British Columbia, Alberta, Nova Scotia, Saskatchewan, Newfoundland & Labrador, Prince Edward Island, and Yukon Territory
- Member of the Canadian Consumer Finance Association (CCFA) which represents the majority of Canada’s regulated providers installment loan lenders
Find Out More
If you’d like to start the application process or have more questions, please visit our website. You can also find more information on how our loans work here. We offer the best personal loans online and the process is simple and fast.