A personal installment loan is a financial tool qualified Canadians can access when they need extra money. It typically offers a higher limit than a credit card and an unsecured installment loan does not require collateral such as a home or vehicle to back it.

How Does a Personal Installment Loan Work?

A personal installment loan is issued for a fixed amount and repaid over a chosen time period through a specific number of payments (installments). Each payment includes a portion that goes towards the original loan amount and another portion that pays interest.

Lenders usually offer a range of loan amounts which can span $500 and up. However, if you want to use a specific lender and need more than the maximum or less than the minimum, you will need to find a different lender or another financial product to fulfill your needs.

The main variables of a personal installment loan are the amount you borrow, the interest rate, the frequency of your payments, and the length of time for repayment (term). Once you’ve been approved for your personal installment loan these become fixed throughout the term of the loan.

However, many lenders only mention other important factors in the fine print of your loan agreement. Regrettably, some of these factors can negatively affect your loan so it important to choose your lender carefully.

Additional Fees

Many lenders charge fees beyond the interest they charge for borrowing. For instance, some charge loan origination fees just for opening up an account.

Some lenders also charge fees to process your application. Others penalize you if you want to pay off your loan early or if you want to make extra payments. While this may seem counterintuitive since you’d think they’d want their money sooner, they actually depend on the interest they charge you monthly. Unfortunately, if they do charge a penalty for early repayment it often negates the benefits. They want to recoup as much future interest as possible.

Some lenders also ask for loan insurance upfront that will repay the loan in the event of job loss, critical illness, accident or death. However, this is an optional coverage and you do not have to take this insurance to be approved for a loan.

Advantages of a Personal Installment Loan

A personal installment loan offers flexibility. You can use it to pay for home renovations, consolidate debt, pay down a loan with a high interest rate, or buy or repair a car. You choose the personal installment loan amount and the length of time that best matches your budget and ability to repay.

Your payment remains the same throughout the loan term making it easy to predict your expenses. Plus, you will know precisely when you will pay off your debt if you stick to your regular payments. If you choose a personal installment loan with the shortest repayment term you can afford, you could be debt-free quicker than you thought possible.

A personal installment loan often offers a lower interest rate than revolving credit options such as credit cards. If your lender allows extra payment or early repayment, you could reduce the amount of interest you pay even more.

However, it is important to understand that a personal loan is not like a credit card and you can’t continue to increase the amount. If you discover you need more money later, you will need to pay off your existing loan and take out another. Unlike a credit card, you will need to consider your financial position instead of impulsively racking up more debt.

You can also use a personal installment loan to improve your credit score. Regular, timely payments are a good indicator to lenders that you are a responsible borrower. A good credit repayment history makes up 35% of your overall credit score and increasing your mix of credit products also strengthens it by as much as 10%.

Finally, a personal installment loan is convenient as it makes it possible to keep cash on-hand when you make a large purchase, instead of draining your savings account or emergency fund.

Application Process for a Personal Installment Loan

The application process between lenders varies greatly. Big banks have the most exacting requirements and usually want you to collect many documents, visit their office, fill out their forms, and wait a considerable time for approval. Unfortunately, even if you’re a dedicated customer and you’ve jumped through all the hoops they may still turn you down. However, this doesn’t mean you can’t get a personal installment loan. Many lenders exist and many make it much easier to apply.

Online personal installment loans are common today making it simple to apply at any time from any device anywhere. Plus, lenders have their own loan criteria, which may not be as stringent as the banks.

Approval Process for a Personal Installment Loan

As mentioned, borrowers have many options and each lender has their own criteria and approval method. Some online personal installment loan lenders only require a solid three-month employment history and don’t put as much emphasis on your credit score. Consequently, even people with less than stellar credit can often obtain a personal installment loan.

The great thing about an online application is that lenders normally offer a calculator so you can easily choose a comfortable payment amount. Once you’ve decided on a loan and payment amount and apply, you usually don’t have to wait long to find out if you’re approved either. The lender notifies you quickly and also offers the terms. If you don’t like what you see you can apply elsewhere. If you like what they’ve offered they also make it easy to move forward.

How Long Until I Receive Funds?

If you agree with the terms the lender offers you may be tempted to accept straightaway. However, the length of time until you receive your funds can vary greatly between lenders.

Some take weeks, others days and a select few may have the money in your bank account within 24 hours if you apply on a business day. Check the lender’s policies before you accept if you are in need of your loan funds quickly.

The FlexMoney Advantage

All lenders have minimum requirements for loan approvals. However, some are less exacting. For instance, FlexMoney requires active work at the same employer for at least three months with a minimum income of $2,000 per month. You also need a cellphone to verify your identity.

No Minimum Credit Score

FlexMoney differs from many other lenders as it does not require a minimum credit score. Your credit score is only one factor used to determine whether you qualify for a personal installment loan.

Artificial Intelligence Evaluation

Instead of relying solely on your credit file, FlexMoney uses an artificial intelligence scoring system which allows them to make a fully-informed decision.

This “smart” system may overlook past indiscretions such as a report of insufficient funds on your credit file if other aspects of your application and credit history show promise. However, the system will not approve your application if you have a bankruptcy on your credit file within the past seven years.

Finally, the system compares what you earn to what you owe. Generally, it looks for a debt-to-income ratio (DTI) of 40 percent or less. Once again, the system accesses overall risk, so no one negative factor necessarily means they will refuse you credit.

No Hidden Fees or Penalties

FlexMoney does not charge an origination fee and welcomes additional payments or full payment at any time without penalty. They offer total transparency and excellent customer service. Your monthly payment amount is all you will pay throughout the loan term and if you have questions, just ask.

Competitive Interest Rates

FlexMoney offers highly competitive rates. Your interest rate for your personal installment loan will depend on the information provided in your application and other factors. If you have a solid source of income and provide accurate information, your chances of a decent rate are good.

Each application is reviewed case-by-case with the outcome determined by the system and your data. If you don’t like the interest rate offered you are under no obligation.

How Long Until You Receive Your Money?

Your online personal loan funds can usually be in your bank account within 24 hours of approval if you borrow from FlexMoney.

We lend throughout Canada and offer telephone, email, and online support if you need it. However, the process is simple and straightforward. There’s no paperwork, no waiting in line, and we do not ask for financial statements.

What Can You Do To Ensure You Qualify for a Personal Installment Loan?

Applicants should take their time when they complete their online personal loan application. One of the most common reasons for a declined application is incomplete information. Inaccurate information also leads to rejection.

What If You Don’t Qualify?

No reputable lender can promise 100% approval. If you do not qualify with FlexMoney, you will need to re-examine your financial situation. You may need to reduce your debt to improve your credit score or find a secured loan with a co-signer.

Find Out More

If you’re interested in exploring an online personal loan through FlexMoney or you have more questions, please visit our website.