Loans, Credit and Debt
The majority of Canadians have at least one loan,
and in fact most of them have many loans. Credit and
debt have become a way of life, and saving is no longer in vogue.
This of course is unsustainable and resulted in the severe financial crisis we are in now.
Loans come in many forms, depending on the purpose of borrowing. For example a business in need of capital
would apply for business loan,
while a student can take advantage of Canada Student Loans Program to finance
their education. Debt consolidation loans are a great solution for persons or businesses with several loans
with high interest rate, allowing them to consolidate their debt and do refinancing at lower interest rates.
Equity Loans (home equity loans) can be obtained using your home equity as collateral for a large sum loan
(think of this as a second mortgage). A home equity line of credit (HELOC) is a special kind of credit line
tapping the existing equity in your home. Home owners trading up, might need a bridge financing, while arranging
for permanent one. In certain cases, borrowers might want to consider getting interest only loan.
A loan can be a secured loan (car loan for example) or unsecured loan (personal credit line for example).
If you want to get a loan, then you can use various loan calculators to determine your monthly payments,
by entering the loan interest, amount, and the amortization period. Another thing you can do is pull a copy
of your credit report, to make sure that the information there is correct and it won’t affect your ability
to get a loan. If you have less than stellar credit, it’s likely that mainstream lenders won’t be willing
to give you a loan, and in this case you can apply for the so-called bad credit loans from one of the
Canadian subprime lenders. If debt is overwhelming you can take advantage of credit counseling services
available to borrowers in trouble.
Credit Cards are very popular credit instruments. Choosing a credit card is not always easy with so many choices
available on the market. Before applying for a credit card make sure that, you have read and understood the
credit card terms (check our Credit Card Tips article for more info). Be careful if you see an advertisement
for a no-interest credit card (believe me there’s always a catch). If you have bad credit or no credit history
you can apply for a secured credit card, from one of the Canadian banks. Learn what is a prepaid credit card
(it’s not a credit card really) and if you are a heavy credit card borrower, learn how to get rid of credit card debt.
Payday loans have always been a controversial subject, and while the general opinion is that they are bad for consumers,
there’s no denying that some people need them. Payday lenders make it really easy for borrowers to get a small loan,
and many lenders offer payday loans online. To be able to decide for yourself if payday loans are good or bad, read
what is a payday loan, how does a payday loan work,
and what’s payday loans ultimate cost.
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