Find Low Rate Personal Loans There are loans provided for personal use and establishing consumer credit. The interest rate and terms are based on the borrower’s integrity and creditworthiness, and the financing is usually unsecured, i.e. it is not secured against some valuable asset. There are secured personal loans as well, which involve the attachment of collateral. You risk losing your car, home, or another asset should you default on payments. These types of financing are offered by credit unions, banks, financial companies, and other establishments. They are made for household, family, and personal use and are different from long-term mortgage and business loans. They usually cover personal medical expenses, holiday and travel and marriage expenses. Before you apply for a personal loan or financing anywhere in Canada, you should know that the repayment period is usually short while the interest rate is high. Financial institutions are often willing to offer a more advantageous interest rate, lower fees, and better repayment term if you offer collateral. Regardless of what you want to apply for, you should assess your financial situation. List your monthly income and assets and deduct all expenses, debts, and liabilities. Ask your employer for a letter that confirms your job security and monthly income. Together with this letter, you should present your pay stubs or invoice statements in case your salary is deposited into your checking account. Your employment information will be used to determine your debt-to-income ratio as well. Your existing obligations will be combined with the new conditions and calculated against your income. This will help the lender to verify your ability to repay it. In addition, you will be asked to present your social insurance number, driver’s license, and other personal information. The lender will use it to run a credit check. Most banks are willing to offer financing to applicants with a credit score of 660 or higher. Banks and other mainstream lenders in Canada are pretty rigid when it comes to credit requirements. Your application may be rejected even if your score is 1 or 2 points below the required minimum. In addition to these, the lenders in Ontario, British Columbia or anywhere in Canada may want to look at your tax information and bank statements. Your tax information will enable the financial institution to check your employment history. It serves as proof that you are able to repay your dues and your taxes. The bank may look at your bank activity over the last few months to check whether you are making regular payments on your loans and credit cards. They may check for any overdraft activity to make sure you are not writing cheques before payday. Now that you are familiar with the requirements, you can go to your regular bank first. If you don’t meet the lending criteria, do some shopping. There are many financial institutions that specialize in personal secured and unsecured loans. You may want to compare the repayment terms and interest rates different banks offer. Check whether the interest rate is variable or fixed and inquire about any upfront fees, prepayment fees, and other charges. Ask whether the financing is disbursed in monthly installments or all at once. Offer a collateral if you want to obtain a more advantageous interest rate. Even if you have a very good or excellent credit score, the bank will offer a higher interest rate than on a secured type of personal loan. Fill out all application materials and submit them, along with the supporting documentation. Make sure you list your income, liabilities, and assets. Once you have obtained a personal loan, you should repay it, sticking to the terms of your agreement. Failure to make payments on an unsecured financing will have a negative impact on your credit score.