As a student, you are likely to be constantly spending and not earning or earning less enough to sustain you. It’s obvious that your needs are constant and needs to be fixed quickly. If you run out of money for food, books or that next trip you intend to be part of, there is always a fast solution to your urgent financial needs. With technology coming of age, you can now rest assured that your financial needs are taken good care of. This is in light to the great relief that online installment loans have come in handy to help you solve your urgent financial needs. Here’s what you need to know about online installment loans as a student in Canada.
What are online installment loans Canada?
This is an installment loan that is offered by online lenders. It is a loan offered on short term agreement between the lender and the borrower. They allow you to choose repayment plans. The repayment duration is usually determined by the amount of money borrowed. Besides, a good lender can negotiate and agree on a favorable repayment duration. Getting an online installment loan with Friendly Lender, for example, is way too relieving. Yes, online installment loans Canada lender will often give you the luxury of scheduling your repayments.
This is meant to allow you as a student a good time to repay without being put under duress and without unnecessary pressure. That’s marvelous if you are in a dire financial fix, right?
How online installment loans work
As a borrower, you have the option to determine the installments on which to repay your loan. This implies that, as a Canadian student, you do not need to pay back your installment loan as a lump of cash all at one time. This makes it way far too easy to manage your financial needs with ease and also to strategize on the way to repay the loan on flexible terms.
It is important to understand the terms of the lender you want to consider borrowing from, as the terms of repayment differ from one lender to another. The good thing with installment loans is that they do not attract early pay off penalties. They also do not subject you to an arduous process of the online application, making them efficient and convenient
Types of installment loans available
As a student in Canada, you have access to two types of installment loans. These are: Secured installment loans and unsecured installment loans
Unsecured loans: This type of loan is quick to access. It does not require you to have an asset or collateral to give to the lender in order to secure the loan. This means that they are high-risk loans on the part of the lender, as they will have nothing to take in place of the loan in the event that you default. It is this factor that informs the higher interest rate charged on the loan.
The types of unsecured loans include a revolving loan and a term loan. A revolving loan has a credit limit that can be spent, repaid, and spent again. Student loans and credit card loans fall under this category.
For a term loan, both the borrower and the lender agree on terms of repayments which basically involves determining the equal installments in which to pay the loan.
Secured loans: In order to access this type of loan, you will need collateral or an asset for security, which the lender will keep in exchange for processing your loan. That, therefore, informs the lower interest rate, as the lender’s risk of losing his or her money is significantly reduced.
Credit check to offer installment loans
Any lender may want to trust the people to whom they are giving out loans. As such, online installment lenders are likely to do a soft credit check to determine your creditworthiness. The logic here is simple: if you have managed your previous credits well before, then it is likely that you will manage even now. Your previous credit records speak volumes on your behalf.
However, that should not be a cause for alarm as a soft credit check that will be conducted will not affect your credit score. That implies that you still stand a big chance to get the online installment loan and quickly fix your student financial needs.
What are the benefits of an online installment loan to a student?
Online installment loans will help you fix your cash needs immediately. They are advantageous in that:
They have predictable payments. You will get to know the exact amount to repay as interest on the loan that you will receive. Besides, you will get to know when you will finish repaying your loan. This means that you will be comfortable and at ease while you service the loan.
You can also schedule repayments with online installment loans. You will be in a position to organize and schedule the intervals of paying your loan. That will help you in avoiding loan defaulting which may negatively impact your credit score later on.
As a borrower and especially student, it is important for you to understand that loans are supposed to be repaid. Yes, so only borrow what you need and make smart financial decisions. You should not add another loan to the one you take. Ensure that you repay the amount of loan taken first, then proceed to borrow another one.
Remember, in most cases, interest rates will vary depending on the previous credit score. If your previous credit score is relatively low, the lender will charge a higher interest rate as compared to the one who has a higher credit score.
Online installment loans are available to Canadian students as a quick solution to financial needs. All you need to do is look at the right places and weigh the terms of lending. This will help you make the right financial decisions even at the hour of need so as to positively impact your credit score.