- How Long Is The Payment Term?
When it comes to paying off loans, the debtor’s ability to meet predetermined payments plays a major role in actually getting the funds requested. Certain loans such as title and payday loans must be paid off in lump-sum within the specified period, either in two weeks or few months as outlined in the agreement. Since most title loans remain unaffordable to citizens, installment loans Canada have emerged as the best alternative since debtors can pay back loans at regular payments over an extended duration. Before signing on the dotted line, borrowers must inquire about the term of the loan, which essentially lets them know the total cost of the loan. After all, it’s much better knowing the terms of the loan agreement, lest surprises crop up down the line.
- Do I Need To Offer Assets As Collateral?
Most conventional loans insist on collateral as a form of security against secured loans. This essentially means that debtors must present valuable assets such as stocks, shares or even property to secure loans. Fortunately, such loans fetch lower interest rates which make it much easier to pay. If debtors fail to settle such loans, their collateral will be liquidated to make up for the loss. In most cases, customers have a diverse range of options at their disposal, from home mortgages to auto loans.
Installment Loans Canada – 6 Questions to Ask Before Seeking
Depending on the specific type of loan you need, it’s advisable to know whether collateral might be involved in the application process and the precise conditions upon which collateral can be seized.
- Are There Prepayment Fees?
Financial institutions have become synonymous with making money from interest. Through such a lucrative source of income, they have gone above and beyond to provide various incentives aimed at delaying loan payments sooner than the stipulated date. To safeguard the payment of interest, lenders will charge debtors prepayment fees if their loans are settled earlier than expected. Fortunately, most financial institutions have shunned from charging prepayment penalties as a directive from the government.
- Are Installments Amortized?
An excellent installment mainly focuses on amortized payments. This primarily means that each payment must cater for the principal as well as the interest charged on the original amount. In the absence of amortized payments, each installment paid inadvertently covers the interest charged, which theoretically traps you in perpetual debt.
- Is My Credit Score Good Enough To Secure An Installment Loan?
With loan settled, customers accumulate a credit score which basically highlights their credit history and ability to make payments on time. In effect, higher credit scores positively contribute to the provision of loans and vice versa. On the other hand, a customer’s debt-to-income ratio provides a detailed account of your ability to manage existing debts based on your current income. By obtaining positive answers to such questions, clients are in a better position to evaluate their credit-worthiness.
- Are Online Payday Loans Also Considered During The Application Process?
Before any loan application can be given the green light, creditors conduct a thorough investigation into their bank accounts and scrutinize various payday loans taken by the customer. Any negative information obtained can adversely affect their application status.
