How to Get a Personal Loan in Alberta

In order to obtain Alberta personal loans, you need a few things. The general requirements are a physical address, an income, and a bank account, but they will vary depending on whether or not you’re using alternative lenders for bad credit loans. This is just to apply. Once you have applied, lenders will go over a few things. The first is your credit score.

Credit Score Requirements

In Canada, credit scores range from 300 (poor) to 900 (excellent). Here’s a breakdown of how these credit scores work. If you don’t know what your credit score is, you can find your free credit score online to see where you fall. 

To get approved for a personal loan through traditional financial institutions like a bank or credit union, it is recommended to have a good credit score (660 or higher). You can still get a personal loan with bad credit (under 659), but that is often through online lenders instead of traditional lenders.

Types of Personal Loans

There are 3 types of personal loans in Alberta and across Canada: secured, unsecured and payday. Let’s take a look at these 3 different loan options. 

• Secured loans require collateral on your loan applications, such as a car or a house, to ensure the loan is paid back. If the loan is not paid back in the period of time agreed to or the payments default, the lender can seize the asset that was used as collateral. The most common types of secured loans are home equity loans and auto loans. 
• Unsecured loans are just cash loans. They do not require any collateral, and you’ll receive the payment upon loan approval. If the payments default on an unsecured loan, the lender has the right to sue you and/ or send you to collections for the remainder of the loan owed. These types of loans are also referred to as consumer loans, long-term financing plans, personal loans, and installment loans.
• Payday loans are same-day loans, but these loans do not normally require a credit check to get your credit rating. They often have extremely high-interest rates, making them very easy to get, but they can often lead to a cycle of loans that is difficult to get off of.

While you can get all of these types of loans with good credit, you can also get them with a bad credit score. However, with bad credit personal loans, there are usually still minimum credit score requirements that you need to meet. Lenders will also look at your credit report and your overall credit history as a part of their decision-making process. However, to get the best personal loans, you will need a good credit score.

How Much You Can Get From a Personal Loan in Alberta

The amount you are able to get for a personal loan in Alberta depends on what you qualify for and if you’re getting bad credit loans or not. The average personal amount in this province ranges from $ 1000 to $35,000, but in general, personal loans generally range from $500 to $50,000. The amount can be higher than that, depending on if the loan is secured or unsecured. It also depends on if you are getting a personal loan from a bank or a third-party lender. The personal loan rates are also determined by which personal loan providers you’re using.

Personal Loans Vs Payday Loans

One of the main reasons it is recommended to go for a personal loan, even if you need less than $500, is that payday loan interest rates can be over 319%- to 521%. Most personal loans are open-term, so you can pay them off whenever you like, or you can leave the portion of the personal loan that you don’t use in your bank account to make the payments.

Personal loans also have significantly lower interest rates. While they can have interest rates as high as 60%, even with the highest interest rate, a personal loan is still cheaper than a payday loan. It’s also often used for consolidation loans as a way to consolidate all of your debt into one monthly payment and make your monthly payment amounts smaller.

Lastly, payday loan companies do not report to the credit bureau positively. What does that mean? Well, any payments you make to a payday loan company are not reported; they only report if you end up defaulting on your payments. Because of this, no matter how many payday loans you take out and pay back, it does not benefit your credit score in any way. Personal loans, however, do report positively on your behalf and build your credit score.