Personal Loans in Nova Scotia
Do you live in Nova Scotia and need some extra money? No problem at all. There are all sorts of reasons someone would need some extra money and, no matter what that reason is, personal loans are there to help. There are a few different kinds of personal loans made to fit any type of […]
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Do you live in Nova Scotia and need some extra money? No problem at all. There are all sorts of reasons someone would need some extra money and, no matter what that reason is, personal loans are there to help. There are a few different kinds of personal loans made to fit any type of situation. While it may seem difficult to get one, ultimately, that is how lenders make their money, so they don’t really want to turn you down. As long as the lender can guarantee that they can get their money back, chances are you won’t get declined. However, there are a few things you need to do to get approved.
Our Personal Loan Application Process
How to get started
Let’s start at the beginning, now that you have decided to get a personal loan, where do you go from there? Well, first you need to decide how much money you are looking for. Once that has been decided, the next step is figuring out your credit score. After that, then you would need to decide where to apply.
Once you have figured those things out, then it is time to decide your best personal loan options. Do you just need some cash for some personal expenses and leaning toward an unsecured loan (cash loan) or are you looking to do some home renovations and a home equity loan looks better (secured loan)? It’s good to have a good idea of what you want to do before you speak to the lender and move on to the next step, which is to apply.
Before you apply make sure you have done your research on lenders and choose a lender that can supply you with the best interest rate for your credit score. Don’t forget that even if the lender offers you an amount, you do not have to accept the loan.
Once you have applied the lender will request some documentation to prove your identity and that you can afford the loan. They will then assess this information and either offer you a loan amount or decline you.
How do you check your credit score?
There are a few different ways to do this.
First, check your banking app. A lot of major banks will provide you with this information either from Transunion or Equifax. Some major banks that do this are:
You can also get your credit score directly from Transunion or Equifax. You can request your score from them once every 12 months for free or pay $20 per month to receive an updated score every month.
The last option is to check your credit score with free online apps like Credit Karma, which gives you your TransUnion score, or Borrowell, which gives you your Equifax score. These apps give you a rough idea of your credit score, but because they are free, aren’t always the most up-to-date. However, they are great for giving you a ballpark of your credit score which will help you decide which lender is best to apply with.
Types of Personal Loans
In Nova Scotia, there are technically 3 types of personal loans. Unsecured loans, secured loans, and payday loans. While payday loans can also be considered unsecured personal loans, they do have different requirements than your standard unsecured loan, so they fall into a category of their own.
- Unsecured personal loans offer a fixed amount for a fixed period of time and are also considered to be cash loans. There is no collateral involved. Essentially, the lender offers you cash with the understanding you will pay the loan back in full plus interest.
- Secured loans are similar to unsecured loans except they require collateral. Things like car loans, vehicle title loans, and home equity lines of credit fall into this category. If you default on the loan then the lender has the right to seize the asset you put up as collateral. Because of this, these loans are generally easier to get and have lower interest rates.
- Payday loans are similar to unsecured loans as well except for the fact you don’t need all of the documentation required for an unsecured loan. All you need is to be 18 years of age, have an active bank account, and have some sort of income. This also means the lender cannot prove your income before giving you the loan.
How to get a loan with a low interest rate
The easiest way to get approved for a low interest rate is to go through a traditional lender like a bank or a credit union. These institutions give the lowest rates, but they also require the highest interest rates. If you have a debt-to-income ratio under 45% and a credit score of 700 or higher you should have no problem getting a low interest rate loan.
Is a Credit Card required to get a loan?
While it is not required to have a credit card to get a personal loan, it is likely the lender will want you to have some form of credit history. Credit cards can be the easiest piece of credit to obtain when you are new to credit so it can be very beneficial to have one before getting a personal loan. Plus, the better the credit history that you have, the lower the loan interest.
Can I get a personal loan without a credit check?
The short answer is yes, you can get a personal loan without a credit check. That being said, if you do get a loan this way it will either be a payday loan or a high-interest loan. These types of loans are also known as bad credit loans.
You can also get auto title loans or pawn shop loans without a credit check. The issue with these is that with auto title loans you could potentially lose your vehicle and they both have extremely high interest rates.
No credit check loans do often require collateral but that is not always the case. There is also no guarantee for approval, and they don’t build up your credit. While these are great options if you have bad credit or no credit and need money fast, they aren’t recommended as a first choice. In most cases, the interest alone is higher than the loan amount.
How long does it normally take to get approved?
The amount of time it takes to get approved for a personal loan depends on which type of lender you go through and how soon you submit your documents. Applying through a traditional lender can take anywhere from one day to one week whereas online lenders can range anywhere from a few hours to a few days.
Once you receive the approval it can take anywhere from a few minutes to a few hours to get the money.
What are personal loans typically used for?
In Nova Scotia, just like most other provinces in Canada, borrowers tend to use personal loans for all sorts of things. Here are a few of the most frequent.
- Car Repairs
- Car Purchases
- Debt Consolidation
- Paying Taxes
- Home Renovations
- Living Expenses
- Large Purchases
- Starting a Business
All of these reasons allow a borrower to pay for the things they need immediately, without paying the total cost upfront. Things like debt consolidation, taxes, car purchases, and car repairs are all necessary expenses that can sometimes get out of hand. Having a simple solution to catch up without all of the stress is sometimes necessary. While it can be overwhelming to consider a personal loan, it can make the cost of these expenses bearable and have a positive impact on your overall financial health.
For luxury items like travel and large purchases, personal loans can make them more affordable, but they can also help to build your credit. Sometimes, it is better to purchase things on credit and pay them off over time even if you have the cash. This allows you to gain credit experience in order to make larger credit purchases in the future like a larger personal loan, a vehicle, or even a house.
Even though it is required to tell the lender what you plan to use the personal loan for, it doesn’t make a huge difference where approval is concerned. As long as you pay back the personal loan and let the lender know your intentions, you can use it for whatever you choose.
How to get qualified for a personal loan
In order to qualify for a personal loan, lenders require a few things to verify you can afford a loan. Just like other provinces, Nova Scotia requires that the borrower supply the lender with proof of income, proof of address, valid government ID to prove their identity, and consent to run a hard credit check. Once the lender receives these documents, they check to make sure that you are able to pay the loan back, if you can they will offer you a loan amount.
What is a hard credit check?
A hard credit check allows the lender to get a good look at your credit score as well as your credit history. Things like collections, bad debt write-offs, bankruptcy, and collections also show on your credit report. While lenders look at your most recent tradelines (forms of credit such as credit cards, lines of credit, car loans, and personal loans), any negative trend on your credit report will ding your credit score.
A bad debt write-off can stay on your credit report for up to 6 years, collections stay for 7 years and bankruptcy is 9 years. While these are negative signs to the lender, if your more recent inquiries have a positive payment history this looks good to the lender. The more positive history you start adding to your credit report, the more they outweigh these negatives. This breakdown is just as important to a lender as the credit score itself.
Another thing a hard credit check shows the lender is your debt-to-income ratio. This is the amount you pay monthly in debt compared to how much you earn monthly. Most lenders look for this to be below 45-50% of your monthly income. Even if you have a good credit score, your debt-to-income ratio could affect your approval.
Overall, the lender uses the credit report to judge your reliability as a borrower. In order to run your credit report, lenders need either written or verbal consent to run your credit report as well as your full legal name, and sometimes your SIN number is needed.
What credit score is needed for a loan approval?
Even though there are other factors on your credit report that affect your approval, the credit score still makes a difference since it reflects your financial history. This is a tougher question to answer than you would think.
To get approved for a personal loan with a good interest rate it is recommended to have a credit score of at least 690, but with some lenders, it can be as high as 700-750. That is just to get a high amount with a low interest rate. To get approved at all the average is 610-640, however, this can be lower depending on if you are looking for a good credit loan or a bad credit loan.
Bad credit loans often approve people for loans with credit scores between 500-660. These loans often have much higher interest but are a great way to build your credit and get a good credit loan the next time you need to borrow money.
Overall, if you have a credit score of 500 or higher you are likely to get approved for some type of personal loan, but in order to get a good rate, it is recommended to have a credit score of at least 700.
What is accepted for proof of Income?
Most lenders require 1-2 pay stubs that are current with the last 90 days. This shows your current monthly income. They may also require up to 3 months’ worth of bank statements and, depending on whether you recently started at your place of employment, a letter of employment.
If you are receiving an alternative source of income, depending on what the income is, lenders will most likely still request a few of your most recent statements as well as 3 months of bank statements.
What about proof of address?
Well, proof of address can be any bill you receive within the last 3 months. Some examples are:
- Hydro Bill
- Credit Card Statement
- Phone Bill
- Rental Agreement
You can also use your driver’s license if the address is current.
What form of ID can I use in Nova Scotia?
Like most provinces, any form of government issued ID can be used when applying for a personal loan. Most people use either their driver’s license or their passport.
Average Financial Demographics in Nova Scotia
While Nova Scotia is one of the cheaper provinces in Canada to live in, people still need to borrow money to keep up with the cost of living. The average family income is around $78,920 while the average income for a single person sits around $41000. However, the average debt in Nova Scotia resembles closely to other provinces in Canada
The Overall average debt in Canada is $20,739 and the average in Nova Scotia is $20,907. Interestingly enough, this number isn’t too far off from Ontario ($0,681) and BC (21,283) which are the most expensive provinces in Canada.
Can a resident of Halifax get a loan in Nova Scotia?
A lot of people wonder when applying for a personal loan if they have to apply in the same town they live in. The answer to this is no, you can get a loan from any institution as long as it is based in Canada.
With the introduction of alternative/online lenders, this has become increasingly common. Also, certain traditional branches aren’t always located in the town that you live in. In other cases, you have moved since you created an account, so your home branch is not in the town you live in.
When it comes to online lenders, the diversity in interest rates and accessibility makes it convenient no matter where you live. Even if you choose to apply to a lender like Spring Financial, which is based out of British Columbia, and you are located in Halifax, this isn’t an issue.
Many lenders gear their products toward different towns and provinces, so no matter where you live, you have convenient access to a personal loan.
Can Spring Financial get you a Personal Loan?
Yes, we can! Even if you are in Nova Scotia, we can get you a loan anywhere from $500-$15,000 and the application can be done in less than 3 minutes. You even receive your money in as little as a few hours from the time you apply. Click here to fill out an application or chat with an online representative.