How to Get a Personal Loan in Nova Scotia

In order to qualify for personal loans in Nova Scotia, 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, and a valid government-issued 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. Before you apply, though, it’s important to verify that the lender you’re applying with for Nova Scotia personal loans is considered to be trusted lenders. 

Types of Personal Loans

In Nova Scotia, there are technically 3 personal loan options.

• Unsecured personal loans are a type of fixed-rate loan that offers 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. It’s also easier to get larger personal loans since they’re usually used for things like home renovations and debt consolidation. 
• Payday loans are similar to unsecured loans except that 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 that payday loan companies have no credit score requirements and don’t report to the credit bureaus. However, your payment history still counts. 

You can get any of these loan types from traditional financial institutions or with alternative lenders. With either type of lender, your credit history, credit scores, credit utilization and debt-to-income ratio all make a difference in your approval as well as your loan amount and payment amounts. 

Personal Loans and Credit Checks

While traditionally, you would get a credit check in order to get a personal loan, 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 loan with higher interest rates. 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 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, and it doesn’t have a positive effect on your financial health or your financial future. 

 Credit Score Needed to Get a Personal Loan

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.

In order 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. In order 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 that you have a credit score of at least 700.