What Types of Canada Loans Are Out There?
People need money for a lot of reasons, and lenders understand that. That is why there are many different loan options offered by lenders. Below, we’ll overview some of the most popular types of Canada loans, their purposes, and what they can do for you.
Personal loans are loans for anything you like. If you want anything that will cost any amount of money, you can apply for a personal loan. That includes vacations, larger purchases, credit card debt, or anything you like. These are dependent on your credit history, so you might not be eligible for one unless it’s good. The interest rates on these types of loans are usually high.
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Payday loans are smaller loans that should help you get by until your next paycheck arrives. They’re usually small in amount but do have high interest rates. Payday loans are pretty expensive in the end, and they’re not advised for most people.
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Auto loans are loans for your automobile. Just like mortgage loans, they are strictly tied to your vehicle, so if you fail to pay all of your dues on time, your car might be impounded. Unlike mortgage loans, auto loans can be offered by automobile dealerships. These types of loans have relatively high-interest rates, too.
Debt Consolidation Loans
Debt consolidation loans are meant to refinance your outstanding debts and make them easier to pay off. These are most often used for credit card debts, and result in fewer and lower interest payments.
Small Business Loans
If you’re thinking of starting a small business and are looking for some starting money, you might want to get a small business loan. Small business loans offer initial funding for a small company started by aspiring entrepreneurs. While these can be private, they can be federal as well. The interest rates on these loans are medium.
Mortgage loans, more commonly known as mortgages, are loans offered to potential new homeowners looking to purchase a property that they can’t afford to pay for upfront. A mortgage loan is closely tied to the property purchase, and failing to pay one will result in foreclosure. These types of loans have very low-interest rates when compared to other loans.
Home Equity Loans
Home equity loans are designed to help you pay for big projects regarding your home. As long as you have equity in your home, you can apply for a loan like this. If you take up a home equity loan, your home is considered collateral, so you might want to think twice before getting one. These types of loans come in dramatically different packages, which means the interest rates vary wildly. They’re used for renovation, major remodeling, or additional construction.
Aside from these, there are many more types of loans out there. These are just the most popular options. If you need a loan, make sure to contact your local lender and determine which option might be best for your unique needs.