Short-term loans are outstanding because they allow fast access to cash without waiting weeks or months for a bank loan approval. They also offer lower interest rates than long-term loans, making them a viable option for many Canadians who need quick cash.
Hundreds of companies are offering short-term loans in Ontario and Canada, but not all are created equal. This post will look at the top short-term lenders in Canada based on customer satisfaction, affordability, and service quality. We’ll also compare each company based on their fees, terms, and repayment options.
We hope this helps you find the perfect short-term lender for your needs.
What are short-term loans?
A short-term loan is a certain amount of money you can borrow, online or in person, from nearly any lender in Canada. Remember, banking institutions do not issue short-term loans, and these are only available at online lenders in Canada, such as Cash Depot.
Where Can I Find a Short-Term Loan?
Next, comparing rates from different lenders, unsecured loans with fair credit generally have higher APRs than loans with good or excellent credit, so shopping around is crucial. For example, the best personal loans for borrowers with appropriate credit, like those with credit scores of 600, typically carry APRs of between 10 percent and 30 percent, fewer fees, and different terms for repayment. On the other hand, many personal loan lenders advertise lower APRs, but these rates are reserved for those with better credit.
The application process does not affect your credit score, so that you can consider loan options quickly without risk. Once you apply, Loans Canada’s algorithms review the information provided about your income, credit history, and the anticipated purpose of your loan to determine the best options for your particular situation and requirements. Then, you can browse through that information, choose a lender, and get the loan amount in 24 hours. LendDirect Apply Now While most lenders on this list offer personal loans you pay off in installments over a set period, LendDirect offers line-of-credit-style loans, which are more flexible than standard personal loans.
With LoanConnect, each lender advertises their respective loan limits and sizes, and going through a pre-approval process can give you a sense of what your interest rates and monthly payments will be for that size. You can also request quotes to compare loan offers and select one that best meets your needs. In addition, each lender offers more than one loan option, which you can tailor based on your monthly budget and the time frame you will have to repay your loan. Then, you are automatically matched to loans that best fit you based on your credit situation.
Types of Short Term Loans
Fortunately, some lenders in Canada specifically target customers with poor credit for short-term loans; they usually do not perform a credit check. Even a few lenders in Canada specialize in Bad Credit Loans; they do not do a credit check when you apply. One of the ways they will try to trick you is to say you need to pay loan insurance before they can approve you.
Credit Card Cash Advances
By paying off your credit card debt before applying for the loan, you will appear better to prospective lenders. The better your credit score, the more lenders are likely to see you as a creditworthy individual, which means your loan will be bigger and more affordable. A lender will likely offer you a higher interest rate on a smaller loan and a less flexible repayment schedule.
Payday loans are like installment loans, except lenders offer amounts ranging from $100 to $1,500. Typically, payday loans are available for payments of $1,500, with repayment terms ranging from 14 days to 62 days. However, payday lenders typically only provide loans in the $100-1500 range, with shorter repayment terms at 14 days. Payday loans are designed to bridge the gap between paychecks and last for a shorter time.
Once you get a loan, paying the payments on time will positively affect your credit. While a new installment loan may raise your score, strengthening your credit mix, a personal loan only increases your credit over time if you can make the payments in a timely fashion. The reverse is true of your short-term loan; your credit score will decline if you miss payments or cannot pay them back.
When is a short-term loan suitable for me?
If your credit is good, you have healthy finances, and you can afford to, a shorter-term, consolidated loan is a safer, cheaper option. With minimal paperwork (you can apply online) and little stress involved, the installment loan is an ideal short-term loan option for individuals who need small amounts of cash fast but do not want to jump through hoops to get it. You will apply for payday loans online or in person, and once approved, you will receive a small amount of cash directly into your account. The rates of the installment-only short-term loans vary by lender, and they let you access vast amounts of money ranging from $5,000 to $30,000, paid off over a shorter period (6 months to 2 years).
Short-Term Small Business Loans
When most people think of small business loans, they picture a traditional five-year or 10-year term loan offered by banks, credit unions, or government-backed loans. However, there are specific purposes for loans for which longer terms on those more traditional small business loans may not be best. Often, shorter-term business loans can have faster approval rates than the more conventional longer-term funding from the banks — that helps when time is of the essence. A short-term business loan also can be a tool that allows the company to build a more robust business credit profile.
Pros of short-term loans
Personal loans may also be helpful to refinance credit cards or other high-interest debt. Payoff loans are also available for consolidating credit card debt. However, the payoff is not ideal if you want to take out a personal loan to cover an emergency expense or home improvements. You are better off only relying on credit card cash advances in emergencies.
Good credit signals to the lender that you are likely to pay back the loan on time, so in return, you might face things like reduced payment schedule flexibility or higher interest rates. When comparing the best loans for people with fair credit, the first thing to look for is a lender’s minimum credit score requirements. Your credit report, credit score, and debt can all impact your lending options, including interest rates and what kind of loans you are eligible for.