Installment Loans Frequently Asked Questions
What is considered an installment loan?
Any type of loan that involves a lump sum of money that you must repay over a set term is an installment loan. Direct lenders are all examples of installment loan providers. Examples of installment loans include:
- Personal term loans
- Car loans
- Typical mortgages
What is the difference between a payday loan and installment loan?
Payday loans are different from other types of loans. The main difference is the repayment process between the two.
Payday loans are fast, short-term loans where repayment is typically expected on the borrower’s next payday. Installment loans are more diverse and involve timely repayments over a longer term. An installment loan can involve monthly repayments over a term that can take years. Payday loan terms are usually between 2 and 4 weeks and will seldom go over one month in Canada.
Can I get an installment loan with bad credit?
Yes, there are plenty of installment loans for bad credit borrowers in Canada. You can even find bad credit long term installment loans online. Installment loans are a very diverse category, so there are countless options available.
When it comes to bad credit installment loans, you will have fewer options for lenders and you will also have to pay higher interest rates than a good credit borrower would.
Can I get an installment loan in Canada with no credit check?
Yes, it is possible to get no credit check installment loans. For example, someone who is new in the country may not have a credit history yet, and it doesn’t mean they cannot get an installment loan. The terms on the many no credit check installment loans vary widely in Canada. You should take your time to compare these lenders to find the best rate available.
What interest rates should I expect on an installment loan?
Installment loans come with as wide a range of interest rates as any other kind of loan. The rates you get will depend on your credit score and the type of lender you go to.
Installment loans are harder to get from banks, but they may offer interest rates of under 4% to the most qualified borrowers. Bank installment loan interest rates typically range from 4%-7%.
If you need faster approval and/or want a less judgemental lender, Canadian alternative lenders offer a wider range of interest rates. Typical installment loan interest rates range from about 6%-13% in Canada, assuming you have an average or higher credit score. Bad credit installment loans have the widest range of interest rates. If you’re not careful, you can get an APR of over 40%. However, you have many options to choose from regardless of your credit score.