How much can I borrow with a personal loan in Nunavut?
A personal loan is a versatile form of financing that can be used for almost anything, from covering emergencies to funding purchases. Although the level of consumer debt in Nunavut is the lowest of anywhere in the country, at just $20,923, this type of loan is nevertheless a popular option for those seeking flexible, short or medium term financing. The amount you can borrow depends on your credit score, income, and existing debt payments, and the range is $500 to $50,000 – with higher amounts reserved for the most qualified borrowers.
How do I choose the right loan for me?
Choosing a loan may seem overwhelming, but it need not be. Here are some simple steps to ensure you find the right product for you:
- Step One: Understand what loan you need – what it’s for, how much you need, for how long, and so on.
- Step Two: Find loan providers that have what you need.
- Step Three: Narrow down this list of providers by examining their eligibility criteria, and weeding out those who won’t approve you. This means you should know your credit score, your income, and how much other debt you have.
- Step Four: Check the reputability of the companies you are considering to eliminate any untrustworthy providers.
- Step Five: Compare costs to find the best deal. This means considering interest rates, loan term, and fees.
As a resident of Nunavut, product choice and interest rates may not be as competitive as elsewhere in the country, as the loan market is smaller – but you should still be able to shop around for a good deal.
Can I get a business loan in Nunavut?
Nunavut is home to a small but hardy business community, which focuses on the mining and construction industries that drive employment across all the Territories. But regardless of your sector, access to affordable financing is a must to ensure survival in this competitive region. Typically, a standard business loan requires you to be able to show:
- A business history lasting at least two years, including bank statements and tax returns
- A business plan
- Proof of revenues, profitability, and projected future revenues
- Collateral (for property, equipment, invoice and vehicle loans)
- Credit history for the business and the business’s owners
There are options for those companies that do not meet these standards, including generous federal and provincial programs aimed at encouraging local businesses, Indigenous businesses, and new entrepreneurs.
Can I get a Nunavut loan if I’m unemployed?
At 13.4%, Nunavut has the highest unemployment rate in Canada, and (like all of the Territories) significant wage disparities. This can mean stark differences in standards of living, and in access to financing. However, those without employment are not without options; although a loan from a traditional lender, like a bank or credit union, may be hard to get without steady income, some alternative lenders will still be willing to work with you. You will probably have to pay more in interest, and may have to provide collateral for a loan, to help the lender cover their increased risk.
How is getting a mortgage in Nunavut different from elsewhere in Canada?
Living in Nunavut means facing challenges unlike elsewhere else in the country, and these challenges have led to an unusual housing market. Nunavut has the lowest levels of real estate ownership and mortgage debt in the country. This is driven by categorization enforced by the government: 50% of all housing is public, and 13% is reserved for government employees. So while, generally, costs of living (like food and utilities) are high, housing costs are low because of this. In parallel, levels of consumer debt are lower in Nunavut than anywhere else in the country.
What are the challenges in accessing financing in Nunavut?
Essentially, the population in Nunavut falls into two categories: those with high incomes in the booming mining, construction and public service industries, who will probably have no problem getting a loan, and communities where the average income is less than $30,000, where families have few assets but live much more simple lives than Canadians at their wage level in other provinces.
Those in this second category may struggle to get a traditional loan from a bank or credit union, but there are alternative lenders and online lenders who can more easily adapt to the needs of this population. And the federal and provincial government have programs aimed at assisting businesses and more financially vulnerable residents, via grants, tax breaks, and dedicated loans. This is especially helpful as payday lenders are not regulated in Nunavut in the same way as in the provinces, and so can gauge customers with punitive rates.