Financial institutions in Canada offer various forms of financing to individual clients, businesses, and organizations. Clients who seek financing for the purchase of real estate usually apply for a mortgage loan. Builders and homebuyers can apply for financing through an intermediary, or they can do this directly. The features of mortgages vary from lender to lender, including the interest rate, the maturity and size of the loan, and the method of repayment. Different types of mortgages are offered on the market, the two basic types being the adjustable-rate mortgage and the fixed-rate mortgage. Other types of mortgages are reverse mortgages, endowment, interest rate, graduated payment mortgages, etc.
Home loans are typically advanced to borrowers who seek to buy a condominium or a house. The term home loan describes a variety of products used to refinance, purchase, or draw down against a property. While the term was formerly applied to loans used for owner occupied properties, it has been expanded to cover a variety of secured loans. A home loan can be used for business investment, buying an investment property, renovations, and traditional home purchases.
Personal Loans form another category in that borrowers receive a lump sum payment from a financial institution and are free to use it for different purposes. These loans are normally unsecured, and borrowers do not need to offer collateral to be approved. Collateral may be required if a person seeks to borrow a larger amount. In other cases, financial institutions only require a decent credit score to extend financing. Student Loans are a special form of financing intended for students. They are designed to help students meet their living expenses and pay for books, tuition, accommodation, etc. Student Loan Consolidation differ from other types of financing in that the schedule of repayment may be different, and the interest rate is usually lower.
Auto Loans are used to purchase an automobile. An auto loan is a personal, unsecured loan, which is extended based on the borrower’s integrity, creditworthiness, and ability to pay it back. The subprime auto loan is one variety, which is offered to persons with limited credit histories and substandard or poor credit score. While there is no cutoff score, they carry higher rates of interest compared to prime loans. Financial institutions may impose prepayment penalties in case the borrower repays the loan before the term. Bad Credit Loans are also offered to persons with no or limited credit history or substandard credit score. In Canada, the interest rates, terms, minimum amounts, and restrictions vary from lender to lender. The interest rate may vary from 12 percent to 600 percent depending on the lender and the province of residence. The loan amount also varies - from $200 to $3,000, and the minimum term can be anywhere between zero days and 3 years.
Payday loans are offered with extremely high rates of interest most of the time. A payday loan is a term denoting short-term financing used to meet one’s expenses until their next paycheck arrives. A payday loan, known as cash advance, has to be repaid in full until the next payday. Credit Cards, on the other hand, are in the form of a line of credit, with issuers creating a revolving account. Cardholders can make purchases or borrow money as cash advance too. They can choose between making the minimum payment only, paying more than the minimum, or paying the balance in full. There are different types of credit cards, depending on one’s preferences and requirements. Clients can choose from cash back credit cards, no annual fee credit cards, low interest credit cards, rewards credit cards, and other types.
Small Business Loans are yet another form of financing, specifically intended for business owners who seek to modernize, expand, improve, or establish small businesses. To this, the CSBFP encourages financial establishments in the country to offer financing to small businesses. It shares the risk with financial institutions and helps business owners secure up to $500,000. Small business loans can be used for different purposes such as buying or improving real estate and land, improving used machinery or equipment, buying new equipment, and improving leased properties or buying leasehold improvements.
Finally, business owners and individual borrowers may choose to consolidate loans. They can consolidate multiple debts (both credit card debts and loans) into one. Debt consolidation results in a lower rate of interest, longer periods of repayment, and more manageable payments. Business debt consolidation is beneficial in that it allows businesses to lower the cost of debt, restructure their debt, prepare for expansion, and manage their credit profiles. This may involve conversion to long-term debt, invoice factoring, or discharge of debt with the purpose of saving interest costs in the long term. Make sure you bookmark our site.