{"id":73911,"date":"2024-05-17T11:04:42","date_gmt":"2024-05-17T15:04:42","guid":{"rendered":"https:\/\/hardbacon.ca\/?p=73911"},"modified":"2024-06-04T15:51:56","modified_gmt":"2024-06-04T19:51:56","slug":"alternative-loans-applications","status":"publish","type":"post","link":"https:\/\/hardbacon.ca\/en\/loan\/alternative-loans-applications\/","title":{"rendered":"Use Alternative Loans Wisely: Diverse Applications For When You Really Need Them"},"content":{"rendered":"\n

In collaboration with Cr\u00e9ditmatik<\/p>\n\n\n\n

Sometimes, the traditional banking system can’t meet our borrowing needs. Alternative loans offered by non-banks therefore become an interesting option. They can provide people with temporary financial relief – they are designed for short-term use. In the vast majority of cases, if you qualify for a traditional loan, opting for the traditional loan will be more beneficial to you. However, in certain situations, an alternative loan may be a wise choice.<\/p>\n\n\n\n\t\t

\n\t\t\t\t\t\t\t\n\t\t\t\t\tAccess up to $350 to prevent overdraft\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t
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\n\t\t\t\t\tBree<\/span>\n\n\t\t\t\t\t\t\t\t\t\t\t
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Apply for a cash advance of up to $350 with 0% interest and no credit check required.Free trial for the first month then $2.99 monthly. You can cancel your membership anytime.<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\n\t\t\t\t\t

Get it now<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\n\n\n\n

Paying for Living Expenses<\/h2>\n\n\n\n

What would happen if you lost the Internet because you can’t pay the provider? Maybe your kids use it to do homework, and you use it to work. In Canada, even people with decent jobs are struggling to make ends meet: A growing number of people aged 35 to 65 are missing their credit card payments, according to Equifax<\/a>. <\/p>\n\n\n\n

Taking out an alternative loan could help you keep the Internet. On your next payday, you’ll repay the loan in full, plus accrued interest and applicable fees. Cr\u00e9ditmatik<\/a>, for example, offers a rate of 18.99% for fast credit solutions of up to $1,500 on the same day.<\/p>\n\n\n\n

In many cases, credit solutions like those offered by Cr\u00e9ditmatik fill a gap. People with poor or no credit score, such as those with high debt levels<\/a> or newcomers to Canada, often don’t have access to credit cards and loans offered by banks. Self-employed people who declare low incomes due to business expenses may also encounter certain pitfalls in their search for credit. <\/p>\n\n\n\n

Just because you’re in one of these situations doesn’t mean you don’t have bills to pay! Alternative lenders’ interest rates may be higher than traditional lenders\u2019, but your bills will be paid on time. To be safe, make sure you get a loan under a contract that complies with provincial guidelines.<\/p>\n\n\n\n

Compensating for a Temporary Loss of Income<\/h2>\n\n\n\n

A series of misfortunes often causes financial difficulties that can make access to traditional credit impossible. Some industries are going through turbulent economic times and have to lay off part of their workforce. If your finances are tight, it’s highly likely that job loss would cause enormous stress in your household.  <\/p>\n\n\n\n

In addition to layoffs, illness sometimes forces people to take an extended break from work. In many cases, this also means additional care costs. Whatever the reason for your reduced income, a credit solution like the one offered by Cr\u00e9ditmatik can help you pay for certain expenses, from electricity bills to physiotherapy sessions.<\/p>\n\n\n\n

But be careful. Are you sure you’ll be able to pay it back? In the case of loans taken out to compensate for loss of income, 70% of people have difficulty repaying them. To prevent the financial worries associated with illness, you may want to consider taking out disability insurance<\/a> first.<\/p>\n\n\n\n

Debt Consolidation<\/h2>\n\n\n\n

Imagine if you had three credit cards and were struggling to make the minimum payments each month. This is the type of situation that brings people to consolidate their debts. They combine them into a single loan to make repayment easier. This solution will work best if you find a personal loan with an interest rate lower than that of credit cards (usually around 20%). <\/p>\n\n\n\n

You can then use this loan to pay off the entire amount owing on your credit cards. Then, get rid of these cards to avoid falling back into the vicious circle. Instead, get a prepaid card<\/a> for those times when you need a 16-digit number to pay for your purchases.<\/p>\n\n\n\n

Building Credit<\/h2>\n\n\n\n

When you pay off a debt, whether it’s traditional or alternative credit, the lender notifies the credit-reporting agencies Equifax and TransUnion. If you pay everything you owe on time, the information transmitted will be positive. This will help you build or improve your credit score<\/a> in Canada. Be aware that failing to repay your debts will have a negative impact on your file.<\/p>\n\n\n\n

Your credit score fluctuates according to your repayment habits. Having a variety of debts and paying them off on time are all part of improving it. Building your credit will take a few months, if not longer. Don’t expect miracles! A better credit score will eventually give you access to traditional loans.<\/p>\n\n\n\n

Buying High-Value Assets<\/h2>\n\n\n\n

Your car broke down, but you can’t qualify for financing on the new model you want? Many alternative lenders target vehicle buyers. If you’re lucky, you’ll get a rate below 10%, but beware, it could also be as high as 30%!<\/p>\n\n\n\n

In real estate, alternative lenders have been gaining market shares<\/a> in recent years, accounting for almost 20% of new loans last year. These companies offer short-term loans, from a few months to two or three years, and high interest rates. As these alternative lenders are not regulated by the Office of the Superintendent of Financial Institutions (OSFI) in the same way as banks, they do not have to stress-test their customers. <\/p>\n\n\n\n

An alternative loan can be interesting if you intend to repay it quickly, for example in the case of real estate flips or if you are expecting an inheritance soon. The reason is simple: Rates are two to four times higher than with a bank, plus there may be administrative fees.<\/p>\n\n\n\n

Checklist: Make the Most of an Alternative Loan<\/h2>\n\n\n\n

To help you decide whether an alternative loan is right for you, we’ve put together a list of things to think about:<\/p>\n\n\n\n