|
Personal Loan FAQs
1. How easy is it to get a loan?
The process is really very simple. The information you'll need to provide
is:
- The purpose of the loan
- Your name, address, birth date and social insurance number
- Employment and income details
- Your assets, such as car, bank accounts, investments, house etc.
- Your liabilities, including any loans, credit card balances, mortgages
etc., and the total of your monthly payments.
Then a credit assessment will be made based on your ability to repay,
your credit history and your residence and employment stability. And
you'll probably have your answer within 24 hours! Top
2. I always avoided taking out a loan -- I guess
I felt they were for people with financial trouble. Are there other
reasons I might want a loan?
These days loans can be powerful financial tools. You can use them to
acquire assets like a car, a computer or a boat. You can take out a
loan to improve your home, or to contribute to an RRSP or some other
valuable investment. Top
3. Do different types of loans come with different
terms and rates, or are they all the same?
Generally, terms of 1 to 5 years are available on most loans, and the
rate may vary with the term of the loan. RRSP loans are available at
a lower rate, and special rates may also be available on other types
of loans from time to time. With a line of credit, once you have qualified,
you are provided with a credit limit and are free to access the funds
at any time and for any purpose. Interest rates on lines of credit vary,
but they usually compare favourably with loan rates, and are generally
much lower than credit card rates. Top
4. Isn't it expensive to take out a loan?
Borrowing costs depend on the interest rate you're being charged, and
on the amount of the loan and its term. The total cost of your loan
is detailed on the "Statement of Disclosure" given to all loan customers
at the time they take out the loan. Top
5. How is the interest calculated on my loan?
Interest is calculated daily on the outstanding principal balance and
payable monthly. Top
6. How are my payments structured?
For fixed terms loans, each monthly payment consists of a portion of
interest and a portion of principal. The proportion of interest is higher
in the first payment, and it reduces as the principal is repaid. For
lines of credit, there are various repayment options, including interest
only. Top
7. I'm a student and I have heard that there are
special types of loans that I might qualify for. What are they?
We are happy to assist students in obtaining financing for post-secondary
studies. With the increasing costs of pursuing a post-secondary education,we
strive to help students financially as best we can . With us, students
receive a low interest rate on their loans - come talk to us for more
details. Top
8. How do I go about applying for a loan?
Visit your credit union branch to speak with a loans officer. They will
be happy to answer any questions you may have and guide you through
the application process. Top
9. What happens once I apply for a loan?
Your credit union will consider your request, based on your personal
information, and a credit assessment will be made. Usually you'll receive
an answer within 24 hours. Top
10. I've heard people talk about the importance
of having a good credit rating. What does that mean, and how do I get
one?
A good credit rating means that you have repaid past debts in a timely
manner. If you make your payments as agreed, on time and in full, you
will automatically have a good credit rating. Top
11. What is a co-signor? Who can co-sign a loan?
The co-signor is a person who becomes equally responsible for repaying
the loan as you are. If you, the primary borrower, stop making payments
on the loan, the co-signor would be responsible for the payments. Anyone
of age of majority can offer to co-sign for you. Top
12. People say that having "collateral" is important
in getting a loan. What is collateral, and how much do I need?
Collateral is security for a loan. If you fail to repay the loan, the
financial institution can take the collateral. Collateral isn't required
on all loans. Contact your credit union for more information. Top
13. How long will I have to wait for the money?
Once your loan is approved, which usually takes about one day, the loan
amount can be advanced to your account or issued as a draft. Depending
on the purpose, the draft might be issued directly to a third party,
such as a car dealer. Top
14. It seems as though everyone offers different
interest rates. How can I ensure that the rate I'm getting is the best?
The interest rates charged by financial institutions fluctuate because
rates are set competitively and move to reflect the latest market conditions.
Credit Unions are well known for offering lower interest rates than
many other financial institutions. By asking for the best rate and comparing
rates between institutions, you will be in a better position to know
whether the rate quoted is competitive or not. Keep in mind that consolidating
your financial business at one institution can help you obtain even
better rates and that customer service and convenience are also important
factors. Top
15. Can I pay out my loan early, or are there
charges I need to watch out for?
You can pay off your loan any time you like, usually with no early repayment
penalties. Mortgage loans however are different. If they are paid-out
early you will be responsible for paying a penalty fee. Top
16. What happens if I miss a payment?
Missing a loan payment puts your loan in arrears. If this happens, you
should immediately contact your lender in order to explain the situation,
and to make repayment arrangements. Top
17. Job security is always an issue, especially
these days. What would happen if I was laid off?
In the unfortunate event of a job loss, you would continue to be responsible
for repaying your debts in a timely manner. We will be glad to help
you determine the best way to allocate your income to meet expenses,
including your loan payments. Top
|
