Whether you are looking for some money for an urgent car repair or a costly home project, you will always have many options for getting an unsecured loan. Typically, secured loans are types of loans that you can qualify for even when you don’t have collateral. Most borrowers prefer unsecured loans since they don’t have to worry about losing their property if they are unable to pay. Here are some of the common types of unsecured loans that you can choose from.
Payday Loan
Payday loans have become the most popular no credit check loan Canada option that most people prefer. Payday loans are mostly offered by non-financial institutions to individuals who are looking for money to cover their expense until they receive their next paycheck. The most significant advantage of payday loans is that they are quick and even people who have a poor credit score qualify for the loan. They are convenient and can help you rebuild your credit history.
Credit Cards
This is another common type of unsecured loans. When you use your credit card, you have a pool of money available, but you can’t get a lump-sum at the start of the loan since you are only allowed to borrow what you need whenever you need it. Credit cards are popular in Canada since they make borrowing easy. As long as you have been approved, you can start borrowing almost instantly. However, credit cards tend to charge a relatively high-interest rate, and it’s also easy to get in trouble with the credit cards.
Peer to Peer Loans
The peer to peer borrowing model allows you to borrow money from individuals as opposed to financial institutions such as traditional banks. A website is set up that will enable you to post your loan request online and sometimes people may step in to fund your financial need. However, there is no any guarantee that someone will come to your aid. Peer to peer loans are fixed-rate installment loans and will offer you financing at competitive rates.
Signature Loans
Just as the name suggests, the only thing that secures these types of loans is your signature and nothing else. You are only required to make an obligation and sign a commitment letter that you will repay the business or individual lending you money. Signature loans are usually offered by credit unions and some banks although they are awarded in installments. Signature loans usually have lower interest rates compared to the types of unsecured loans.
Student Loans
Student loans are also a type of unsecured loans that are designed to fund your education. Student loans have the best features that you can’t find anywhere else such as grace periods, flexible repayment options, and lower interest rates. However, you can only qualify for a student loan if you are a student.