Q: Is collateral needed for a personal loan?
A: A personal loan is an unsecured loan. Collateral is not needed for a personal loan, although you might pay a higher interest rate on a personal loan than you would with a secured loan due to the fact that no collateral is necessary.

Q: What type of credit do I need in order to obtain a personal loan?
A: Generally, lenders require good credit in order to approve you for a personal loan. Because a personal loan is considered a high-risk loan, people with poor credit histories or no credit history at all may find it difficult to be approved for a personal loan.

Q: How much will I have to pay for a personal loan?
A: How much you have to pay will depend on how much money you are borrowing, what current interest rates are at and what your credit history looks like. The more you borrow, the more you’ll pay. The better your credit rating, the lower your interest rate will be.

Q: What can I use a personal loan for?
A: There is really no limit as to what you can or cannot use a personal loan for. Personal loans can be used to purchase cars, to make repairs on your home or on your car, to take a vacation, etcetera. What you use your personal loan for is up to you. Since it isn’t a secured loan, the bank really doesn’t have much interest in what the loan is used for.

Q: Is a fixed rate or variable rate better for me?
A: Whether a fixed rate or a variable rate loan is better for you will depend on your personal preferences and your individual circumstances. The first thing to look at is how long you intend to have the loan out for. If you’re going to have the loan out for a long while and interest rates are rising, you may want to opt for a fixed rate so your interest rate doesn’t shoot sky high. On the other hand, if the variable rate loan offers a lower initial interest rate and you intend to pay the loan off before rates will have a chance to go up, the variable rate loan may be your best bet.

Q: How much can I borrow with a personal loan?
A: How much you can borrow will depend on your banks minimum and maximum loan requirements, how much money you make and what your credit history looks like. The more money you make and the better your credit history, the more money you’ll be able to borrow. See our loan calculators and speak to your loan broker who will be able to give you an estimate of how much money you will qualify for.

Q: How long will I have to pay back my loan?
A: The amount of time you have to pay your loan back will depend on how much money you borrow and what monthly payment you can afford. The more money you pay each month, the more quickly you’ll pay your loan off. When paying on a personal loan, your monthly payments are at a set figure. If you would like to pay the loan off more quickly, you’ll want to pay an extra amount towards the principal of the loan each month. If you need more time to pay the loan off, you’ll need to talk to your loan broker about what your repayment options are.

Q: Will I be allowed to pay off my loan early?
A: Most lenders do not have a problem with allowing their customers to pay off their loan early. However, you may incur a prepayment penalty if you pay your loan off early. Make sure that you understand all of the terms of your loan and see if there is a prepayment penalty in the event that you would pay off your loan early.

Q: Why shouldn’t I just go to the bank for my personal loan?
A: When you go to the bank for your personal loan, the underwriting guidelines are likely very stringent and it may be harder to be approved. You also have to settle for whatever interest rate the bank decides to charge you. When you go to a loan broker for your personal loan, he or she works with a number of lenders to get you approved at the best rate possible. Working with a broker not only saves you time, but it can save you a lot of money with a lower interest rate.

Q: What if I can’t make the payments on my loan?
A: If you can’t make the payments on your loan, your credit history will be negatively impacted. However, because the loan is an unsecured loan, any property purchased with the loan cannot be taken from you. If for any reason you can’t make a payment on time, you should contact your lender to make alternate payment arrangements in order to save your credit history.