What would you do if you needed a large sum of cash for an emergency? Even if you have a decent, stable source of income, sometimes it just isn’t enough to cover an unexpected event like a medical bill, home repair, or major car issue. That’s where quick cash loans come in handy. If you need a loan fast, there are many cash lenders in Canada that can help.

Let’s get into what getting a quick cash loan in Canada entails and why it’s your best bet if you need a quick infusion of cash.

Why work with a private lender?

A private lender is different from a bank, which is a more traditional institution. However, you should always expect a high level of professionalism from a private lender. Shop around and make sure your private lender is the right fit for your needs.

The main advantage of working with a private lender to get a quick loan is that the process is streamlined, and therefore quicker and easier. There’s less paperwork involved, and less discussion and deliberation. This makes getting a loan a lot more convenient for the borrower. In many cases, much of the fast cash loan process in Canada can be completed online.

What are the pros and cons of working with a private lender?

Should you decide to go with a private lender, consider some of the most important pros and cons of working with one. With these in mind, you’ll be better prepared to make the right decision for your situation.

Pros

  • As we’ve mentioned earlier, the main reason to go with a private lender for a loan is the speed and ease of the process. You’ll get your cash quick since private lenders essentially cut out the middleman. You could even get your cash the same day you apply for the loan.
  • High Approval Rate. Generally speaking, private lenders are more likely to accept a loan application from a borrower with a less-than-stellar credit score. Since their requirements are less stringent, the chance of getting approved by a private lender is typically higher than at a traditional financial institution.
  • No Credit Check. Many private lenders use a variety of factors beyond credit scores to determine the credit worthiness of an applicant. They will typically consider everything from income and job stability to debt-to-income ratio. Some private lenders are very sophisticated when it comes to making a decision about a borrower and can quickly assess a wide variety of factors to get you a response almost immediately.
  • From the speed of their processing to the ease of online application, borrowing from private lenders is a lot more convenient than dealing with traditional financial institutions like banks.

Cons

  • High Interest Rates. Private lenders charge higher rates due to the added risk they take on by lending to people who are more likely to default on payments.
  • Fees. Fees can quickly add up if you’re not careful. Be mindful of origination fees, administrative fees, penalty fees and others. Check with the private lender to find out about all fees that can apply.

What do I need to get approved by a private lender?

Private lenders do consider your credit score and history when making their decision regarding your application. Depending on the lender, how much you’re applying for, and the type of loan, other factors will come into play as well. These include income, employment stability and debt-to-income ratio.

Some credit lenders are tailored to people with bad credit. These types of lenders tend to not put very much emphasis on an individual’s credit score, and look at those other common factors instead. Depending on your credit score, income, employment, and debt ratio, you should seek out a lender with requirements that will provide the best chance of approval for you.

What documents do I need to apply for a fast cash loan?

To complete the lending process, private lenders will generally require you to provide documents to prove your identity and income.

What types of quick loans do private lenders offer?

Personal Loans

These are some of the most common types of loans offered by private lenders. Amounts can range from $500 to $50,000, depending on the lender and your financial situation. You will typically have anywhere from 3 to 120 months to repay this type of loan. This is a much better deal than a payday loan, which typically needs to be repaid much sooner and has a higher APR. Interest rates for personal loans from private lenders can range from 3 to 47%.

Car Title Loans

A car title loan is similar to a personal loan except it is secured by your vehicle. If you default on any payments, the lender will have the right to seize your car. With this type of loan, you can borrow money against the value of your car, but not more than that. These loans are typically easier to get approved because they are secured, but can have high interest rates.

Payday Loans

Payday loans are short-term loans for small sums of money that need to be paid back by your next payday. Most payday loans range between $50 and $1,500 and have very high APRs, sometimes up to 500%. These loans are small but quite expensive, and are typically paid back in a single payment within 14 days.

Avoid predatory payday lenders

When you’re looking for a loan with a private lender, you’ll inevitably come across some predatory payday lenders in your search. These lenders are out to take advantage of people who need cash fast.

The problem is that desperate borrowers can often end up in a vicious payday loan cycle that is difficult to get out of. Once you accept an initial payday loan, you could find yourself in a situation where you’re getting another payday loan to pay off the first one, and so on. Before you go down this path, look into options like a short term installment loan. It will be easier to manage and won’t keep you trapped in a cycle of debt that’s hard to break.

If you’re looking to get a fast cash loan in Canada, make sure you do your research and find a trusted private lender that is suited to your needs. Avoid potential pitfalls of predatory lenders and ensure you have all the facts before you commit to any decision regarding your finances.