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loans Canada Aug 06, 2020

The Difference Between Private Lender Loans and Bank Loans

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The Difference Between Private Lender Loans and Bank Loans

Let's look at the difference between bank loans and private lender loans in Canada. Canadians looking to secure quick and easy cash often don't know where to start. They usually gravitate toward the traditional path of bank loans but are surprised when they don't qualify. An excellent alternative to the bank is a private lender, like iCASH. Even those with a bad credit score can be eligible for this type of payday loan and it just might be a better option for you.

Typical Bank Loans

It's easy to associate loans with banks. After all, they are the traditional path to obtaining the funding you need. Some people seek loans for a large purchase, like a house, a car, a college degree, medical expenses or even a vacation. Banks are also a source for smaller loans in emergencies. However, sometimes bank loans aren't an option for Canadians, or, at least, they're not the best option.


High-Risk Adverse

Banks don't like risk. Therefore, they don't tend to offer loans to those with poor credit. Generally, those with low credit scores are the people who need low-interest loans the most! With banks, they either don't qualify at all, or they're stuck with hefty interest rates. If this seems counterintuitive, that's because it is. When you need money fast and don't have a high credit score — you probably can't afford a high-interest loan, or your credit will suffer more if you can't make the payments.

Secured Loans

Many banks only offer secured loans, which means they are tied to collateral and add more risk for the borrower. You could risk your house, car or other valuable possessions that you can't afford to lose. This situation is why many choose to walk away from banks and inquire about unsecured loans in Canada.

Private Lender Loans

Although banks are the traditional path, private lenders are becoming more popular. Many call them payday loans because they tend to be short-term loans that the borrower repays once receiving the next paycheck. Many lenders offer other repayment options, but private loans are traditionally sought by those who need money fast. However, recently they're becoming a source for those same larger purchases as bank loans.

Low Credit Loans

Payday loans are an advantage for those with low credit. When banks deny you, private lender loans can help because they use advanced systems to determine your eligibility. A credit score is only one piece of the puzzle, and having low credit doesn't automatically disqualify you. At iCASH, lenders know that those with poor credit often need opportunities to boost their scores, and a quick payday loan could be the trick.


Low Interest and Easy Repayment

Further, if you have low credit, that doesn't mean that private lender loans will have high-interest rates. At iCASH, rates are set based on where you live. Canadians can borrow up to $1,500 and choose between one and three secure payments*. These advantages often make private lender loans in Canada a better option than bank loans.

Not sure if your credit score is the best? Not feeling confident about applying for a bank loan? Look no further. Borrow up to $1,500 instanly with iCASH online today.