Loan Education Center

Learn about the different kinds of loans, how to choose the best financial solution, budgeting tips, and resources for debt management

How to choose a loan

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SHOP AROUND

Remember to fully research all the options available to you before committing to one. It's important that you commit to a lender that makes you feel comfortable and at ease. Do not hesitate to verify the company's solidity when requesting for a loan, so you feel entirely secure.

MAKE SURE IT'S AFFORDABLE

Be realistic – can you pay back what you are about to borrow? Does it fit in your budget? Be careful not to borrow more than what you can repay. We suggest that you borrow exactly what you need to put your finances back on track, not fall further into debt. So make sure to choose the right loan amount that suits your needs.

KNOW YOUR FEES

Be sure to understand all the fees involved when borrowing a loan. To get a better understanding, it is important to read carefully your loan agreement before signing it. Some websites offer loans that come with additional fees, such as arrangement or early repayment fees. Be on the lookout for those!

FLEXIBLE IS GOOD

What are your repayment options? Can you repay in more than one payment? Can you do early repayments? It is important to consider all of these options before choosing where to borrow. It is always better to go where there are flexible solutions!

TRANSPARENCY IS KEY

Clarity is important when borrowing from a lender. The best lenders are transparent about their interest fees, loan limits and terms. This information should be clear and easy to understand on their websites. They also have to be easy to contact if you have questions.

AVOID FRAUD

There are several online lenders who are dishonest and want to scam potential borrowers. It can be easy to fall into their trap. Here are some tips that can help you make sure you're dealing with a legitimate company:
- Don't pay any upfront fees. If a lender is asking you to pay an amount of money to evaluate your credit or financial information, consider this a red flag!
- Be sure to deal with a direct lender that has the required licence to do online lending in your province. Lenders who have their licences are governed by the consumer protection of their respective provinces and have to follow all the regulations in place.
- Be careful about the websites that refer you to other lenders. These lenders are not always licensed and can also be fraudulent. Always deal with a direct lender.

Loan Types

The two most common kinds of loan products are unsecured (not tied) loans and secured (tied) loans.

    Secure loans

  • A secured loan has a complex application and approval process and variable interest rates. It is tied to property or personal assets, and failure to repay the loan results in consolidation of the property or assets. The loan amount is larger and is given out for longer periods of time, often years. Secured loans are often used to pay off large items such as a car or a mortgage.

    Unsecured loans

  • iCASH offers two kinds of unsecured loans, which are cash advance loans and Flexpay. An unsecured loan has a quicker application and has an easy approval process. No property or personal assets are tied to the loan, so an unsecured loan has a higher interest rate. An unsecured loan is for smaller amounts of money, and the loan is short-term, meaning that the money is borrowed for a small amount of time such as weeks or months. Failure to repay an unsecured loan may result in a judgment and will affect your credit rating.

Loan Types

The two most common kinds of loan products are unsecured loans and secured loans.

    Secure loans

  • A secured loan has a complex application and approval process and variable interest rates. It is tied to property or personal assets, and failure to repay the loan results in consolidation of the property or assets. The loan amount is larger and is given out for longer periods of time, often years. Secured loans are often used to pay off large items such as tuition or a mortgage.

    Unsecured loans

  • iCASH offers two kinds of unsecured loans, which are cash advance loans (to be repaid with your next pay check) and Flexpay loans (which have a more flexible repayment schedule, spanning 34 days). An unsecured loan has a quicker application and easy approval process. No property or personal assets are tied to the loan, so an unsecured loan has a higher interest rate. An unsecured loan is for smaller amounts of money, and the loan is short-term, meaning that the money is borrowed for a small amount of time such as weeks or months. Failure to repay the loan may affect your credit rating.

Choosing a Loan Checklist

Before going through a loan process, here are some questions you should ask yourself in order to take the right decision.

  • Do I need the cash for an emergency financial situation?
  • Can I afford to pay back the loan in the given time?
  • Do I understand all the fees involved?
  • Have I considered other possibilities?
  • Do I understand that there are serious consequences to failing to pay back my loan on time?

It is your responsibility to make sure that you have understood all the terms of a loan before committing to it. Finding the best financial solution depends on individual circumstances and requirements, so it's impossible to give a one-size-fits-all advice on how to choose the right loan. iCASH's services are intended to help you out in the short-term, but should not be used as long-term financial solutions. This means that if you know some money is coming your way, a cash advance or Flexpay loan could be the right fit, but we don't recommend using these types of loans as a permanent credit solution.

Credit History

Credit history contains the details of your financial behaviour, and also takes into account your current debt amount, among other factors. Since it can be easier to harm a credit score than improving it, we recommend keeping a close eye on your credit score.

Your credit history can have a big impact on your borrowing options because many institutions base their loan criteria on this data. If you need any help with your credit, you can visit a credit bureau to find out more about how to improve it. In Canada, the two top agencies you can reach out to are: TransUnion and Equifax.

Budgeting Tips

Budgeting might not be the most exciting concept, but it can definitely help to make life a lot smoother. If you start to feel like your finances are getting hard to control, you can start by creating a simple monthly budget that displays your total income (like salary and benefits you might receive) against bills like utilities, entertainment and housing costs. If you have extra money at the end of the month, this amount can help you decide how much you can afford to put towards your debt, as well as save for new things.

Trying to increase that number of disposable income? You can cut out non-essential expenses like a daily coffee, or ordering in food. Then you can move on to creating a timeline to comfortably afford to buying something that you always wanted to have.

Debt Advice

Depending on the lender and the type of credit, you may be able to reduce your payments, extend the loan period, suspend repayments for a short period, or even repay the loan early (if you have a small amount owing and want to reduce the number of your monthly commitments).

Don't bottle up stress and anxiety about financial problems. There are helpful websites that can providing free advice, guidance and support: