Unsecured
Loans

Unsecured Loans in Canada

Lenders that offer unsecured loans also have minimal requirements. That's why you'll notice that many companies only approve loans of small value, ranging from a couple of hundred dollars to a couple of thousand dollars.

Unsecured borrowing is one of the most common types of loans acquired by Canadians today. And there are a couple of reasons why.

Unsecured loans are extremely easy to apply for. If you need to borrow money without security, you can apply for a loan with banks, credit unions, or even direct lenders. In most cases, money lenders are a better choice for applying for a cash loan if you have a poor credit score.

Many online lenders will approve your application even if you have poor credit. While most reputable short-term lending companies do run a credit check, they do it to validate the information provided during the application.

Unsecured loans in Canada can be split into different types. Here are three different ways they are categorized as:

So how do unsecured loans work? Just like any other type of loan, lenders look at your monthly income and other simple requirements to assess your eligibility for the loan. If you meet all requirements, you may be approved for a loan for as little as $100 up to $5,000, depending on the lender you choose.

Secured vs. Unsecured Loans

All types of loans or borrowing fall under two main categories: secured vs. unsecured loans.

The main difference between these two types of borrowing options is the use of collateral. But what do we mean by collateral? In lending terms, collateral is anything of value that the borrower pledges as security to the lender, to secure repayment of the loan.

When lenders issue a loan that is secured, they do so based on collateral. This means, if the lender is unable to pay back the loan, the lender can sell the guarantee to get their money back. Because the lender is using security, they don't look at the borrower's credit score or creditworthiness.

However, if we compare unsecured loans, as indicated above, lenders don't ask for a guarantee from the borrower. Instead, they look at other factors and heavily base their processing decision on the borrower's credit score.

Comparing Secured vs. Unsecured Loans

There are clear differences between these two types of borrowing options — the table below compare unsecured vs. secured loans:

Types of Unsecured Loans

To better understand unsecured borrowing, it's important to distinguish between the most common types of unsecured loans.

Small personal loans are one of the most popular types of unsecured loans. In this category, borrowers who need cash urgently can apply for a small loan with a traditional or private direct lender to cover their expenses. This type of loan can also be identified as unsecured loans without a guarantor, which means that borrowers can apply for a loan without having someone cosign and take responsibility for paying back the loan.

The opposite of this classification is unsecured guarantor loans, where you have to provide someone to cosign with you on the loan at the time of application. Certain unsecured lenders require you to have a cosigner, someone to take responsibility for and pay back the loan, in case you aren't able to.

Credit cards are another common type of unsecured loan, which is a revolving account that allows Canadians to borrow money. Credit cards are an integral part of building your credit score and maintaining creditworthiness.

Personal installment loans are also short term loans that let you borrow money and pay back gradually over time. This type of loan works for those who are taking out a higher loan amount and may need some time to pay it off, instead of repaying it in one go. It also makes sense to seek out this type of loan if you have limited income and don't want to stretch your monthly expenses further.

Student loans are another category of unsecured loans. While most Canadians apply for a student assistance program, specific individuals may need to pay their tuition fees themselves, such as mature students or those who are upgrading their skills from private institutions.

And lastly, there's an option of an unsecured line of credit. This is a form of revolving credit, which allows the borrower to draw funds up to a limit. It's similar to a personal credit card because it will enable you to borrow funds as needed, without having to take the full amount in one lump-sum payment. This type of loan should be reserved for more significant expenses, although it can be difficult to acquire one from the bank.

Out of these, the most sought out are small personal loans. Although traditional lenders such as banks and credit unions offer this type of loan, many Canadians turn to private lenders to apply for these small loans due to the ease of application and instant approval.

Quick Unsecured Loans

Online lenders allow Canadians to borrow up to $1,500 with quick unsecured loans. Because of the high demand, many online direct lending companies are popping up in Canada.

You can either visit a storefront or apply online using a secure application. Direct lenders have become more popular recently because they provide convenience and easy access to fast loans to borrowers.

There are certain advantages to applying for fast unsecured loans:

You don't need to provide an asset, such as your car, to apply for an instant unsecured loan. Certain lenders take a look at your income instead of your credit report to give you a fast loan.

Quick unsecured loans are flexible, so you can use your loan for any reason, and don't have to specify it to the lender, unlike secure loans where the lender will only give out a loan for certain things such as purchasing a home.

Usually, these loans have a fast application process. You can apply for an e-Transfer loan 24/7 from anywhere using their online application system. All you need is access to the internet and enter a few personal identification details.

When you need quick cash, unsecured borrowing is the best option. There are a couple of common ways to use fast unsecured loans.

You can use them to pay for bills and monthly expenses until your next paycheck. If you are short on cash until your next payday, these fast loans can help you manage cash flow issues.

Owning a significant asset, such as a car or home, comes with its own set of risks. One of the biggest ones is encountering a sudden expense. If you don't have any savings set aside for emergency expenses or bills, yet need to make an urgent home or car repair, you can apply for an unsecured cash loan.

Whether new or old, things can break down quickly. If you find the need to repair your home or car due to an unforeseen circumstance, in this situation, quick loans can be a lifesaver.

Also, quick unsecured loans may help you deal with medical emergencies. For example, physiotherapy or dental treatments need to be paid by individuals directly in Canada. If you don't have insurance to cover these kinds of procedures, you are required to pay for them. In these cases, you can take out an express loan to pay for these kinds of expenses.

No one plans to be in a tight financial situation, so when Canadians find themselves in need of help, they turn to direct lenders to find short-term solutions to fix their problems.

Apply for a Small Unsecured Loan

iCASH offers small unsecured loans to Canadians who need cash right away.

Here's a quick breakdown on how to get a small loan with us:

Online Application:

Sign-up for an account with iCASH. It only takes a couple of seconds. Most direct private lenders have available an online application process. You only need to have access to a reliable internet connection.

Once you create an account, you'll be asked to provide certain details. With minimum requirements and paperwork, you can get your hands on a fast and easy loan within 10-15 minutes.

Instant Decision:

After submitting your application, your application is reviewed by our automated software, and a credit check is performed. We don't offer small loans with no credit check. However, our process is fast, so that you can receive an approval decision in minutes.

Funding:

Once you get approved, you will need to sign your loan agreement and send it back to us. Within minutes, your funds will be sent via e-transfer.

Repayment:

iCASH offers multiple repayment options* either in the form of a single lump sum or up to three installments, depending on the province you reside in. To repay your loan, you will need to provide us with the authorization to withdraw the funds directly from your bank account on your due date.

When applying for a small, unsecured loan through us, you can get your funds within minutes. It's fast, easy, and secure!