Loans are getting increasingly more difficult to procure these days, and when you can’t get a loan from banks or your parents, who can you turn to? More and more Canadians are actually resorting to borrowing from alternative lenders and it is becoming more than a trend, it is the future!
The Lending Problem
If you’ve been watching the news, the federal government has come up with some ways to tighten up the Canadian mortgage and lending market in the hopes of preventing a real estate collapse like the one that happened to our neighbour (the U.S.).
Changes such as the additional requirement of third party income verification for those who are self-employed and the capping on the amortization period of mortgages that are CMHC-insured are just some of the efforts made by the government that have placed lending on a leash. This resulted in people seeking out alternative lenders when their parents and/or bank can’t or won’t help, but do you know what are the pros and cons of borrowing from specific types of alternative lenders?
Numerous Options Are Within Reach
The great thing about being in Canada is that there are quite a number of different alternative lending options that are available depending on your personal requirements. You can opt for Pay Day Loans for small amounts, go for online consumer loans for medium-sized amounts, and of course, contact alternative home equity lenders if you need a sizable loan amount.
You may want to do your research first before going for a Pay Day Loan as most payday lenders have rates that are pretty steep, making as much as 250% of the original loan amount for loans that weren’t paid within 14 days (and these are loans that are only a couple of hundred dollars).
If you need just a few thousand dollars, let’s say about $10,000, then online consumer loan companies can offer you some help but keep in mind that interest rates can go as high as 35%.
If you’re a homeowner, then you can get loans from alternative lenders who cater only to homeowners like yourself. Alternative lenders can approve you for your first, second, and third mortgages with the help of professionals such as Toronto mortgage brokers. The obvious advantage is that you can probably borrow more and get less interest than both Pay Day Loans and online consumer loans, isn’t that much better?
You may also read up on home equity loans to be more familiar with what you will get yourself into should you choose the 3rd option.
How Homebase Mortgages Can Help
We can help you get a home equity loan approved quickly and with less fuss. All you have to do is to contact us so that we can help and guide you with your loan application. Our team of lending specialists will help you understand your alternative lending options, answer all your questions, as well as help you decide on what might be the best solution for your needs.