An astonishing number of Canadians are living paycheque to paycheque and utilize payday loans. When you are down on your luck and need money fast, a payday loan may appear to be your best option.
Take a pause though! That payday loan may cost you almost 600% in annual percentage rates and throw your finances into a never-ending tailspin of interest payments and a lot of pain.
There are much better lending options available in Canada and you can access them easily online. Even if you have a bad credit score, you could qualify for a personal loan and save hundreds to thousands of dollars while you work to get your financial life back on track.
LoanConnect is Canada’s premier online platform for unsecured personal loans and installment loans. Using their innovative search engine, you can find a loan that matches your needs and at a reasonable cost in 5 minutes or less.
This LoanConnect review covers what you need to know.
What is LoanConnect?
LoanConnect was launched in 2016 and is Canada’s top location for sourcing loans at competitive rates regardless of your credit rating. They are located in Toronto, however, you can access their website anywhere in Canada to apply for a loan.
The maximum loan amount available on their platform is $50,000 for a period of 6 to 60 months. Rates vary from 4.6% APR to 46.96% APR, depending on your credit history.
How To Apply For a Loan With LoanConnect
Finding a loan when your credit is damaged can be tough. The banks are generally wary about providing loans if your credit score is in the poor to fair category.
While payday loan shops are always open for business, their loans come with a catch – ridiculous high annual percentage interest rates that leave you poorer.
Companies like LoanConnect provide a middle ground. They give borrowers access to lenders who are comfortable with a wide range of credit profiles (including bad credit) and who do not require collateral.
To apply for a loan, simply click here, answer some basic financial questions, and confirm your loan amount. Their search engine matches you up with a preferred and suitable lender in a few minutes and you are then directed to that lender’s website to complete your application.
A majority of their lenders offer instant approval which means you can have cash-in-hand (i.e. in your bank account) in as little as 12 hours.
The basic requirement to apply for a loan through LoanConnect Canada is that you must be at least the age of the majority in your province (over 18 or 19 years old) and be a Canadian citizen or permanent resident.
What Types of Loans Are Available?
Canadians can apply for a loan for any purpose using LoanConnect. As per their website, some of the loan types available include:
- Debt consolidation loans
- Emergency loans
- Bad credit loans
- Business capital loans
- Home renovation loans, and more.
The interest rate you pay varies depending on how the lender assesses your creditworthiness.
In general, you will pay an annual percentage rate (starting from 4.6%) that is significantly lower than what payday loans like MoneyMart and CashMoney will charge you (up to 600% APR depending on your province).
When you take out a loan with one of LoanConnect’s lenders, you can cut your interest fees further by making extra payments and paying off your debt quickly.
There is no limit to the additional payments you can make so you can get out of debt and improve your credit rating.
Is LoanConnect Legit?
LoanConnect is a legitimate company with a mission to make it easier for Canadians to access money when needed. They are accredited by the Better Business Bureau and have an A+ rating. On TrustSpot, they hold a 9.7/10 TrustScore.
How Do They Make Money?
LoanConnect is a business, so how do they make money?
Lenders pay them a flat fee when they refer new borrowers through their online platform. You do not pay any fees directly to LoanConnect.
What is Considered “Bad Credit” in Canada?
Your three-digit credit score is a reflection of how lenders assess the risk they face when they lend you money. In Canada, a credit score is a number between 300 and 900.
Generally, a score below 560 may be considered as bad to poor credit; 560 to 659 is fair; 660 to 724 is good; 724 to 759 is very good and above 760 is excellent.
A bad to poor credit score means you will pay a higher interest rate when you apply for a loan if at all you are approved.
Loan Alternatives When You Need Cash Fast
If you encounter an emergency and need cash fast, here are some of the options available to you.
The Bank: If your credit score is in the very good to excellent category, you could qualify for a loan at your bank and get a highly competitive rate. If your cash needs are minimal, you could even look at going into overdraft on your chequing account and paying the associated fees.
Credit Card: You could use part of the credit limit on your credit card and pay it back as soon as possible. Regular card interest rates are in the 16.99% (for purchases) to 24.99% range for cash advances.
A 0% transfer credit card may also come in handy if you qualify. This option is useful for consolidating credit card debt and provides relief on interest payments for 6-9 months. A transfer fee may apply.
LoanConnect: LoanConnect links you up with trusted lenders who have been thoroughly vetted by them. You can borrow up to $50,000 and the interest rates are much lower than what you pay for payday loans.
Some of the lenders on their platform include Borrowell, Easy Financial, Lending Arch, Consolidated Credit, and many others.
My review of LoanConnect is positive. As an alternative to payday loans when you have bad to fair credit, their innovative service can help you find a personal loan that comes in handy and does not keep you in a vicious cycle of debt.
If you are in over your head in debt, taking on more high-interest loans may not make financial sense, and you should approach a credit counsellor for advice.
Loan Connect Review: Unsecured Personal Loans in Canada
Loan Connect is Canada’s leading platform for finding unsecured loans at the best rates regardless of whether you have bad credit or good credit. This review covers all you need to know for obtaining a loan fast in Ontario and elsewhere in Canada.