Magical Credit Blog

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How Can Bad Credit Affect Your Mortgage?

Mortgages have become a necessity in the life of anyone aspiring to own a home as real estate prices have soared across population-dense urban zones such as those of the Greater Toronto Metropolitan Area. Mortgage borrowing has reached an all-time high with 63% of Canadian families owning a home as of the 2016 Canada Census whilst the percentage of those who have paid off the mortgage on their principal residence has declined to 43% from 46% in 1999.

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Bank Loan Alternatives

Walking into a bank to discuss opening a credit account under your name may sometimes feel like a soldier marching into war. No one is denying that credit is necessary to live our daily lives by doing everything from paying the bills during tough financial months or to covering unforeseen legal and medical expenses. However, keeping the right balance is crucial to maintaining your financial stability.

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Credit Mix Explained

In today’s world, it’s hard to get by without taking out a loan every now and then. Whether it’s for a credit card, an automobile loan or a mortgage, our modern lives demand access to easy credit. On the other hand, credit is a double-edged sword in more ways than one. While enabling us to purchase far more than we could before, it has also opened up more pathways to insolvency for many struggling with the financial burden.

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How to Borrow Money Wisely

Borrowing money isn’t always the easiest decision. Many lenders offer large lump sums available for withdrawal which are quickly followed by large interest rates and fees if you prematurely pay off your loan. According to Statistics Canada, the household debt ratio to disposable income across the nation has risen to 170.7% as of the third quarter of 2020. Increasing costs of living have made this trend inevitable with the pandemic dealing a huge blow to Canadians in both their livelihoods and job security.

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Our loans are considered short-term loans and have a 12-60 month term with a fixed interest rate of 3.9% per month.

Example: $1,500 borrowed for one year at 3.9% per month. Monthly payments are $199.05. Total payback with interest and fee of $194.00 is $2,388.54.

NOTE: You can pay off your loan at any time with no penalty. You will only pay interest up to the date you pay it off.