Magical Credit Blog

Not everyone can walk into the local bank and walk out with a loan. In times past, that left people who needed financing and were capable of repaying the balances with few alternatives. In recent years, some non-traditional lenders have stepped up and offered options to these borrowers who would otherwise be forgotten.

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.

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.

Personal loans are nowadays an indispensable part of people’s financial lives. Loans are used to pay for everything from unforeseen medical expenses to legal fees to automobiles and homes. It has been found that 26% of Canadians are planning to take out a loan in 2021 and out of 1200 Canadian adults surveyed 65% had taken out a personal loan in the past.

Cars are something that nearly all of us need to get to work, go to the grocery store or pick up the kids from school. However, automobiles, in general, have recently been edging onto the pricier side with vehicle prices hitting an all-time high in 2021 with the average car topping $40,000 for the first time according to CTV News.

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.

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.