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What Types of Loans are Best for Your Needs?

by Magical Credit

Like people, loans come in all shapes and sizes. Some types of loans are better fit for emergency roof repairs after a tree’s fallen through it, while others are advantageous to fund large expenses like a new car or home.

types-of-loansYou’ve already decided you need a loan. But what loan is best for your current financial position? We’ll break down the most common types of loans in Canada – all of which are available at Magical Credit – and what they’re best for.

Online Loans

Online loans are a great alternative for those that are done with waiting in bank lines, speaking with disinterested bank tellers, and using that gross, communal pen-on-a-chain. An online loan from a reputable lender is a fast, secure, and simple way to get cash fast.

This type of loan offers extreme flexibility and convenience. The convenience side is obvious – there’s no other loan you can acquire sans-pants. Flexibility comes in the form of being able to shop around online for the best loan prices and interest rates.

Getting an online loan is fast, too; most lenders will be able to direct-deposit your loan into your bank account within 24 hours. This makes them a solid choice for emergency financial situations, or if you need cash on the go.

Short Term Loans

The beauty of short term loans is that they’re, well, short. A shorter repayment schedule means less interest accrued over time, and more money in your pocket.

As for the circumstances in which you should consider applying for a short term loan, we suggest utilizing them to facilitate a large purchase that you know you can pay back within a quick timeframe. For example, a short-term loan can cover your summer getaway upfront, which you can then quickly pay over the succeeding months.

Taking out and then paying back a short term loan is also a smart way of giving your credit score a boost, too.

Bad Credit Loans

Speaking of credit scores, it’s a good time to bring up bad credit loans. Like the name suggests, these loans are designed for people with low-to-middling credit scores. They tend to have higher approval ratings than other types of loans, too, making them accessible to a range of borrowers.

But bad credit loans aren’t reserved for people having trouble securing alternative loan types. Paying off a bad credit loan consistently and on time is one of the most dependable ways of improving your credit score.

Payday Loans

Q: When’s the best time to get a payday loan?

A: Never.

There’s really no benefit to getting a payday loan that can’t be found in a less punishing type of loan. These predatory high-interest loans are typically taken out by misinformed borrowers who need to bridge the gap from one paycheque to the next.

But because of their high costs and higher interest rates, borrowers inevitably find themselves slipping down that slippery slope. Once you’ve dug yourself into a payday loan hole, you’ll only dig yourself deeper. There’s a reason why the government strongly discourages consumers from resorting to payday loans, offering their own alternatives to distressed borrowers.

Not sure what type of loan is best for you? Contact us today and we’ll set you up with a suitable loan that aligns with your financial needs.

If you already know what type of loan you need, apply online with us today. Our easy approval application takes no more than 5 minutes to complete.

Loan Example

1 Year
Interest Rate (46.8%)
Total Cost of Borrowing
Total Due End of Term
NOTE: You can pay off your loan at any time with no penalty. You will only pay interest up to the date you borrow it.

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