Fairstone Personal Loan (Secured) Review

Expert review

Fairstone’s secured personal loan acts just like a home equity loan. If you’re a homeowner, you can use your home as collateral to secure your loan and qualify for better interest rates and terms compared to an unsecured personal loan.

It’s worth noting that Fairstone’s secured loans have interest rates starting at 19.99% up to 23.99%, depending on several factors, including your income and credit history. That’s still quite high – other secured personal loan products may come with lower interest rates so borrowers should do their comparison shopping before settling on a Fairstone secured loan.

If you qualify, you can borrow up to $50,000 with terms starting at 60 months up to a decade.

First, do I qualify?

Before applying for a Fairstone loan, you’ll need to make sure you qualify. You must be:

• A Canadian resident, of the age of majority in your province or territory
• Employed, with proof of monthly and yearly income
• A homeowner with home equity already established; Fairstone does not include details on how much home equity you must have to qualify for a loan, but you’ll need to provide your mortgage statements as proof
• Have an active bank account in your name with direct deposit capability
• Have a valid phone number, mailing address and email address

What provinces and territories are these loans available in?

Fairstone’s secured personal loan is available across Canada. Eligibility requirements and necessary documentation will vary depending on the province and territory you live in. Residents in Quebec, for example, must provide their Notice of Assessment issued by Revenue Quebec while the rest of the country only needs to submit their Canada Revenue Agency Notice of Assessment from the past 2 years. Check with your lending specialist when they contact you to ensure you provide the right set of documents with your application.

What makes a Fairstone secured loan unique?

Fairstone’s secured loan is a great product for homeowners who need a chunk of cash via a personal loan but may not qualify via traditional means like banks and credit unions.

Fairstone’s selling point is in its flexibility. Like a home equity loan, homeowners can use their property as collateral to access up to $50,000 in a personal loan that’s repaid over the course of 60 - 120 months. You can use the secured loan to consolidate your debts, cover unexpected expenses, manage costly home repairs and more.

You can also set up automated payments on a day that’s convenient for you, or you can pay with cash, over the phone, online, via cheque, money order or debit at your local Fairstone branch before your payment deadline. Fairstone has over 240 locations across Canada, so there’s likely a branch close by to you, but if you prefer banking from the comfort of your home, your loan can be managed completely online on Fairstone’s customer portal, too.

What are the benefits of a Fairstone secured loan?

If you’re looking for a secured loan, Fairstone is one of many options available to you. It has some key features worth highlighting, including:

• Flexible loan size. Fairstone offers secured loans between $5,000 and $50,000. This limit is higher than that of unsecured loans from Fairstone.
• Fast access to funds. Once you’ve been approved, you should have access to your funds within 1 business day.
• Flexible loan terms. Count on lengthy loan terms of between 5 years and a decade so monthly repayments are lower and easier to manage.
• Flexible repayment options. Fairstone offers you several repayment options, including weekly, fortnightly and monthly repayments. You can also opt to make payments in cash, cheque, money order or direct withdrawal. You can make payments in person at one of over 240 locations across Canada, over the phone or online, too.
• Available across Canada. You can apply for a Fairstone secured loan in all 10 provinces and 3 territories.

What to watch out for

Shouldering more debt is always a risky decision, especially with large-sized personal loans. Here’s what to keep in mind before you take out a secured loan with Fairstone:

• Steep interest rates. Interest rates start at 19.99% right up to 23.99% to borrow with Fairstone, even with your home equity on the line. With a great credit score, you may be able to secure much lower interest rates from traditional lenders and online lenders.
• Additional charges. Applying for a secured loan with Fairstone comes with additional fees and charges for a home valuation, title search and other due diligence steps. Ultimately, your lending specialist needs to ensure your home is valued correctly to decide on how much Fairstone can lend you.
• Your home is used as collateral. Using your home as insurance on your loan can be risky, especially if there’s a chance you could default on your loan. Make sure you’re prepared to shoulder this debt if you’re putting your home equity on the line.
• In-person application. If you’re applying for a secured loan, you’ll need to visit a Fairstone location to submit the necessary paperwork in person. There are over 240 locations across Canada.

How do I apply for a Fairstone secured loan?

If you’re ready to apply for a Fairstone secured loan, follow these steps:

1. Start with an online loan quote by clicking on the “Get A Loan Quote” button on the Fairstone homepage. Indicate how much money you’re looking to borrow and enter details like your full name, phone number, email address, home equity and employment information. Click “Submit”.
2. Receive your personalized loan offer immediately. Fairstone says it will provide an approval decision, including how much you could qualify for and what your repayments may be. You’ll also be sent an email to confirm your loan quote details. There’s absolutely no obligation to take the loan and no impact on your credit score.
3. Shortly after you receive your quote, you’ll receive a phone call from a Fairstone lending specialist to discuss your loan details. Work with your lending specialist to determine the loan amount and repayments that best suit your needs.
4. Finalize your application. Fairstone will ask for a series of documents to verify your identification and your home equity before proceeding. You will need to visit one of Fairstone’s branches to submit your paperwork and sign off on the loan.
5. Receive your funds. After your loan is approved and signed off on, Fairstone will transfer the funds for your personal loan to you within a business day.

What documents do I need?

After you apply for a secured loan, you will need to verify your identity and application details. You will be asked to provide:

• One piece of primary identification. This could include your Canadian driver’s licence, passport or citizenship card.
• Employment and income verification. This could be via pay stubs, your latest T4, or a Canada Pension Plan statement dated within the last 12 months. If you’re self-employed, please provide a CRA Notice of Assessment from the past 2 years.
• Housing information. To verify your mortgage, you’ll need to provide your latest mortgage statement that includes your current balance, monthly payment, payment status and your name and address.

I got a Fairstone secured loan. Now what?

With a hefty sum secured under your belt and your home equity put up as collateral, borrowers need to make sure they work loan repayments into their budget every month. The last thing you want to happen is to default on your loan, putting the roof over your head at risk.

Your Fairstone loan specialist will help you determine how much you’ll qualify for and what loan repayments may look like. Keep in mind that just because you qualify for a larger sum, it doesn’t mean you have to borrow that much money. Only borrow what you need and what you can afford to pay back.

With your loan repayment schedule in hand, decide on whether you’d like to automate repayments so they’re taken directly from your bank account or if you prefer to make payments over the phone or in-person with cash, cheque or money order. Mark your due dates on your calendar and make sure you’ve sorted out repayments ahead of time.

Your Fairstone secured loan is a great opportunity to build up your credit history by making payments on time over the life of your loan.

Bottom line

Home owners have a leg up when it comes to applying for a secured loan because they can use their home equity as collateral. If you need a large sized personal loan, it may be worth looking into a Fairstone secured loan. The loan amounts and repayment options are incredibly flexible, so it’s likely you can customize your secured loan to suit your precise needs.

Typically, secured loans come with lower interest rates. In this case, Fairstone secured loans start at 19.99%. It’s worth doing your homework and comparison shopping between lenders before you decide on a Fairstone secured loan. If your credit score is in great shape and you’re still willing to use your home as collateral, it’s possible that other lenders may be able to offer you lower interest rates.

You can also consider the wider range of personal loan options available to you.

Frequently asked questions

• What can I use my secured loan for?

  Fairstone says you can use the funds from your personal loan for anything you need. One of the most common uses for a personal loan is to consolidate unpaid bills and debts, but Fairstone says that ultimately you can use your secured loan for any of life’s expenses.

• Do I have to pay any fees?

  You will. Loan fees vary across provinces and territories, but the following fees may apply: prepayment fees, home valuation, title search, insurance fees and administration fees.

• How long can I take to pay the loan back?

  Fairstone’s loan terms range from 60 months to 120 months for secured loans.

• Can I pay off my loan early?

  Yes, you can, but you may incur prepayment penalty fees. These fees vary by province so make sure to ask your lending specialist for more information while you iron out the details of your loan.