Installment loans in BC

If you’re a British Columbia resident with not-so-great credit and you need access to funds without putting up collateral, an installment loan could be the right option. You have several choices for installment loans in BC, and the loan amounts, interest rates and terms can all vary among lenders. Keep reading to learn more and to compare your options.

What is an installment loan?

The term “installment loan” can be a source of confusion for some people because technically, any loan that you pay back in installment payments over time is an installment loan – that includes auto loans, mortgages, personal loans and student loans.

In this case, however, “installment loan” refers to a specific type of personal loan with shorter loan terms, smaller loan amounts and potentially higher interest rates than the average personal loan. Installment loans in BC are unsecured loans offered by online lenders, so you don’t need to put up an asset as collateral.

Features of installment loans in BC

• Loan amount. The range is usually between $500 and $10,000.
• Loan term. Installment loans are typically repaid within 6 months to 5 years.
• Interest rates. The maximum interest rate a lender can charge for an installment loan in BC is 60%, but the typical range is between 8% and 47%. Interest rates depend on personal factors such as your credit score. The higher your credit score, the lower your interest rate.
• Fixed rate. The interest rate is fixed and will stay the same throughout the loan term.
• Set repayment schedule. You’ll have an amount you’ll pay regularly throughout your loan term. Some lenders may let you choose the frequency of your payments, such as weekly, bi-weekly or monthly.
• Bad credit is considered. If you’re looking for installment loans in BC for bad credit, some online lenders offer loans to borrowers with a credit score below 560.
• Fast approval and funding. You can usually get an installment loan within 1 to 3 business days.

What to watch out for

• Interest rates. Interest rates can be steep, especially if you have bad credit.
• Guaranteed approval. Steer clear of installment loan lenders in BC who guarantee approval. Before giving approval, a responsible lender will first examine your finances to make sure you can repay the loan.
• Upfront fees. Legitimate lenders do not ask for upfront fees. If there are fees, they usually come once the loan has been issued.
• Insurance add-ons. Do not let yourself be pressured into buying insurance for the installment loan. Loan insurance adds to the cost of the loan.

How to compare installment loans in BC

With so many choices out there, how do you choose which installment loan you should sign up for? Below are some factors to consider.

• Loan amount. Check the lender’s minimum and maximum loan amounts so you know whether it can fund you the amount you need.
• Interest rates. Try to lock in a low interest rate by comparing lenders and asking them to price match. To find out the true cost of an installment loan in BC, pay attention to its annual percentage rate (APR), as you may encounter lenders who highlight their monthly rate instead of annual. APR is the annual rate of interest and fees charged to borrowers, and legally that rate can’t be higher than 60%.
• Length of term. The longer the term, the more you’ll pay in interest. But the shorter the term, the more you’ll fork out for monthly payments. Your goal is to get the shortest loan term possible, but you don’t want it to be so short that you can no longer afford the payments.
• Repayment flexibility. Some lenders let you pay back your installment loan early without paying any penalties.
• Fees. Check whether the lender charges fees like origination fees (fee to process your loan) or late payment fees.
• Reputation. Read reviews online to see what other people have to say about the lender’s services.

How much will installment loans in BC cost me?

The cost of your installment loan depends on the loan amount, the loan term and interest rate. Let’s say you need a loan to pay for urgent dental bills. You decide to borrow $3,000 and commit to paying it back over 3 years with a 19.99% interest rate.

Based on these factors, you can expect to pay back $111.48 per month, which amounts to $1,013.12 in interest charged for a total cost of $4,013.12 for your installment loan.

What do I need to apply for installment loans in BC?

Eligibility criteria

You will need to meet the following basic eligibility criteria:

• Be at least 19 years old.
• Be a Canadian citizen or resident.
• Meet the minimum income (varies among lenders).
• Meet the minimum credit score (varies among lenders).
• Have an active bank account.

Documents required

• Proof of income. This doesn’t mean you need to be employed full time, but you may need some sort of income, whether it is disability, a pension or a part-time job. You will need to provide pay stubs or bank statements.
• Valid government-issued ID. Lenders might ask to see your driver’s licence to verify that you meet the age requirements.

Steps to apply for installment loans in BC

1. Choose a lender. Choose a lender based on its loan amounts, interest rates, fees, eligibility requirements and reputation. Remember you’re not just limited to lenders with physical locations in BC. You can also choose from reputable online lenders.
2. Fill out the application. You’ll need to provide basic personal and financial information, such as your phone number, address, birthdate, employment and income.
3. Wait for pre-approval. Most online lenders will use technology to swiftly determine whether they can approve you or not.
4. Get verified. If the lender wants to approve you and you want to sign with them, provide more information, such as proof of identity (i.e. government-issued ID) and proof of income (e.g. pay stubs, tax returns, bank statements)
5. Get approved. The lender will provide final approval if everything checks out. Sign the contract after reviewing its terms and conditions.
6. Get your funds. Online lenders typically send funds within 24 hours.

Bottom line

Installment loans in BC are an option for those who do not qualify for a bank or credit union loan. Keep an eye on interest rates when comparing installment loans, especially if you have poor credit, because the lower your credit score, the higher your interest rate. Before applying, make sure you meet the lender’s eligibility requirements, and before signing the contract, make sure you review the fine print and understand the costs of your loan.

Frequently asked questions about installment loans in BC

• What interest rates do installment loans in BC have?

  Interest rates depend on a borrower's personal factors, but the range is typically between 8% and 47%.

• Can I apply for installment loans in BC with bad credit?

  Yes, some lenders of installment loans can finance borrowers with bad credit (below 560). Lenders often list their eligibility requirements, so check that you meet them before applying.