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Personal loans in Nova Scotia
Get a personal loan even whether you have good or bad credit.
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If you need access to money in a hurry, a personal loan can provide you with anywhere from $500 to $50,000. They can be used for any legitimate purpose, from paying for car repairs to covering unpaid bills. But before applying, you’ll need to compare your personal loan options to find the best deal for your needs.
Are personal loans legal in Nova Scotia?
Personal loans are legal in Nova Scotia, and lenders can legally charge up to 60% in interest. Payday loans, on the other hand, are limited to a maximum charge of $17 in fees per $100 borrowed.
Here’s the basic facts about personal loans in Nova Scotia:
- Typical Term: 6 – 60 months
- Amount borrowed: $500 – $50,000
- Interest rate range: 6% to 47%
- Maximum interest: 60%
- Types of loans: Secured or unsecured; fixed rate or variable rate
Types of personal loans
- Secured. Secured personal loans involve using an asset you own, such as your house or investments, as collateral. They tend to have lower interest rates because you reduce the lender’s risk by offering collateral.
- Unsecured. As the name suggests, an unsecured personal loan does not involve collateral. They tend to have high interest rates than secured personal loans.
- Fixed rate. With this loan, you get a fixed interest rate, which means your payments stay consistent throughout the loan term.
- Variable rate. This loan’s interest rate fluctuates with the markets, which impacts your repayments.
Where do I find personal loans in Nova Scotia?
- Banks. Banks are a solid option for borrowers with good to excellent credit. They usually offer the best interest rates but tend to have a more involved application process. It takes 1 to 4 weeks to get a personal loan from a bank.
- Credit unions. Like banks, credit unions offer competitive interest rates. However, you might need to become a member in order to apply for a loan. It takes 1 to 4 weeks to get a credit union loan.
- Online lenders. Online lenders are faster to fund loans than banks and credit unions. You can get an online personal loan within 1 to 3 business days. This group tends to be your best bet if you have bad credit – or no credit at all – as they have more flexible lending criteria. Compare online lenders now.
- Peer-to-peer lending platform. With a peer-to-peer lending platform like goPeer, your loan is funded by everyday Canadian investors, and you may be able to get a lower interest rate than what you get from banks if your finances are strong. A peer-to-peer personal loan takes around 1 to 2 weeks.
How to compare personal loans
Keep these factors in mind when you’re searching for a personal loan:
- Amount. Loan amount varies from lender to lender. Some max out at $10,000, while others max out at $50,000. Banks and credit unions can fund larger loan amounts than online lenders or peer-to-peer lenders.
- Loan term. Loan term usually ranges from 6 months to 5 years, sometimes longer. The longer the loan term, the more interest you pay overall.
- Interest rates. Compare interest rates before agreeing to a personal loan. People with bad credit will end up paying higher interest rates. Your aim is to get the lowest interest rate possible and the shortest loan term while still being able to manage your monthly payments.
- Other fees. Don’t fixate solely on the interest rate. Check whether the lender charges extra fees, such as an origination fee (admin fee to process your loan), penalty charges for late payments or prepayment penalties for paying off your loan early.
Personal loan costs in Nova Scotia
Lenders in Nova Scotia can charge a maximum of 60% interest on personal loans according to federal law. While this is the maximum, most lenders charge between 6% to 47%, and you can typically save money by borrowing from your bank or a credit union. Online lenders tend to be more expensive, but you may be able to find one charging rates on par with your financial institution.
Comparing providers
Interest rates depend on your credit history as well as what type of loan you’re taking out (secured or unsecured) and the type of lender you borrow from. The example below illustrates the overall cost of a $5,000 loan over a 36-month term with four different providers.
| Lender | Interest rate | Monthly amount | Total cost |
|---|---|---|---|
| Credit union | 7.84% | $156.31 | $5,627.27 |
| Bank | 11.99% | $166.05 | $5,977.72 |
| Online lender | 19.99% | $185.79 | $6,688.53 |
| Peer-to-peer lender | 9.5% | $160.16 | $5,765.93 |
In this example, a credit union is the least expensive option. This is why it pays to compare a number of different options before settling on a provider.
How can I apply for a personal loan?
You can typically apply for a personal loan either in person or online. If you decide to borrow online, you can submit an application in as little as five minutes, and may be approved almost instantly. Applying at a physical location may take a little longer. Before applying, be sure you meet the eligibility requirements and gather the necessary documents.
Can you get no credit check loans in Nova Scotia?
It’s possible to get a no credit check loan. Instead of examining your credit, lenders will focus on your income – how much you get regularly and how stable it is. But no credit check loans often come with very steep interest rates; since lenders don’t know your credit score, they will err on the side of caution and assume it’s bad.
If you’re concerned that your credit score is too low to allow you to qualify for a loan, your best bet would be to look into a lender that specializes in bad credit loans. This type of lender can approve borrowers even with bad credit. Compare personal loans for bad credit.
How can a personal loan in Nova Scotia benefit me?
People often use personal loans to cover unforeseen, large expenses or to consolidate high-interest debts at a lower rate. In addition, personal loans are frequently used to help borrowers build their credit scores, particularly if the lender reports on-time payments to the credit bureaus.
If you want to take out a personal loan, only borrow as much as you’ll be able to repay in full by the deadline. You should always try to make your payments on time to avoid additional charges and fees and make sure to communicate with your lender if you’re having difficulty making your payments. If you default, your loan will be sent to collections and you may receive a negative mark on your credit score which can stay there for up to seven years.
How can I tell if a lender in Nova Scotia is legit?
The best way to make sure a lender is legit is to check their credentials with Service Nova Scotia. Look for the following signs to make sure you’re working with a reputable business.
- The lender displays a Nova Scotia licence number. A licence is required to be displayed in-shop by the lender, and you can also contact Service Nova Scotia to check if a lender is licensed.
- It provides contracts in the language you use to speak with your lender. Your lender can’t provide a contract in a language you don’t speak or aren’t comfortable conversing in. If you communicate in French, the contract will need to be in French.
- It follows rate and fee regulations. Stay away from lenders who charge more than 60% interest on personal loans.
Watch out for unlicensed lenders
Online lenders can be a fast and convenient option to deal with short-term financial difficulties. Just be aware that they come with their own share of risk, since they’re often not regulated by the province of Nova Scotia.
- Illegally high interest rates or fees. Some lenders will charge rates above 60% interest, which means they are not complying with regulations in Nova Scotia. Compare 3 – 4 providers to make sure you find the best deal on your loan.
- Identity theft. Online lenders might misuse your personal information, putting you at risk of identity theft or a hacked bank account.
- Funds taken from your bank account without your permission. Unlicensed lenders have been known to illegally withdraw money from customer’s bank accounts to help cover the cost of loan payments.
Online lenders often operate outside of the province – or even the country – making it difficult to track their movements or prosecute them if they do something illegal. That’s why it’s so important to make sure your lender is licensed to operate in Nova Scotia before you borrow.
How to file a complaint against a lender
You can contact Service Nova Scotia to discuss your options for filing a complaint. They will typically conduct an investigation if they believe that a personal loans company has breached Nova Scotia’s consumer protection laws.
Personal loan alternatives in Nova Scotia
If you’re struggling to make ends meet every month, then a personal loan might not be the right option for you. Check out some of these low-cost alternatives before you head to your nearest lender.
Nova Scotia assistance programs
Nova Scotia has a number of programs that can provide some much-needed relief for residents and newcomers who are struggling to make ends meet.
- Income assistance program helps people in financial need with basic needs such as food, rent, utilities like heat and electricity, and clothing.
- Affordable Housing program provides subsidized rental housing to low-income families, seniors and individuals who cannot afford other housing options.
- Employment Support Services (ESS) offers career counselling advice and assistance to people who are struggling to find or maintain employment.
- Disability Support Program (DSP) gives support to individuals with intellectual/physical disabilities or long term mental illness.
Credit counselling
If you have an overwhelming amount of debt and aren’t sure how to reign in your finances, you might like to register for Service Nova Scotia’s Debt Assistance Program or another credit counselling program. These not-for-profit programs are designed to help low-income residents stay afloat, while managing and consolidating their debts.
Bottom line
If you’re looking for a fast and convenient solution to a short-term financial problem, then a personal loan might be the right fit for you. Make sure to shop around to find the best deal and consider other options if you don’t think you can meet your repayment terms. Compare personal loans.