Robert Palumbo • Sep 16, 2015
If you’ve recently been investigating your personal loan options, you may have discovered that there is a new way to borrow money in Canada – online lending. What is the difference between online lending and traditional bank lending? How does online lending work? Whether you’re looking to consolidate your debt, or are simply in the market for a better and more convenient borrowing option, it’s important to understand your options.
For decades, borrowers in Canada had just one option: knocking on the doors of the big banks to see if they qualified for a loan. This ‘brick-and-mortars’ process could take weeks, and many times borrowers were not approved for a loan or at a rate that was far too expensive. Instead of taking a loan, many Canadians found it easier to access consumer credit using their credit card as a borrowing tool (often at rates from 19.9% to 29.9%). Today, Canadians have gotten so used to borrowing on their credit cards that the Canadian credit card debt level stands at $83 billion! With the advent of online lending, there is now a fairer and faster way to access funds conveniently.
If you do a quick search of ‘online lending’ on Google you will likely find a swath of high-interest ‘payday’ lenders. For the uninitiated, payday lenders service lower credit quality borrowers. They offer extremely high interest rates (up to 599.9% APR) making the loans expensive short-term options. In fact, a payday loan is the most expensive consumer loan available in Canada. Payday online lenders frequently have a lack of clear disclosures and may profit from hidden fees and getting customers deeper into debt. To learn more about payday lenders check out this article from Consumer Protection Ontario.
On the other end of the spectrum, prime online lenders like Borrowell couldn’t be more different from a payday lender. Borrowell features lower rates (from 5.6% APR), convenient service, and transparency in the form of clear terms and no hidden fees. Unlike payday lenders who target people with poor credit, Borrowell serves good credit Canadians who may be seeking better alternatives to higher interest credit cards and inconvenient bank loans. By offering low rates, and fast, fair and friendly service, Borrowell has focused on creating a loan that aligns our interests with our customers’. Prime online lenders like Borrowell succeed when customers succeed, not when they get deeper into debt.
Prime online lenders such as Borrowell.com use proprietary and industry-leading technology to securely compile thousands of personal and financial data points. This ‘big data’ feeds into financial algorithms that assess lending risk in order to instantaneously provide loan quotes. This process is so fast that many borrowers can’t believe it when they see their loan options. Next, prime online lenders use cutting-edge technology to verify your identity, your income, and other important details in order to confirm that you qualify for the loan. The entire process happens online and can be completed in a matter of minutes. Even the bank account funding and the loan document signature process happens online. Online lenders make it possible to take a loan at any hour of the day, right from the comfort of your own home. Learn more about Borrowell here.
Canadian borrowers are now able to instantaneously access the money they need, at lower interest rates than their credit cards or other high interest debt. More and more Canadians are using online technology-driven lenders such as Borrowell (personal lending).
If you’re in the market for a personal loan, or looking to pay off credit cards, you can’t go wrong with online lending
In this Borrowing 101, we’ll give you an overview of credit cards. You can also see other introductions to personal loans, lines of credit, and mortgages to help you understand how they work, when to use them, and what to be careful of.
The Borrowell Team
Apr 27, 2020
It's always good to know what you can do to improve your credit score, no matter where you are on your financial journey. Whether you’re looking to rebuild your profile or planning a big purchase in the future, increasing your score can mean more attractive interest rates and offers on things like credit cards, loans, mortgages and lines of credit.
The Borrowell Team
Mar 01, 2020
Borrowell® is a registered trademark of Borrowell Inc. All Rights Reserved. The Equifax credit score is based on Equifax’s proprietary model and may not be the same score used by third parties to determine your credit profile. The score provided to you for educational use is the Equifax Risk Score.
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