There are different types of financing, including installment and auto loans and cash advances. Traditional and online banks and finance companies offer unsecured loans. Loans are reserved for creditworthy customers with solid income.
Products Available
Borrowers can choose from different types of loans, depending on the purpose and amount required. Banks and car dealerships offer auto financing to borrowers who plan 
to buy a vehicle. The repayment schedule, interest rate, and fees vary, and it pays to shop around. Banks also offer loans to full- and part-time students enrolled in accredited institutions. Government student loans come with lower interest rates and deferral options. While there are different types of loans, the main difference between secured and unsecured debt is the presence of collateral. Financial institutions in Canada look at factors such as level of indebtedness and credit standing. Borrowers with a history of bankruptcies and defaults are risky candidates.
Options for Borrowers with Poor Credit
Individual and payday lenders and finance companies offer loans regardless of the borrower’s credit standing. Payday lenders offer short-term loans with extremely high rates, ranging from $100 to $3,000. People who need quick cash between paychecks resort to cash advance loans. Borrowers usually resort to payday loans to pay urgent expenses such as medical and hospital bills. Payday lenders have more lenient criteria, and it is easier to qualify. The fact that the interest rate is very high makes payday loans an expensive way to borrow. A cash advance is a short-term solution, and another option is to apply for a secured loan. When applying for a secured loan, banks require proof of residence and income.
Supporting Documentation
There are certain documents to enclose, including recent telephone and electricity bills, latest salary slips, etc. Other documents include tax statements, residence permits, and an application form. Self-employed individuals may have to present additional documents. Banks also offer unsecured business loans and require verification of business and non-business income, business leases, and other documents.