Can I apply for a personal loan during the COVID-19 pandemic? Should I?
Updated: Feb 18
For many Canadians, the COVID-19 pandemic has resulted in un- or underemployment, unexpected expenses, and an uncertain financial future. Here's up-to-date information by iCapital on personal loans and other borrowing options.
Not surprisingly, we’ve received numerous inquiries about personal loans in recent months so we want to share the most up-to-date information and resources to help you get the assistance you need. Read on for more about our personal loans.
Is a personal loan the right solution? A personal loan is a lump sum delivered quickly and paid back in instalments over time. There is no restriction on what you can use the money for so you’re free to repay other debts and pay down expenses while you secure new sources of income. Personal loans are usually charged interest at far better rates than a credit card or through a seller, so they’re popular for financing large purchases or consolidating debt. Immediate, flexible, and low interest, personal loans may well be the best choice to get you through the pandemic. Getting a personal loan if you are employed If you are employed and need a loan of between $5,000 and $50,000, iCapital may be able to help. Our rates start at 9.99%, we offer flexible repayment terms, you can expect an answer to your application within 24 hours. Eligibility requirements include a credit score of at least 600 and proof of three months of continuous employment. Getting a personal loan if you are unemployed or underemployed If you’ve lost hours or even your job, there are still options available to you. Working with the Government of Canada, several banks have made the commitment to work with Canadians who have experienced COVID-19 related challenges such as:
pay disruption due to COVID-19
childcare disruption because of school closures
illness from COVID-19
The participating banks are:
Bank of Montreal
National Bank of Canada
Royal Bank of Canada
If you’re facing short-term financial stress, the Canadian Government recommends speaking with your bank about relief on certain credit products, fee waivers, or specific supports for seniors and people with disabilities. If applicable, you can also discuss mortgage deferrals.
Should I take out a second mortgage? At first glance, a personal loan and second mortgage seem indistinguishable but they're not. While they do offer some of the same benefits like receiving money in a lump sum and payment in instalments, they differ in terms of the paperwork involved, fees, and amount of time they take to apply for. For more detail, read our blog post on this topic. If you’re looking for financial help during COVID-19, a personal loan may well be the best option and depending on your employment status and credit score, iCapital might be able to help.
The information above on personal loan options has been provided by iCapital.