At its core, personal instant loans Canada require nothing more than an excellent credit score and proof of income to secure one. While getting one may seem straightforward, there are steps you can take to select an ideal personal loan and improve your approval odds; these could vary depending on whether or not you need debt consolidation loans, loans for bad credit, home improvement loans, medical loans or wedding loans.

1. Understand Your Credit Scores

To get an accurate picture of personal loan annual percentage rates (APRs), begin with knowing your credit score. Personal loan APRs typically range from just under 8 percent up to 35.99 percent depending on your score - 801+ puts in excellent category while 580 and below will generally fall in bad.

Bad credit makes loan approvals more challenging. Higher APRs mean higher payments; lenders may limit or require you to repay the loan faster.

Conversely, having a higher credit score gives you the best opportunity for lower personal loan rates and larger loan amounts, with repayment terms that could reach seven years as opposed to the standard five years offered to those with lower scores.

Tip: Checking one or more of your credit scores free with one of your creditors may be possible.

Subsequent Steps: 

• Be prompt when paying your bills: Your payment history has the most significant effect on your credit score.
• Stay on top of your balances: Pay down or off all credit card balances as quickly as you can, to reduce the overall utilization ratio (CUR) on each of your cards and improve your score. Maxing out cards reduces credit utilization ratio and improves scores; maxed-out cards lower score.
• Avoid opening new accounts: Every time you apply for new credit, your score takes a temporary hit, so try and limit how often new applications for online installment loans occur if possible.

2. Crunch the Numbers

Before applying for a loan, carefully calculate how much money you need. This decision will have an impact on the interest rate offered, monthly payment amount and total origination fees charged by lenders.

Once you know your loan amount, use a personal loan calculator to do some calculations. Experiment with longer payment terms if your goal is lower monthly payments or shorter ones if paying the balance off quicker is your priority.

Tip: Don't forget fees in your loan calculation! Personal loan lenders may charge origination fees of up to 10 percent of what you borrow, which will usually come out of your funds later. By including these costs upfront, padding your loan amount could save time later by helping avoid having to reapply more than once for additional costs coverage.

Next Step: Research various personal loan lenders online to gain an idea of their rates and terms, then use an accurate personal loan calculator to get an accurate idea of your monthly payment amount.

3. Review Lender Requirements and Collect Documentation

Once you decide how much to borrow, it's important to understand what will it take for a personal loan lender to approve it. Each lender may have unique approval requirements that must be fulfilled in order to approve you as a borrower; in turn they collect various documents to assess any risk involved with taking you on.

Personal Loan Qualification Requirements

Lenders typically evaluate your credit score, income and debt to determine if you meet qualification criteria for personal loans for bad credit. Some may also take into consideration your work history and education background when making their decision.

• Credit Score and Report: Most lenders for personal loans require fair or good credit; however, there may still be options available to those with poor or no credit. 
• Collateral: While most personal loans are unsecured, some lenders offer secured options as collateral against which your rate could be slightly reduced; such collateral might include your car, jewelry or fine art collection.