What are $1,200 Loans?

A $1,200 loan refers to a specific amount that individuals can borrow, typically in the form of a short-term loan. These personal loans may be unsecured, meaning they don't require collateral, and can be obtained online through various lenders, including payday lenders and credit unions. The loan amount, credit score, and interest rates are key factors influencing eligibility and terms. Individuals with bad credit may still qualify, as some lenders consider factors beyond the minimum credit score requirement. It's essential to assess monthly income, credit reports, and financial situations before considering such loans to ensure affordable monthly payments and avoid unexpected expenses.

Features

1. Credit Score. While some lenders may have a minimum credit score requirement, individuals with bad credit can still explore options, including lenders who consider factors beyond a traditional credit check with major credit bureaus.

2. Unsecured Loan. These loans are often unsecured, meaning they do not require collateral. Borrowers are not obligated to provide assets as security.

3. Interest Rates. Interest rates can vary among lenders. It's crucial to compare rates offered by different financial institutions, credit unions, and online lenders to secure the most favorable terms.

4. Monthly Payments. Borrowers should consider their monthly income and budget to ensure that the loan's monthly payments are affordable. Some lenders offer flexible repayment terms.

Pros and Cons

Pros

Cons

How to Get a $1,200 Loan?

Apply for a Loan

1. Evaluate Your Financial Situation. Before applying for a $1,200 loan, assess your current financial situation. Consider your monthly income, expenses, and the purpose for which you need the loan.

2. Check Your Credit Score. Know your credit score as it plays a significant role in loan eligibility. While some lenders may consider individuals with bad credit, a higher credit score can often lead to better loan terms, including lower interest rates. Obtain a copy of your credit report to review your credit history.

3. Research Lenders and Loan Options. Explore various lenders, including traditional financial institutions, credit unions, and online lenders. Compare the terms, interest rates, and repayment options offered by different lenders.

4. Gather Necessary Documents. Most lenders will require certain documents during the application process. Gather necessary paperwork, including proof of income (pay stubs or bank statements), identification, and any other documents specific to the lender's requirements.

5. Apply Online or In-Person. Once you've selected a suitable lender, initiate the application process. Many lenders offer online applications, making it convenient to submit your information from the comfort of your home. Provide accurate details about your financial situation and follow the application instructions.

Requirements and Conditions

Requirements

1. Age. Borrowers must be at least the age of majority in their province or territory, which is typically 18 or 19 years old, to be eligible to borrow $1,200.

2. Employment Status. Many lenders prefer borrowers who have held a full-time job at the same location for at least three to six months. However, some lenders may not require proof of employment, making it accessible to a broader range of applicants.

3. Income. A steady paycheck is ideal for loan eligibility, but some lenders may accept other income sources such as government benefits, part-time work, or self-employment, provided there is a minimum income requirement.

4. Identification. To confirm age, identity, and residency status, borrowers will likely need to provide a piece of government-issued photo ID, such as a passport or driver’s license.

5. Personal Information. Borrowers need to provide other personal details, including their phone number, email, and Social Insurance Number (SIN), as part of the loan application process.

6. Banking Details. Lenders may request bank statements from the last 90 days and online banking information for funding purposes. This helps them assess the borrower's financial stability and suitability for the loan.

7. Financial Details. Most lenders will ask for the latest paystubs to verify the borrower's income. Additionally, applicants should be prepared to provide details about their assets and existing debts, giving lenders a comprehensive view of their financial situation.

Conditions

1. Interest Rates. Lenders will specify the interest rate associated with the $1,200 loan. It's important to understand whether the interest is fixed or variable and how it will impact the overall cost of borrowing.

2. Repayment Terms. The repayment terms outline the duration for repaying the $1,200 loan. It could range from a few months to several years, depending on the lender's policies and the type of loan.

3. Fees and Charges. Borrowers should be aware of any fees associated with the loan, such as origination fees, late payment fees, or prepayment penalties. Understanding these charges helps in evaluating the total cost of the loan.

4. Collateral. Depending on the type of loan, lenders may require collateral for security. Unsecured personal loans typically don't require collateral, but secured loans might involve using assets like a car or property to secure the loan.

5. Application Process. Understand the application process, whether it's done online or in-person. Some lenders may offer a quick online application with a same-day funding option, while others may have a more extensive approval process.

Best Places to Get a $1,200 Loan

1. Easyfinancial is a financial services company in Canada that offers personal loans, including small-dollar loans. They focus on providing loans to individuals with varying credit histories.

2. iCash is an online payday lender in Canada that offers short-term loans, including payday loans. They provide a quick and convenient application process with same-day funding options for approved loans.

3. Mogo is a Canadian financial technology company that provides a range of financial products, including personal loans. They offer an online platform for loan applications and emphasize a user-friendly experience.

4. Money Mart is a well-known financial services company in Canada, offering a variety of financial products, including options like fast emergency loans. They have physical locations as well as an online platform for loan applications.

Ways to Receive the Money

1. Direct Deposit. Direct deposit is a commonly used method where the loan amount is transferred directly into the borrower's bank account. This is a quick and convenient way for borrowers to access the funds, and it's often used by online lenders.

2. Cheque. Some lenders may opt to send a physical cheque to the borrower. The borrower can then deposit the cheque into their bank account or cash it as needed.

3. Electronic Funds Transfer (EFT). Electronic Funds Transfer involves electronically transferring the loan amount from the lender to the borrower's bank account. This is similar to direct deposit and is often used for online transactions.

4. Interac e-Transfer. Interac e-Transfer is a popular method in Canada that allows lenders to send funds directly to the borrower's email address or mobile phone number. The borrower can then deposit the funds into their bank account.

Things to Pay Attention to

1. Interest Rates. When considering a $1,200 loan, carefully examine the interest rates associated with the loan. This is crucial for understanding the overall cost of borrowing and ensuring it aligns with your financial situation.

2. Loan Terms. Review the loan terms, including the duration for repayment (loan term). Different lenders may offer varying terms, so choose one that suits your budget and preferences.

3. Credit Check. Be aware of whether the lender conducts a credit check, especially if you have a bad credit score. Some lenders specialize in bad credit personal loans, while others may have strict credit requirements.

4. Fees and Origination Fee. Understand the fees associated with the loan, including any origination fees. These fees can impact the total amount you need to repay, so factor them into your budget.

5. Repayment Terms and Monthly Payments. Carefully review the repayment terms and the monthly payments required. Ensure that the monthly payment is manageable within your monthly budget to avoid missed payments and additional fees.

6. Lender Credibility and Guaranteed Approval. Research the credibility of the lender, especially if they claim "guaranteed approval." While some lenders may be more flexible with credit requirements, be cautious of overly optimistic promises and verify the legitimacy of the lender.

How to Repay a $1,200 Loan?

1. Understand Terms. Familiarize yourself with the repayment terms, including the loan term, interest rates, and any fees associated with the $1,200 loan.

2. Set Up Auto-Payments. Consider setting up automatic payments to ensure timely repayment. This helps avoid missed payments and potential late fees.

3. Budget Wisely. Incorporate the monthly repayment amount into your budget. Ensure it aligns with your monthly expenses to avoid financial strain.

4. Prepay if Possible. If you have the means, consider making extra payments or paying off the loan early to reduce overall interest costs.

5. Communicate with Lender. In case of financial difficulties, communicate with the lender promptly. Some lenders may offer flexible solutions or hardship options.

Reasons for Getting Rejected for a $1,200 Loan

1. Credit Situation. A poor credit situation, including a low credit score or a history of missed payments, can lead to rejection, especially for unsecured personal loans.

2. Income Requirements. If the borrower's income doesn't meet the lender's minimum requirements for the desired loan amount, it may result in rejection.

3. Credit Check Loans. Lenders conducting a credit check may deny the loan if they find significant negative information on the borrower's credit report.

4. Many Online Lenders. Applying for loans with multiple online lenders simultaneously may raise concerns and result in rejection, as it could be seen as a sign of financial instability.

5. Consumer Proposal. If a borrower has entered a consumer proposal, indicating a formal agreement to repay debts, some lenders may consider it a risk factor and reject the loan application.

Alternatives

1. Payday Loan Alternatives (PAL). Consider exploring payday loan alternatives, often provided by credit unions or community-based organizations. These alternatives may offer more favorable terms and lower interest rates than traditional payday loans.

2. Vehicle Title Loans. If you own a vehicle, a title loan is an option where you use your vehicle as collateral for the loan. However, be cautious with this option, as defaulting on payments can lead to the loss of your vehicle.

3. Credit Cards. Utilizing a credit card can be an alternative to a $1,200 loan. Credit cards provide a revolving line of credit, and if used responsibly, they can offer flexibility for managing expenses. However, be mindful of interest rates and potential debt accumulation.

4. P2P Lending. Peer-to-peer (P2P) lending platforms connect borrowers with individual lenders. This alternative allows for more personalized lending terms and may be suitable for those looking to borrow smaller amounts like $1,200.

Editorial Opinion

Important

How to Choose a Lender

1. Make sure to confirm whether the lender is licensed to operate in your province. You can verify this information with your state regulator or attorney general.

2. Check if the lender is a member of a reputable association, such as the Canadian Lenders Association (CLA). Membership in such organizations may provide an extra level of reliability.

3. Carefully review all the terms and conditions of your payday loan contract.

4. Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.

5. Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.

6. Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.

Methodology

At Finanso, we've carried out a comprehensive analysis of over 70 lenders, assessing them based on 35 different parameters across six key categories: accessibility of loans, customer relations, quality of service, interest rates, and transparency of conditions.

In each category, we carefully considered the most critical factors in selecting a lender. These factors include the interest rates, available loan amounts, minimum credit score, minimum income, application fees, and the speed at which funds are transferred.

At Finanso, we highly value our users, which is why we also focus on the quality of customer service, user reviews, and additional features that can aid our users in making a well-informed decision.

Our ultimate goal is to provide insightful recommendations and expert advice to assist you in selecting a lender that best caters to your specific needs.