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The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Parachute Review

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About lender

Parachute is a lender based in Toronto, Canada, dedicated to providing financial well-being to Canadians dealing with debt. They offer debt consolidation loans, specifically tailored to help individuals consolidate high-interest loans with rates over 30%. With Parachute, consumers can apply for up to $25,000 to consolidate their debts, provided they have a credit score of 600 or more. By consolidating debts, individuals can feel financially secure and in control of their finances, as they end up with one easy monthly payment.Parachute

Features

  • Debt Consolidation Loans. Parachute offers debt consolidation loans, allowing individuals to consolidate multiple high-interest loans into one manageable payment.
  • Borrow Up to $25,000. Customers can apply for loans of up to $25,000, providing flexibility to address various debt obligations.
  • Paying Debt Off Directly with Lenders. Parachute facilitates the process of paying off debts directly with lenders, streamlining the consolidation process for customers.
  • Mobile App. Parachute provides a mobile app for convenient access to account information, repayment tracking, and personalized financial insights on the go.

Pros and сons

Pros

Simplified Loan. Parachute offer a simplified loan process, allowing individuals to consolidate their debts into one monthly payment, with a single payment date and typically a lower interest rate. This simplification can make managing finances easier for borrowers.

Large Amounts. Borrowers have the opportunity to borrow up to $25,000 based on approved credit, providing flexibility to address various debt obligations or financial needs.

Rewards and Cashback. Parachute offer rewards and cashback incentives for borrowers who accomplish certain goals or tasks outlined in their repayment roadmap. This incentivizes better financial behavior and provides additional benefits to borrowers.

Cons

Steeper Rates. If the borrower's current debts are not high-interest loans, they may find that other lenders offer lower starting rates. Parachute may not be the most cost-effective option for individuals with lower-interest existing debts.

No Customer Reviews. Parachute lacks customer reviews on reputable review sites such as Google or Trustpilot, which may make it difficult for potential borrowers to assess the lender's reputation and customer satisfaction.

Strict Eligibility Criteria. Parachute have strict eligibility criteria, including a minimum credit score of 600 and a minimum annual income of $30,000, among other requirements. This may limit access to their services for some individuals who do not meet these criteria.

Reliability

The company, registered as a legitimate business (#722537800), has a permanent office address in Toronto and has garnered attention from investor platforms like PitchBook and CB Insights. Additionally, Parachute has received backing from venture capital firm Highline Beta, further solidifying its credibility. However, it's worth noting that as a relatively new company, having launched in May 2022, Parachute may not yet have an established social media presence or online reviews.

How to apply for a Parachute loan

  1. Visit the Parachute Website. Open your web browser and navigate to the official website of Parachute loans.

  2. Click "Apply Now". Locate the "Apply Now" button on the website's homepage and click on it to initiate the application process.

  3. Enter Personal Information. Fill out the required fields with your name and email address. These details are essential for creating your account and communicating with you throughout the loan application process.

  4. Indicate Desired Debt Amount. Specify the amount of debt you wish to consolidate. This step helps Parachute determine the appropriate loan amount for your financial situation.

  5. Income Verification. Confirm whether your annual income exceeds $30,000. This information helps Parachute assess your financial capacity to repay the loan.

  6. Credit Score Check. Declare whether your credit score is 600 or above. Your credit score plays a significant role in determining your eligibility and the terms of your loan.

  7. Citizenship Status. Verify whether you are a Canadian citizen or a Permanent Resident of Canada. Parachute loans are typically available exclusively to Canadian residents.

  8. Bankruptcy History Inquiry. Disclose whether you have ever been bankrupt or filed a consumer proposal. This information is necessary for assessing your creditworthiness and eligibility for a loan.

  9. Navigate to the Next Step. Click on the "Next" button to proceed to the next stage of the application process.

  10. Provide Contact Information. Enter your phone number, ensuring that it is accurate and up-to-date. This step allows Parachute to contact you for further verification or communication regarding your application.

  11. Complete the Form. Follow the instructions and complete the application form by providing any additional required information or documentation. Be thorough and accurate to expedite the loan approval process.

Conditions

    • Loan Amount. Parachute offer loan amounts ranging from $5,000 to $25,000, providing flexibility to address various financial needs and debt consolidation requirements.
    • Loan Term. The specific loan term for Parachute loans is not disclosed, as it may vary depending on individual circumstances and loan agreements.
    • Interest Rate. The interest rate for Parachute loans is not specified upfront, and it may vary based on factors such as creditworthiness, loan amount, and repayment terms. Potential borrowers are encouraged to discuss the interest rate with Parachute team members during the application process.

    Requirements

    • Age Requirement. Applicants must be at least 19 years old to be eligible for a Parachute loan.
    • Citizenship or Residency. Applicants must be Canadian citizens or permanent residents residing in Ontario to qualify for a Parachute loan.
    • Employment and Income. Applicants must be employed and have a minimum annual income of $30,000 to meet the income requirement for a Parachute loan.
    • Active Bank Account. Applicants must have an active Canadian bank account to facilitate loan disbursement and repayments.
    • Credit Score. Applicants must have a credit score of at least 60 to be considered eligible for a Parachute loan. A higher credit score may increase the likelihood of approval and may result in more favorable loan terms.
    • Financial History. Applicants must not have any history of bankruptcy, consumer proposals, or judgments on their credit bureau report. A clean financial history demonstrates financial responsibility and may enhance eligibility for a Parachute loan.

    Ways to receive the money

    You will receive the borrowed amount from Parachute through a direct transfer to the financial institution that holds your high-interest debt. Parachute simplifies the debt payout process by sending the loan funds directly to this financial institution to pay off your loan balances. It's important to note that no funds are sent directly to your bank account; instead, they are disbursed to your existing creditors to consolidate your debts effectively. This approach ensures that the borrowed amount is used specifically for debt consolidation purposes, helping you achieve better financial stability and peace of mind.

    Products

    Parachute specializes in offering debt consolidation loans as their primary product. These loans are designed to help individuals manage and streamline their debts effectively by consolidating multiple high-interest debts into a single, more manageable loan. Through their debt consolidation loans, Parachute aims to empower consumers to take control of their finances, improve their financial behavior, and achieve better financial outcomes.

    Reasons you may be denied a Parachute loan

    • Low Credit Score. If your credit score falls below the minimum threshold set by Parachute, typically 600 or higher, your application may be denied. This reflects concerns about financial behavior and creditworthiness.
    • Insufficient Income. Parachute requires applicants to have a minimum annual income of $30,000. If your income does not meet this requirement, your application may be denied as it indicates a lack of financial capacity to repay the loan.
    • History of Bankruptcy or Consumer Proposals. If you have a history of bankruptcy, consumer proposals, or judgments on your credit report, Parachute may deny your application. This indicates financial instability and poses a higher risk for the lender.
    • Inconsistent Financial Behavior. Parachute assesses applicants' financial behavior, including patterns of borrowing and repayment. If your financial behavior demonstrates inconsistencies or irresponsibility, such as missed payments or frequent credit inquiries, your application may be denied.
    • Failure to Meet Eligibility Criteria. If you fail to meet any of Parachute's eligibility criteria, such as citizenship or residency requirements, employment status, or age restrictions, your application may be denied.

    How to repay a Parachute loan

    1. Direct Debit Arrangement. Payment is arranged through direct debit, which allows funds to be collected automatically from your bank account. This ensures timely and convenient repayment.

    2. Frequency Options. You have the flexibility to choose from different repayment frequencies, including monthly, semi-monthly, or bi-weekly. This allows you to align your repayments with your income schedule and financial behavior.

    3. First Repayment Schedule. Your first repayment is typically scheduled to be debited one calendar month after you accept your loan. This gives you time to prepare and ensures a smooth transition into the repayment phase.

    Editorial opinion

    In the realm of debt consolidation loans, Parachute emerges as a viable option for individuals seeking to streamline their financial obligations. With its emphasis on promoting better financial behavior and offering a data-driven app to aid in decision-making, Parachute empowers consumers to make informed choices about their finances. While the prospect of cash-back rewards and a rebate system may excite some, it's essential to explore the terms thoroughly to avoid any hidden fees or the burden of a high interest rate. Through its approach that combines education, support, and a focus on safety, Parachute endeavors to provide a service that caters to the diverse needs of everybody. By registering with Parachute, individuals can establish a relationship built on trust and transparency, fostering hope for a brighter financial future. Ultimately, Parachute serves as an example of how innovative solutions can positively impact lives, offering insight into navigating the complexities of the financial world with confidence and peace of mind.

    Important

    Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

    How to Choose a Lender

    1. Verify that the lender is registered with the appropriate regulatory authorities in Canada, such as the Financial Consumer Agency of Canada (FCAC), or is licensed to operate in your province.
    2. Check if the lender is a member of reputable industry associations in Canada, such as the Canadian Bankers Association (CBA) or the Canadian Lenders Association (CLA).
    3. Thoroughly review all terms and conditions outlined in your loan agreement. Understand the repayment schedule, interest rates, fees, and any penalties for late payments or defaults.
    4. Ensure that the contract clearly states the annual percentage rate (APR) and the total cost of borrowing, including any administrative fees or additional charges.
    5. Familiarize yourself with your rights regarding loan cancellation or early repayment. Canadian consumers have the right to cancel a loan within two business days after signing the agreement, without penalty.
    6. Research the lender's reputation by checking customer reviews, complaints, and feedback on reputable online platforms, as well as through resources provided by organizations like the Better Business Bureau (BBB).

    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.

    Additional resources

    Sources

    FAQ

    What is Parachute?

    Parachute is a financial service provider specializing in debt consolidation loans, aiming to improve consumer's finances through better financial behavior and offering better choices for managing debt.

    How quickly the funds can be received?

    Upon approval, funds from Parachute can be received promptly, typically within a few business days, facilitating quick access to financial relief for addressing debt consolidation needs.

    How do you qualify for Parachute?

    To qualify for Parachute, individuals need to demonstrate better financial behavior, meet the eligibility criteria, and register with the company, ensuring a step-by-step approach that combines education and support throughout the loan process.

    How much can you borrow from Parachute?

    Parachute offers debt consolidation loans with varying borrowing limits up to $25,000, providing individuals with the opportunity to address their financial needs effectively and borrow an amount suitable for their circumstances.

    Is Parachute a legitimate company?

    Yes, Parachute is a legitimate company operating within the financial industry, offering debt consolidation loan options and providing valuable support and insights to customers, ensuring their financial well-being and peace of mind.

    At Parachute we truly believe financial well-being should be accessible to all Canadians. Our three step program empowers, educates, and rewards our customers. We offer the only loan where someone can leave with more savings than when they started.

    © White Hat Financial Inc.
    Financial products
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