Personal Loans

A personal loan is a type of loan that allows you to borrow a fixed amount of money which you repay over a set period of time with interest.

Personal loans can be used for various purposes, including consolidating debt, covering unexpected expenses, making large purchases like a car or home improvements, funding vacations, or covering medical bills.

When you take out a personal loan, you receive a lump sum of money upfront, which you repay in fixed monthly installments over a predetermined period, typically ranging from one to eight years. The interest rate on the loan may be fixed or variable. With a variable interest loan, the fixed payment may be adjusted if the rate fluctuated, and interest owing is greater than the fixed amount.

• Competitive interest rates
• Fixed monthly payments for easy budgeting (see FAQ 3 How do personal loans work?)
• Flexible repayment frequencies
• Fast and efficient application process
• Creditors insurance protection available subject to eligibility and approval (insurance not required for all personal loans)

Generally, eligibility requirements include having a steady source of income, a good credit score, and a low debt-to-income ratio. Collateral may be required for larger loan amounts or if your credit history is less than stellar.

The amount you can borrow with a personal loan depends on factors such as your creditworthiness, income, debt-to-income coverage and UCU’s lender policy.

A personal loan can be a good option if you need a lump sum of money for a specific purpose and have a good credit history. Consider your financial situation and repayment ability before applying.

A secured personal loan requires collateral, such as a property, a vehicle or cash deposit to secure the loan, which reduces the lender’s risk and may result in lower interest rates. An unsecured personal loan does not require collateral but may have higher interest rates because of the increased risk to the lender.

The approval time for a personal loan at UCU can vary depending on your individual circumstances. However, we strive to make the process as efficient as possible. Our team will work diligently to review your application and get back to you promptly.

To apply for a personal loan, you may need to provide:

• proof of identity
• proof of income such as pay stubs, letter of employment or tax returns
• proof of address such as a utility bill

You can pay off your personal loan early at UCU. Generally, loans are open for prepayment after 30 days.

Missing a payment on your personal loan can result in late fees, a negative impact on your credit score, and additional interest charges. If you’re having trouble making payments, it’s crucial to contact us as soon as possible to discuss potential solutions, such as a payment deferral or loan modification.

UCU recognizes the financial needs of an international student and we have products that may help you finance the cost of your education in Canada.

Here’s what you’ll need to consider:

• UCU Membership: To be eligible for a UCU personal loan, you’ll need to become a member. Becoming a member is a simple process and you can apply online.
• University Enrollment: UCU personal loans for international students are available for those accepted and enrolled in an accredited Canadian university or college.
• A co-signer or a guarantor may be required.

In Canada, a co-signer is not always required for a personal loan. However, having a co-signer with a good credit history can improve your chances of getting approved and potentially qualifying for a lower interest rate.

Here are some of the factors lenders consider:

• Your Credit History: A strong credit history with a good credit score increases your chances of getting approved without a co-signer and may qualify you for a more favourable interest rate.
• Income and Employment: Demonstrating a stable income and employment history helps lenders assess your ability to repay the loan.
• Debt-to-Income Ratio: This ratio compares your total monthly debt payments to your gross monthly income. A lower ratio indicates a better ability to manage additional debt.

Here are some scenarios where a co-signer might be beneficial:

• Limited Credit History: If you’re a new borrower with a limited credit history, a co-signer with a strong credit score can improve your application’s strength.
• Lower Income: If your income is lower than the lender’s typical requirements, having a co-signer can help demonstrate your ability to repay the loan.

Personal loans can be a tool to consolidate debt, potentially saving you money on interest and simplifying your payments by bringing everything into one manageable monthly sum. However, this approach hinges on qualifying for a lower interest rate than your existing debts and requires discipline to avoid adding more debt with the readily available credit from the loan.