GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Personal Loan


Synonyms:common loan, consumer loan, loan
Filed Under: financial-banking, mortgages
Tags: banking, mortgage
 

Definition of personal loan

personal loan
1. A loan made for personal, family, or household purposes as opposed to a business loan or a long-term mortgage loan used to finance real estate purchases.

Related Terms and Acronyms:

  • borrow   To get a loan of money.
  • consumer credit   Loans for personal use as opposed to business or commercial lending. These loans are typically unsecured and not backed by collateral.
  • home equity line of credit (HELOC)   An open-ended loan, paid as revolving debt, that is backed by the equity in the property.
      ➥  Also known as a Home Line of Credit.
  • line of credit (LOC)   A commitment by a financial institution to lend up to a specified maximum amount to a customer during a specified period of time.
  • loan   Letting another party use something of value temporarily.
  • unsecured debt   Debt that is not guaranteed by the pledge of any collateral. Most credit cards are unsecured debt, which is a main reason why their interest rate is higher than other forms of lending, such as mortgages, which employ property as collateral.
  • unsecured loan   An advance of money that is not secured by collateral.

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Important Tip on Credit Card Debt
Credit card interest rates average at around 18.9 per cent. You, like many other Canadians, may have over ten thousand dollars charged to your credit card, but, if you only make the minimum required monthly payment of 2 per cent ($200 the first month) that $10,000 in credit card debt will ultimately take more than 57 years and cost around 40,000 dollars to fully pay off.

Using a home equity loan will allow you to eliminate the high interest credit card (and by eliminate we mean cut up) and consolidate the debt to a low interest rate mortgage payment.
 
Below is a listing of our most popular mortgage product inquiries made using our online mortgage application for clients in Bolton.

Mortgage Product Type Inquiries
Refinance/Consolidate Debt25.00%
Mortgage Pre-approval17.86%
First-time Home Buyer14.29%
No Money Down discontinued12.50%
Mortgage Renewal12.50%
New Purchase7.14%
Other10.74%