Loans, credit cards, and other lines of credit can be a huge help when you need money urgently or generally to pay for anything you cannot afford to buy outright. Loans such as a mortgage, auto loan or personal loan are used for larger expenses such as buying a house or car, higher education, or even a wedding. Your credit card, lines of credit, or small loans can help with minor purchases such as that new gadget you have your eye on, a fun night out, a well-deserved shopping spree, or that much-needed vacation.
However, you might not be able to qualify for any kind of loan if you have a poor credit score or credit rating. What is a credit score? Your credit score or credit rating is calculated based on your credit history (that is, how you pay back your loans and lines of credit). It can fall anywhere between a range of 300 to 900. Scores of 600 and above are good, while those above 760 are excellent.
The logic of your credit score is a simple one. If you are diligent about your loan payments, your credit score or credit rating is affected positively, and will grow. If you are not, it will fall. A low credit score makes it difficult to get a loan and when you are still eligible to borrow, your loan will come with high interest rates or heavy penalties.
So, what do you do if your score is low? How do you get a fresh start and a chance to rebuild your credit score? The answer is the Innovation Fresh Start Loan! With the Fresh Start Loan, you can improve your credit rating and build your savings at the same time. It truly allows you to get the financial start or re-start that you deserve.
What kind of loan is Fresh Start Loan?
A Fresh Start Loan is a personal loan with a fixed interest rate that you can choose to pay back for a minimum of 6 months or a maximum of 2 years. You can borrow from $2,000 to $5,000.
How does the Innovation Fresh Start Loan work?
With a Fresh Start Loan, you do not get your funds instantly. Instead, the money lent to you is put into a Guaranteed Investment Certificate (GIC). As you start repaying the loan, making sure your payments are on time, you’ll begin building your credit score. At the same time, you will also be earning interest on your GIC which grows your savings. Plus, you could also get certain tax benefits, depending on the type of GIC you invest in. Talk about a win-win!
Once your loan is paid off, you can keep the cash invested or use the funds as you please.
What are the benefits of the Innovation Fresh Start Loan?
As we’ve seen above, the Innovation Fresh Start Loan comes with multiple advantages. Let’s take a closer look at the host of benefits you can enjoy.
You can build your credit rating or improve your credit score:
Since it is your loan repayment behaviour that determines your credit history, which in turn influences your credit score or rating, our Fresh Start Loan can help to create proof that you are a trustworthy borrower. How? Well, when you take a Fresh Start Loan, you can ensure that all your loan payments are on time. This way your loan repayment behaviour shows improvement, leading to a better credit score in the future. What does that mean for you? You will be able to get loans and lines of credit that much more easily in the future. Like the name says, a Fresh Start Loan will give you a fresh start when it comes to writing or rewriting your credit history and thereby improving your credit score. It’s a great step to take to set up your future self for success.
You can qualify for the cash you need:
When you take a loan, it’s usually because you need help with some purchase or expenditure. However, if you have a poor credit score or credit rating, it becomes very difficult to get a loan. With a Fresh Start Loan, not only do you get a chance to improve your credit score, but you can get approved for the funds you need.
You can get a jumpstart on your savings:
Developing a savings habit is one of the best things you can do for your financial well-being. Savings provides financial security and access to funds in case of an emergency. However, it can be difficult to start saving, especially when some investments call for a $1,000 minimum deposit.
With a Fresh Start Loan, you’ll receive $2,000 to $5,000 to more than cover any minimum deposit. This money is then locked in a GIC for a period of 6 months to 2 years. With each loan payment, you’re putting money towards eventually “owning” that investment. This requirement will help you get used to the discipline of savings and remind you of the benefits of investment interest.
Earn interest on your investment:
As your loan amount is in a GIC, you will earn interest on your investment. So by the end of the loan term (or deposit term in this case), you will end up with the initial loan (investment) amount, plus the interest you’ve earned!
Earn cash dividends as an Innovation member:
When you are a member of Innovation Federal Credit Union, you automatically get enrolled into the Innovation Member Rewards program. The more you bank with us the more benefits you earn. You’ll enjoy profit sharing dollars simply by having a loan with us. Through our Member Rewards program, we’ve paid members approximately $46.8 million since 2007.
You get the loan you need. You build your credit rating. You earn interest on your investment plus cash dividends. You can see how a Fresh Start Loan would be attractive to many people! So, are you eligible to apply?
Am I eligible for the Innovation Fresh Start Loan?
Here are some of the main eligibility criteria to be able to apply for the Innovation Fresh Start Loan
- You either have no credit score or a credit score no lower than 541. However, there are some exceptions when your credit score is between 520-540. Contact us for details.
- You can have a maximum GDS of 35% and a maximum TDS 45%. Learn more.
- You should not have any prior write-offs held with Innovation.
- All your collections on record must be paid.
- Consumer proposals/bankruptcy must be discharged.
- You need to have a Fresh Start letter with signature as part of your loan documentation.
- You need to have your income verified as per lending guidelines.
Now that you know all about the Fresh Start loan including loan details, benefits and eligibility criteria all that is left to do is apply. Go ahead, give yourself and your finances the fresh start you need. Learn more about Innovation Fresh Start Loans or contact us to speak our financial advisors today to get your credit score up and explore your loan and credit options.