Savings loan is a unique way to build up your credit score and is the perfect way to opt for loans and interest rates that are low.
Reasons why you might need a savings loan
In Canada, there are a number of times when a person is denied a loan owing to that person’s credit score being non-existent or poor. Moreover, the only choice of credit for such people is secured credit, whereby the amount of credit requires to be already paid for. If you are amongst those people who have a bad credit score or who do not have enough money to opt for a secured credit in the first place, then savings loan is the perfect choice for you. In order to avail other modes of credit, like a credit card and also have low rates on interest on the credit that you take, having a good credit score is a must. Savings loan allows you to build up your credit score by letting you pay certain stipulated amounts to a savings account on a monthly basis and reporting the activity to the bureau of credit, who in turn increase your credit score. If you are somebody who requires your credit score to be increase, a savings loan is a great choice.
Benefits of savings loan
Some of the benefits of taking a savings loan have been listed below.
- Helps you build your credit score- Savings loan highlights the fact that you are able to make monthly payments and have the intent to do the same, thereby increasing your credit score and making you eligible for taking other variants of credit at a low rate of interest.
- You build up your willpower to save- Savings loan enables you to get on track with developing the necessary skills that are required for saving. It is a commitment that you make and it helps in building up your willpower for saving.
- You end up with saving a considerable amount of money- The money that is left after your period of payment gets over is yours completely and you can use it in whatsoever way you like.