How to compare credit options for your household

Choosing credit for a household expense starts with two questions: how much do you need, and how will you repay it? An offer described as personalized can still be a poor fit if its payments arrive when your account is already stretched.

Compare the type of credit before comparing individual offers. A fixed loan and a reusable credit account work differently, even when both could cover the same bill. This guide concerns household borrowing. NovaCash publishes a $300 to $2,000 CAD fast online loan, not a separate product called personalized credit.

Start with the expense

Write down the full cost and whether it is known or still an estimate. A one-time invoice is easier to plan around than an expense that continues to grow. If you are borrowing because ordinary bills repeatedly exceed income, first list the recurring shortfall and seek help reviewing the budget.

Check whether the supplier offers a payment arrangement and what it costs. Compare that written arrangement with credit, including any effect on service or the purchase. Extra time can be useful only if the later payment is manageable.

Understand the main options

• Personal loan: you borrow a set amount and repay according to a schedule. The FCAC personal loan guide explains the main features and cost considerations.
• Line of credit: you can borrow within an approved limit. Check the rate, required payments and how you would reduce the balance rather than keep using the available room.
• Existing credit card: read the terms for the transaction you intend to make. Purchases and cash advances can have different costs and payment rules.
• Overdraft: check the approved limit, fees and interest before relying on it to cover a temporary account shortage.

Availability is personal to your situation and the provider's assessment. Existing access to credit does not mean the full limit is affordable.

Compare cost and repayment together

For each option, record the amount received, rate, fees, payment dates and expected total repayment. With reusable credit, choose a realistic payoff plan so you have something meaningful to compare with a fixed loan schedule.

Look at what happens when the budget changes. Is the rate fixed or variable? Does the required payment reduce the principal enough for your plan? Are there recurring fees even while the balance is shrinking? Ask the provider to explain unclear terms.

The Quebec consumer protection office's borrowing guidance provides a useful reference when reviewing a money-loan offer.

Place NovaCash in the comparison accurately

NovaCash uses instant bank verification, or IBV, in its application review. Published criteria include age 18 or older, Canadian citizenship, at least $1,200 a month by direct deposit, employment for more than three months, no bankruptcy in progress and ability to repay.

Self-employment, social assistance, child tax credits, student loans and retirement savings are excluded. Read the eligibility criteria and income exclusions before considering this option. If an income source is unclear, contact (877) 431-4134.

NovaCash's monthly membership fees belong in the cost comparison. The calculator's six-month illustration excludes those fees; use the actual offer for its schedule and total cost.

Move from comparison to an offer

Once you have identified a suitable type of credit, examine the specific terms. Our guide to assessing a tailored loan offer focuses on that next decision: whether the amount, costs and payments offered work for you.