With over 200 branches in Canada, Fairstone Financial is one of the largest high street lenders. Unlike most other of these lenders, however, they do not dabble in payday loans or deal with anybody with bad credit. This is the company that you go to if you are a bit beyond payday loans, but are certain a traditional bank may not be for you.
In this Fairstone personal loan review, we are going to run you through the various personal loan products the company offers. We want to establish whether this is a good company to work with and, perhaps more importantly, whether it is the right lender for you.
An overview of Fairstone Financial Products
Fairstone Financial only offers loan products. This means personal loans, mortgages, business loans, and debt consolidation. Honestly, it is a surprise that they do not have any credit card products as those would seem to fit into Fairstone’s business model perfectly.
Since Fairstone only deals with lending, they are pretty experienced at it. They know whether people can afford their loans or not. They want to be paid back, so with Fairstone, you aren’t ever going to feel like you are being pushed into a high-interest loan that you will barely be able to keep up with. This is something that we really love about the company. They actually do seem to care about who they are lending to, unlike some of the more predatory lenders currently cropping up in Canada.
While they do have a website (where you can start the application process for most of their financial products), the ultimate signing of the loan agreement will always take place in one of their 200+ branches scattered throughout the country. You may want to check whether you have one nearby before you start applying for one of their loans as it is a rather in-depth process.
Fairstone Personal Loan Review
In this part of our Fairstone Financial review, we are going to tell you everything you need to know about Fairstone Financial’s personal loan products. This way, you can get a feel for whether this lender is the right one for you or not.
Who are these loans for?
Fairstone loans are designed for those with average credit. If you apply for Fairstone loans, then you probably have better credit than those applying for payday loans (or other similar high-interest loans). But at the same time, your credit rating is probably not enough for a traditional bank to seriously consider lending larger amounts of cash to you.
You will likely qualify for one of their loans if you have missed some payments on bills here and there but, for the most part, you have to have your money management in check. Having a couple of credit cards where you have decent credit utilization probably isn’t going to hurt either. Fairstone just needs to see that you have a history of being able to manage your money.
Secured Loans
Secured loans, as the name suggests, will need to be secured against something. At the time of writing, Fairstone can only offer this type of loan to homeowners. You can’t put anything else up as collateral. Obviously, there will need to be some ‘value’ in your home to apply for this type of borrowing. If you have multiple secured loans against your property, then you aren’t going to get approved.
There are several benefits to secured loans. This includes:
- The ability to borrow more cash
- Better interest rates
- Longer loan terms
- Higher loan approval rate
Of course, this means that you will be putting your home up as collateral on the loan. So, if you fail to pay your loan back, you could potentially lose your property.
The minimum that you can borrow is $5,000 with a maximum of $35,000. This means that a secured personal loan would be perfect for somebody who needs access to larger amounts of cash.
The interest rate is low here — well, low in comparison to unsecured Fairstone loans. Expect interest rates between 19.99% and 39.99%. You are probably going to get approved for somewhere near the middle of that range. This isn’t the cheapest secured loan you will ever come across, but it isn’t the most expensive either.
You can borrow cash for between three and ten years. Expect to be in this for the long haul. There are huge fees if you pay your loan back early.
Unsecured Loans
Unsecured loans are perfect for renters and those who do not want to run the risk of losing their property if they are unable to pay their loan back on time. Of course, this is going to put greater risk on Fairstone, and that is going to be reflected in the interest rates and loan terms.
Unsecured loans start off at $500 and the maximum you can borrow is $20,000. The better your credit report looks, the more you can borrow. However, do bear in mind that your current employment will be a factor here, too. Fairstone wants to know you can afford to pay them back. You aren’t going to get approved for $20,000 if you’re working a minimum wage job for a couple of hours a week.
The higher-risk nature of this loan is reflected in the interest rates. The minimum interest rate here is 26.99% going all the way up to 39.99%. The maximum interest is a little bit too high for our liking. At this point, it is bordering on the same interest rates offered by some of the lenders that cater to those with poor credit. Note, however, that most people who borrow from Fairstone are going to be getting somewhere around the 30% mark.
The minimum term of your loan is six months. The maximum is five years. Fairstone tends to lend cash for shorter periods of time. By all accounts, it is tough to get approved for some of their lengthier loans. Although, at the interest rates that Fairstone charges, you probably do not want to be roped in for a five-year term anyway.
The Application Process
The application process for Fairstone loans begins online. The first step is all about gauging whether you are a good fit for a loan from Fairstone Financial. This means carrying out a credit check, determining how much you want to borrow, and finding out details of your employment. It is a rather quick process. It shouldn’t take more than a few minutes. At the end of it, you will be given a quote for terms that Fairstone thinks would be affordable for you. This is NOT an offer yet.
If you like the sound of the quote, then you can ask Fairstone Financial to get in touch with you. Shortly afterward, one of their loan advisors will call you. The purpose of this phone call is to find out more about you. The advisors are pretty good at working out whether you can afford their loans or not. We love this stage of the process, and we do wish that other lenders had the same thing in place. It seems that Fairstone really cares about getting the right product for you. The offer that you end up with at the end of this call will be tailor-made to your specific circumstances. It is clear that Fairstone doesn’t believe in the ‘one size fits all’ approach.
At the end of the call, you will be told to take some information to your local branch. This will include payslips, rent details, that sort of thing. Basically, the same information you would take if you were applying for a traditional bank loan. You may be asked a few more questions at the branch, but this part is mostly a formality. They will be checking through your information to ensure that you are who you say you are (and earning what you say you are earning). If everything is fine, you will sign the paperwork. This will start the money transfer process.
Most people should have the cash in their bank account within a day of applying for the loan. However, if you are opting for a secured personal loan, then it may take a few extra days to accommodate some additional checks.
Pros and Cons
Pros
This company caters to the people that the market normally forgets about. Many people with middling credit scores often find themselves into payday loans. That type of loan is ridiculously expensive, and we do not feel that you should be forced into one if you have a history of decent money management.
We love how involved Fairstone is in the process. You aren’t just applying online. You will have advisers guiding you every single step of the way to ensure that you end up with the right loan for you. Normally, if you want this personal touch you would need to head to your local bank. Because Fairstone has branches all over Canada, it is also going to be easy to get in touch with somebody if you run into problems with your loan. There will be no waiting on the telephone for hours and hours, something which is a major problem with some lower tier lenders.
Cons
Fairstone Financial isn’t really a company that manages to gather that many negative reviews at the Better Business Bureau. This means that they must be doing something right with their products. If we put the interest rates to one side (because higher than normal interest rates are understandable), then we can’t think of that many issues with the company.
If we had one complaint about their offerings, it’s the fact that their application process can be somewhat long winded. Sometimes it feels similar to the process of applying for a traditional bank loan, but you do not get to enjoy the benefits of those low-interest rates. When your personal adviser calls you, it often feels as if they are trying to ‘upsell’ you to something that you may not want. Although, to be honest, it never seems as if you will be sold on loans that you have no hope of repaying. At least Fairstone Financial has that going for them.
Conclusion
Fairstone Financial may not be one of the cheapest lenders around, but they are a fantastic fit for those who have average credit scores. This is a company that loves to take a more ‘hands-on’ approach when they are lending money. They will help you find the right loan product for you, which is a great opportunity to turn your average credit score into a great one.
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