Types of loans and other financial services

Short-term loans range from those that are typically expensive to use – for example, payday loans and short-term instalment loans – to those that still have a cost, but it is often lower – for example, a cash advance on a credit card and lines of credit.

There might be a few reasons why some short-term loans and services are more expensive than others, for example:

• A more expensive loan might be offered to borrowers with limited or poor credit histories, as the lender might see them as a higher risk to repay the loan – however, there might be other options even with a limited or poor credit history
• A less expensive loan might be “secured” – meaning you’ve ensured the loan will be paid back by offering some form of collateral, such as your car. Another example is a Home Equity Line of Credit (HELOC), which uses your home as collateral

Beware of  "lead generator" – they might seem like lenders, but they are not. To find out more about the common types of loans and other financial services, and their features and risks, click on any of the following:

More expensive loans and other high-cost financial services:

• Payday loans
• Instalment loans
• Pawn broker loans
• Title loans
• Sub-prime auto loans
• Rent-to-own services
• Wire transfers/remittances
• Cheque cashing services

Less expensive loans and other financial services

(note: some of the loans and other services that are listed below are still quite costly but are cheaper than payday loans and other loans/services noted above):

• Credit cards
• Lines of credit
• Bank or credit union loans
• Auto Loans (there is another more expensive type of auto loan, known as "sub-prime" loan. The loans referenced here are the ones offered by dealerships or banks and credit unions, based on approved credit
• Overdraft protection