Financial Products for Canadians

Nov. 22, 2013 - PRLog -- Canadian banks offer different types of personal and small business loans such as closed-ended, open-ended, conventional, and others. There are two main categories of loans – unsecured and secured (the latter require some valuable item such as vehicle or jewelry as collateral). Applicants can choose from different products such as home equity lines of credit, mortgages, and boat and car loans that require collateral. Financial institutions have strict lending criteria when it comes to unsecured loans because collateral is not required. The main downsides are a short term of repayment and higher interest rate. Customers can choose from different types of unsecured debt such as credit cards, bank overdrafts, student loans, and corporate bonds. Customers apply for loans for different reasons – to pay their medical bills, for home renovation projects, to go on vacation, and others. Various institutions offer home equity loans, secured lines of credit, and mortgages. In Canada, banks feature adjustable, fixed rate, balloon, 2-step, and other mortgage varieties. Balloon mortgages are usually offered for a period of 10 years, and borrowers make interest-only payments until the end of the term. This is why the monthly payments are more affordable.

There are different financial institutions in Canada such as credit unions, big and chartered banks, finance and trust companies, caisses populaires, and many others. Depending on the type of establishment, they offer investment advice, special and savings accounts, mortgage loans, and other products.

Different factors must be considered when choosing a mortgage product, including the repayment term, fixed vs. adjustable interest rate, and others. Borrowers can choose from a selection of loans such as 5/1 and 5/5 adjustable rate mortgages and bridge financing. Interest-only mortgages are beneficial in that borrowers make payments to cover the interest charges. Banks often advertise a floating interest rate, along with no or little down payment. Borrowers usually opt for interest-only loans to find money for major projects, renovations, car purchases, etc.

Customers who want to deposit their money and earn interest can open a savings account. Customers can choose from different products such as regular and online savings accounts and CDs. Certificates of deposit come with a fixed interest rate and term and are offered by banks and credit unions. Banks offer money market accounts that feature competitive interest rates and check writing privileges. Savings accounts also offer returns but lower than other products.

Investment banks offer services to companies and investors and underwrite securities. Bank officials offer professional advice to private investors and companies and help them with reorganizations, stock placement, and other issues. Different types of products and solutions are offered, including advisory services, solvency and fairness opinions, and private placement. Many banks offer services and products to their business clients, including lines of credit, business and construction loans, and others. The list of products includes investment and working capital loans, special and current accounts, and others. Finance companies offer guarantees and business-only loans.

Reference: http://www.canadabanks.net/