Loan amounts and repayment terms explained

The useful amount is the cash available for the expense

An advertised borrowing limit is not an amount every applicant receives or should request. Start with the cost to be covered and subtract any funds already available. Then distinguish the loan’s face value from the money paid out after charges. If fees are financed, the repayment balance may be higher than the cash used for the purchase; if deducted, the proceeds may be too small to meet the bill.

Account for fees deducted or financed

Compare shorter and longer terms using both the regular payment and the total paid over the agreement. A smaller instalment can come with a larger cumulative cost. RBC’s personal-loan service provides repayment options to discuss, and the FCAC Budget Planner helps test the commitment against actual household spending. Leave room for irregular expenses and a less favourable income month instead of setting the payment at the absolute limit of the current budget.