Fairstone Financial Review: 2023 Fairstone Loans Review
Are you tired of being stuck with high-interest rates and hidden fees from your lender? You’re not alone, but there may be a solution. In this Fairstone Financial review, we’ll dive deep into this Canadian financial services company and see if their loans, mortgages, and other financial products are worth your time.
About Fairstone Financial
Fairstone Financial has been around for almost 100 years. During that time, they provided Canadians with personal loans for various purposes. You can meet with a lending specialist to get a loan online or at a local Fairstone branch across Canada.
A Fairstone personal loan will have interest rates in the middle of the spectrum – higher than traditional lenders but lower than payday lenders. They require would-be borrowers to have a fair to good credit score. The higher your credit score, the more money you can qualify to borrow at lower rates.
Product offerings
Fairstone Financial offers Canadians several different loan products. It’s essential to understand each of the products provided as they have different interest rates and qualification requirements that can impact your monthly payment on the loan. I’ll break down each of the offerings to help you understand which product may be right for you.
Here is a summary of loans offered to qualifying Canadians.
Unsecured personal loans: $500-$25,000 for 6-60 months at 26.99-39.99% interest rates
Secured personal loans: $5,000-$50,000 for 36-120 months at 19.99%-24.99% interest rate
First Mortgage Refinancing: up to $400k with 1-5 year terms, up to 25-year amortization, with rates starting at 13.89%
Second Mortgage Refinancing: up to $125k with 1-5 year terms, up to 20-year amortization with rates starting at 17.90%
Car & Auto loans: up to $25, 6-60 month terms, for any privately sold vehicle that is less than ten years old
Unsecured personal loans
An unsecured personal loan means you are not using any assets, like your home, as security for the loan. All unsecured loans have higher interest rates than secured loans because of the higher level of risk taken on by the lender.
Although it comes at a higher risk to the lender and higher interest rates for the borrower, this provides opportunities to get a loan when other lenders would turn you down. Borrowers can use unsecured personal loans for a variety of reasons, such as:
Debt consolidation
Unexpected expenses
Emergencies
and more!
Fairstone offers unsecured loans with the following options:
Loan amounts: available from $500-$25k
Loan term: 1/2 a year to 5 years
Prepayment penalty: None
Homeownership required: No
Collateral required: No
Annual Interest rate: 26.99% – 39.99%
While this loan can be easy to qualify for, this is high-risk. With interest rates starting at 26.99%, you would be better off with credit card debt, which usually starts at 19.99% annually. However, for unexpected problems in life, this may be a last necessary resort.
Click here to learn more about an unsecured loan from Fairstone.
Secured personal loan
Secured loans have an asset used as security or collateral for a loan. If a borrower cannot make their monthly payment, the asset can be liquidated and sold to repay outstanding loans. The most common type of security for a secured loan is your home. Secured loans will come with a lower interest rate and more favourable repayment terms.
Borrowers can use secured loans for:
Debt consolidation
Cover unexpected expenses
Emergencies
Home improvements
Fairstone offers secured loans with the following options:
Loan amounts: available from $5k-50k
Loan term: 3-10 years
Prepayment penalty: Yes!
Homeownership required: Yes
Collateral required: Yes
Annual Interest rate: 26.99% – 39.99%
While Fairstone offers a lower interest rate on a secured loan versus unsecured loans, the interest rate is still very high compared to an A or B lender. With an interest rate starting at 19.99%, look at all other lenders before proceeding with Fairstone. If you can qualify for a credit card, you would be better off utilizing a credit card to earn rewards and pay the same interest rate.
Click here to learn more about a secure loan from Fairstone Financial.
First Mortgage refinancing
If you own your home with no current mortgage, you could qualify for a first mortgage refinancing loan with Fairstone. As home values have increased dramatically over the last five years in Canada, this could be a great way to borrow money at a lower interest rate than a personal loan.
You could qualify for a first mortgage up to $400,000 with a rate of 13.89%. Fairstone offers loans with amortization periods of up to 25 years and on loan terms from 1-5 years. This will be a registered mortgage, so you must own your home. To qualify for a first mortgage, there cannot be an existing mortgage in the first position.
First mortgages offer lower rates because they are the lowest-risk option for lenders. In the event of a default, the lender in the first position will be paid off. First, the lender in the second position would be paid second. After all mortgages and debts that used the home as collateral are paid off, the homeowner would get the remaining funds from a sale.
First mortgage loan product details:
Loan amount: up to $400k
Interest rates: starting at 13.89%
Amortization period: up to 25 years
Loan term: 1-5 years
Fees: Yes (provincial, title searches, mortgage origination fees)
Prepayment penalty: Yes
Click here to learn more
Second Mortgage refinancing
The main difference between a first and second mortgage is that the mortgage holder in the first position will be paid out first and has higher security. This means a second mortgage will have a higher interest rate to reflect the higher risk the lender is taking on.
A second mortgage with Fairstone will come out at a significantly higher rate than one of the big banks and should be used only if you cannot qualify for a second mortgage with an A or B lender.
The second mortgage loan product offering from Fairstone has the following features:
Loan amount: up to $125k
Interest rates: starting at 17.90%
Amortization period: up to 20 years
Loan term: 1-5 years
Fees: Yes (provincial, title searches, mortgage origination fees)
Prepayment penalty: Yes
Compared to the first mortgage loan offer, you have a lower loan amount, a shorter amortization period and a higher interest rate.
Click here to learn more about second mortgage refinancing.
Car & Auto loans
Fairstone offers car & auto loans to give Canadians financing options to purchase used vehicles less than ten years old. The terms of these loans will vary, and you will get a loan quote and complete the application process to get all the loan details.
Click here to learn more.
Fairstone loans review – the Positive
In preparing this Fairstone loans review, I read reviews from hundreds of Fairstone customers. Given the high-interest rate loans, this should not be the first option for Canadians. However, for many Canadians with fair to good credit, this is the best option available and may be the only option.
Fairstone makes the application process easy, whether online or in person. They work with you to develop personalized loan repayment terms that will work for you in your situation. They will still work with you if your credit history and credit score are lower.
Fairstone loan reviews – the Negative
The interest rate on all of the loans offered by Fairstone is very high. Most of their loan options are as high as the interest rate on credit cards. They advertise debt consolidation as one of the reasons to get this loan. However, few debts will have a higher interest rate (PayDay loans, for example).
Most Canadians that require a loan from Fairstone are already in a dire financial situation. There are very few situations where getting this loan benefits you in the long run. I would recommend exploring your options with a debt specialist to determine if there is a better option with a lower, more manageable annual interest rate.
When should you consider using a Fairstone loan?
PayDay loans have an even higher interest rate and less favourable repayment terms. It would be best to be very careful when taking out an interest rate of 20% or higher, as it’s tough to repay the loan. If you have explored all other options and cannot qualify for a loan with a better rate, Fairstone may be the right solution for you.
If you plan to use high-interest loans, you must have a repayment plan. This should be a temporary move, and you should be eliminating all of these high-interest debts. To learn more about personal finance and build a personal finance strategy, visit my post on everything related to Personal Finance in Canada.
I recommend improving your credit score by paying off all your debts in full and on time to qualify for lower-interest loans.
The best alternatives to Fairstone Financial
Borrowell has many personal loan options from different lenders (including Fairstone Financial). These range from personal loans starting from 6.99% from sympleloans with loan amounts from $5k-50k. Click here to visit Borrowell for more personal loan options.
Other options to consider first would be the traditional banks and B lenders like Citadel mortgages, Neo Financial & True north mortgage. I completed a review of Neo financial, and they have many great options. Click here to learn more.
FAQ
What’s the difference between an unsecured loan & secured loan
A secured loan means the lender can provide you with a better interest rate. An unsecured loan has no collateral, which means the lender is taking on a higher risk. Unsecured loans will have a much higher interest rate to reflect the higher risk, as more of these loans will default. However, if you default on the loan, you could be forced to sell a critical asset such as your home.
Why are the interest rates so high?
The interest rates are so high because they make loans available to Canadians with lower credit scores. By doing this, they are taking on a higher risk that the borrower will default on their loan.
What’s the loan application process like?
The application process is simple with Fairstone – you can get an online loan quote or visit any of their physical locations across the country. A lending specialist will work with you to develop the best products for you.
The bottom line
In this fairstone review, I have outlined their product offerings and summarized the good, the bad and the ugly. If you have a good credit score and can qualify for traditional bank financing, you should consider this first. However, if you have been turned down and have no lower interest options, this could be the right option for you.
About the Author
Nick Robert is the founder and creator of Nickrobert.com. I created this website to educate Canadians about everything related to personal finance. As a Chartered Professional Accountant & Chartered Accountant, I have worked with many Canadians to achieve their personal finance goals.
To contact me, you can visit my contact page to email me directly, or you can visit and participate in my subreddit. Let me know about any topics you would like me to cover. If you are interested in guest posting on this website, message me through the contact page.
