Spring is just around the corner, and with it comes visions of putting an addition on the house, landscaping the garden, taking a warm vacation to shake off winter’s chill or shelling out big bucks for your (or your child’s) wedding. While they are all exciting plans, many Canadians will be asking themselves, how will I ever pay for them?

For some, the answer will be to apply for a loan.

“Loans can be used for all sorts of reasons throughout the year, including home renovations, children’s education savings or buying a cottage or car,” says Christine Zalzal, vice-president of marketing at B2B Trust, a third-party supplier of investment and RRSP loans in Canada.

When looking for a lender, it’s important to make sure the person you deal with at the lending institution is reputable and trustworthy, and that he or she really listens to your needs.

“Both the lender and the borrower have to properly assess the borrower’s current and future financial goals before choosing the right type of loan or product,” says Zalzal.

It’s also important to consider whether you will be able to meet the loan payments if there is a change in your personal situation, such as you or your partner lose your job or you get divorced.

“You have to ask yourself whether you can afford to make a monthly payment on the principal, not just the interest, regardless of your circumstances,” says Richard Goyder, vice-president of personal lending at RBC.

When it comes to searching for a lender, Goyder says the best advice is to get professional advice from your banker or financial adviser.

“Borrowing money is a big and very personal decision,” he says.

“You have to ask yourself, how much should I borrow? What’s my income? What’s the best kind of borrowing for me?”

Before you can determine how much money you should borrow, it’s vital to understand how much money you already spend each month and where you spend it.

Then you can decide where to trim so you can set aside adequate funds to meet your loan payments.
Regardless of whether you borrow money from a bank or another lending institution, you must make sure you can afford to pay back the loan as per the lending agreement.

“Consumers should sleep easy at night knowing they’re comfortable with their borrowing plan,” says Zalzal. “If they have anxiety over it, they should revisit it.”