People with bad credit ratings often have a difficult time getting a loan because they’re viewed as high-risk customers more likely to default on a loan. Fortunately, there are available loans for people with bad credit that can get you the money you need, and some can help you raise your credit score if you make your monthly payments and pay off the loan in full.
What Are Bad Credit Loans?
Let’s face it – sometimes your credit score might not be perfect. But that doesn’t mean you’re out of luck when it comes to borrowing! Bad credit loans in Canada are like understanding lenders offering a helping hand.
Securing a loan gets trickier if your credit score is below 600. However, some lenders are more understanding. They might be open to borrowers whose credit score is hovering around that 600 mark, but remember, “bad credit” can vary depending on the lender.
The key is finding a lender who understands your situation. That way, you can find a loan that works for you and helps you get back on track.
Best Loans for People with Bad Credit
Traditional banks might give you the side-eye if you have a less-than-perfect credit score, but you still have options! The good news is that many alternative lenders understand that financial setbacks happen. Getting the financial help you need is still within reach. Here are three options to consider:
Online Payday Loan/Cash Advance Lenders
Most payday loan lenders require a steady job and a chequing account. You repay your loan in full via a withdrawal from your chequing account after your next pay cheque is deposited.
These lenders, like Speedy Cash, provide short-term loans, also called cash advances, typically used toward unforeseen expenses such as repairs or overdue bills. Most payday loan lenders require a steady job and a chequing account.
Speedy Cash offers Payday Loans with no credit checks in:
- British Columbia
- Ontario
- Manitoba
- Saskatchewan
- Newfoundland and Labrador
- Alberta
- Nova Scotia
- New Brunswick
When working with an online payday loan or cash advance lender, beware of providers that charge broker fees and require credit card numbers. A reputable payday or cash advance lender does not operate in this manner and withdraws only the authorized amount from your account.
Bad Credit Lenders
If you check online classified services, you can find bad credit lenders advertising loans for people having bad or no credit. Look for a bad credit lender specialist with a good reputation, loan terms, and approval rates. You can also check with the FCAC to understand the customer protection framework and code business practices.
Debt Consolidation Lenders
Debt consolidation companies can offer loans if you have income and significant debt. Although some debt consolidation loans can have higher fees than a standard bank loan, debt consolidation loans provide other benefits, including flexible payment schedules, easier budgeting, discontinuing collection agency calls, and may help to improve your credit score with on-time, regular payments.
Loan amounts vary, but some debt consolidation lenders enable borrowers to consolidate loans, overdrafts, credit card accounts, and other balances up to $35,000. Some offer one to five years of payment terms, so you can eliminate your debt more quickly and save on multiple debt account fees. The best consolidation lenders will not have hidden fees or pre-payment penalties (charging you for paying off a loan early). Visit the Office of Consumer Affairs for more information on debt consolidation.
There are various ways to obtain a payday, cash advance, or short-term loan, even with bad or less-than-perfect credit. Research your options and related fees and make an informed decision that is best for you.
How to Apply for a Loan Online with Bad Credit
Bad credit doesn’t have to mean getting shut out of borrowing money. Alternative lenders like Speedy Cash specialize in working with people with less-than-perfect credit. Unlike traditional banks with rigid requirements, alternative lenders often take a more holistic approach.
Lenders like Speedy Cash offer an easy online application, quick loan approval for bad credit loans, and less stringent requirements than standard banks. Online lending is a convenient option to get the cash you need in the privacy of your own home or office. The online application typically involves filling out a form with your basic information, employment details, and the amount you need to borrow.
Since alternative lenders serve a range of borrowers, their loan options can vary significantly. Interest rates, loan amounts, and repayment terms will all differ. That’s why it’s crucial to compare multiple lenders before deciding.
Tips on How to Secure a Loan with Bad Credit
While bad credit can make traditional loan applications tricky, it doesn’t have to be a complete roadblock. Here are steps to help you secure a loan and achieve your financial goals:
Understand Your Credit Score
Get a free copy of your credit report from Canada’s major credit bureaus. This report will detail your credit history, including past loans, credit card balances, and payment behaviour. Knowing your score is crucial, but it’s not the whole picture!
Know Your Budget
Lenders need to be confident you can repay the loan. So, before applying, know your monthly budget. Creating a solid budget demonstrates your financial responsibility and strengthens your loan application.
Explore Your Options
Take your time with the first loan offer you see! The best approach is to pre-qualify with multiple lenders, which allows you to compare the interest rates and terms you might be eligible for.
Be Well-Prepared
Get ready to gather your documentation, including proof of income (pay stubs, bank statements), valid Canadian identification, and any other relevant financial documents the lender might request. Everything organized streamlines the application process and shows the lender you’re serious about your loan request.
Visit Speedy Cash
Speedy Cash’s fast and friendly payday loans are an excellent solution if you have bad credit but need a loan. Simply visit our website to find a store location near you, or apply right online today!
