Discover Your Options: Loans for Bad Credit
Is your bank account at the end of its road? Do you feel like you won’t get approved for anything other than payday loans due to your bad credit?
Provided you’re willing to do the research; help might be near. More importantly, you don’t have to settle on the predatory interest rates of payday lenders.
Personal loans for bad credit are a reality, not a fairytale.
It’s not only those with good credit who know the benefits of easy loan approval. There are plenty of platforms and institutions waiting to approve your bad credit personal loan applications.
Now, procuring bad credit personal loans in Canada might be 100% feasible. But it’s not entirely straightforward and not rocket science.
It would help if you had some guidance toward your most ideal option—which you’ll obtain by reading the content below.
Get a Loan Despite Having Bad Credit
Any FICO score between 300 to 620 is deemed “bad” by the credit unions (e.g., Equifax) responsible for projecting your scores.
We’re not going to lie to you; scores in this range don’t make loan approval easy—especially when the only options you’re considering are traditional financial institutions.
Where you’ll start finding luck is when you seek out bad credit, private lenders. There are even platforms out there loaning to people with recent bankruptcies and delinquent accounts.
Mostly, these lenders operate in the online environment and are easy to find. The lack of brick-and-mortar expense makes it less risky to offer loans to someone with poor credit.
These loan offerings often come with no credit check, looking into numerous other factors, such as your overall credit history.
One critical consideration is that these are usually unsecured loans. Whereas secured loans require collateral (e.g., house, car), bad credit lenders charge higher interests instead to make up the difference.
Interest rates are also high because of the likelihood of borrowers defaulting.
So, before jumping in headfirst because of the easy approval, investigate the APR to ensure it’s affordable.
Bad Credit Loans FAQ
Given the nature of bad credit loans, we receive tons of frequently asked questions about them.
Below are the answers to said questions:
What is a Bad Credit Loan?
These are loans given to people with credit scores deemed “bad” by credit unions (i.e., scores between 300 and 620). Such loans are also available for applicants with no credit history.
Compared to credit cards, bad credit loans come with more affordable interest. However, due to their unsecured nature and the heightened chances for defaulting borrowers, APRs are higher than other options.
What are the Types of Bad Credit Loans?
First, there are unsecured loans for bad credit, which come with higher interest but without collateral.
Conversely, secured loans for bad credit exist as well—but they’re uncommon. The one advantage is that because you’re providing an asset, you won’t get raked over the coals on interest. They’re just tough to come by.
Then there are loans for the explicit purposes of credit-building. Institutions with this option tend to provide debt consolidation. This replaces several more expensive debts with one all-encompassing debt with lower interest.
How to Get a Loan with Bad Credit?
The most practical, advisable option is applying with online platforms that specialize in unsecured bad credit loans.
There’s then the possibility of finding a co-signer—their high credit will make you a viable candidate for better terms and favourable rates. While this is convenient and preferable, finding a co-signer when you have bad credit is a low percentage strategy.
Furthermore, you can take out a payday loan. But these are universally considered predatory and conducive to a revolving door of debt.
Home equity also gives you a loan when you have bad credit—but that necessitates being a homeowner.
Where Can I Get a Loan With Bad Credit?
Here are the best bad credit loans Canada has to offer, all available online:
- Ferratum Loans
- Marble Financial Fast Track Loans
- Loan Away
- Northstar Brokers
The internet is your best friend in finding a viable bad credit lender. Hundreds of platforms exist to steer you on the right path.
Can I Get a Car Loan with Bad Credit?
Yes, you can get a car loan with bad credit.
More specifically, the bulk of bad credit loans are personal loans. You can choose to spend the funds on whatever you want, whether it’s for a new car or repairs on your vehicle.
How to Get An Instalment Loan with Bad Credit
Many bad credit lenders offer fixed-rate instalment loans.
Explore the various online platforms that specialize in these transactions, and it won’t take long to get approved for an instalment loan.