Getting Personal Loans with Bad Credit in Canada
Whether you need to buy a car or pay for an unexpected large expense, taking a personal loan can help you achieve your goal without the fear of rising interest rates. When you have a low credit score, lenders consider you a high-risk customer because bad credit indicates you have a history of not paying bills on time. When you default on a loan, the lender loses money.
If this is your situation, what you need to do is take some steps to improve your credibility as lenders are willing to look at your individual situation and lend you the money you need. Many lenders accept applications from people with low or no credit if they have proof of income, proof of residency and a driver’s license. Your options for personal loans bad credit Canada include:
Credit Unions – Your local credit union is a good place to start your loan shopping. They offer flexible loan terms and some of the lowest interest rates for a lender with bad credit.
Online Lenders – Online lenders often have some of the most flexible terms for getting a loan and the process is quick and easy. However, they often also have high interest rates.
Non-Banking Finance Companies – Finance companies provide loan terms that are more flexible than banks. The specific loans they offer can vary with each company.
Banks – If you’ve had a checking account with a bank for several years, they may look on you favorably and give you a payment option that suits your needs.
Guaranteed Approval Explained
You may see advertisements that will guarantee approval no matter what your credit score is; however, every lender will check up on your credit score and charge interest rates according to the risk they think you pose for them. Even lenders who promise a loan no matter your credit score often require an active checking account and proof of income. Guaranteed approval usually means that they will accept personal loan applications from people who have declared bankruptcy, have accounts in collections, or other financial problems.
Start Improving Your Credit Score
This might surprise you, but a good way to start is by ordering a copy of your credit report and checking it for mistakes. If information on your report is incorrect, it can drag down your credit score. Take the time to fix your report, and you can be one step ahead of thousands of people who don’t even know how a mistake is harming their credit score.
Once you’ve cleaned up your report, you can start building good credit. It may take time because the purpose of your credit score is to demonstrate that you can borrow and pay back money on a regular basis over a period of time. Nevertheless, recent activity does outweigh information that is five of seven years old, so here are some things you can do to prove you are responsible for your finances:
• Pay all your bills on time
• Use a credit card responsibly
• Avoid having a high balance on credit cards
Contrary to what you may have thought, you need to use credit to have a credit report. Using a credit card is essential, and understanding how credit works will put you on the right track for an excellent credit score.
Getting the Best Possible Deal for Personal Loans Bad Credit Canada
To ensure you get the best contract available with your credit score, take the time to do comparison shopping. With every lender you approach, you want to check on:
• Interest rates
• Lending criteria
• Acceptable types of collateral
• Repayment schedule
• Types of loans available
If you have bad credit but you need a personal loan that is repayable in affordable installments, you have options for getting personal loans bad credit Canada. Take advantage of your options and accomplish your goal!