The most frustrating thing about financial mistakes is that they linger in your credit score for years. One bad spell with late payments and you’ll be stuck with a bad credit score for years to come. While frustrating, having bad credit isn’t the end of the world if you do find yourself in a position where you need to borrow money. There are loans for poor credit available in Canada, and it is easier to apply than you might think.
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Bad Credit Loans in Canada
What are Bad Credit Loans?
So what is a bad credit loan? These are personal loans, or payday loans, that are offered to borrowers with bad, poor or no credit. There are many loan options out there for individuals in all kinds of situations and they are offered by all sorts of financial institutions and lenders.
Although there are instances where a poor credit loan may have a higher interest rate, it is not unusual. If you obtain approval for a loan request, make sure you study your contract carefully so that you know exactly what you’ll be paying for and whether or not you can afford to pay off your debt in time. This part is important because you do not want to have another dark mark on your credit score.
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Applying for Online Bad Credit Loans in Canada
When it comes to bad credit loans, Canada residents have options. There are some private lenders who extend loans to borrowers with bad credit, and there are many online lenders who lend to those who have had a bit of financial trouble over the years.
If you work with your traditional bank or other private lenders, you can count on a few things. You’ll have to complete a lengthy application. You’ll have to wait for approval. Your approval will likely hinge on your credit score. When you work with online lenders, however, you can simplify the entire process and skip the credit check completely.
When you apply for an online bad credit loan, you’ll fill out an online application. The lender will review your application to see if you meet their eligibility requirements. If you do, you’ll be presented with the terms of the loan. You’ll have a chance to review the terms and accept or reject them. If you accept the terms, you’ll have an agreement with the lender. The lender will then send funds to your bank account, and you’ll be able to spend those funds as you need.
Can I Get Guaranteed Approval for Online Loan with Bad Credit?
Guaranteed approval feels good. The idea of being sure you can borrow when you need to borrow offers a sense of relief to borrowers who are already stressed about financial matters and looking for a way to resolve their current issues.
Loans that are considered guaranteed approval have high rates of acceptance and you can likely count on being accepted as a borrower provided you meet the minimum requirements. In reality, there are no such loans. While requirements can vary by lender, typically you must meet the following requirements to be eligible for an approval online loan with bad credit.
- You must be a Canadian citizen
- You must be 18 or older to apply
- You must be able to demonstrate an ability to repay the loan.
Typically, lenders will rely on your paystubs or perhaps your bank account statements. If you’re able to show that you have the funds routinely arriving in your bank account to repay the loan, the lender will likely deem you as meeting minimum requirements so that you can borrow the funds. There is no credit check required for an online loan with bad credit. Your eligibility is based on your current financial situation – not your past financial mistakes.
Personal Loans for Bad Credit
Online lenders offer borrowers personal loans that are paid back through installments. These personal loans for bad credit often have a short installment period to help break apart the repayment amount over a series of pay cycles. You will be responsible for a set amount over a series of weeks or even months and provided you make the regular payments, you will have repaid the amount in full in a set amount of time.
Personal loans are different than other installment loans. With a traditional installment loan, you usually have some form of collateral at stake with the payment cycle. A car loan, for example, is a type of installment loan. When you take out an auto loan, the lender will set up a series of installment payments over the course of several years. If you fail to make the regular payments on your vehicle, it will be repossessed by the lender.
With personal loans for bad credit, however, there is no car or house or boat, or another item to guarantee the loan. The lender is extended a type of financial trust to you, the borrower, that you will repay the loan in a set amount of time. To help offset the lender’s risk you can expect the loan amount to be relatively small. Most personal loans of this type are between $100 and $1000. The repayment period will also be much shorter than you’d expect from other installment loans.
Your credit score is designed to be information for future lenders about your past borrowing habits. Mistakes from your financial past can linger on your credit score for years, however. This means the punishment for a mistake you made can last quite a bit longer than it took for you to improve your financial position and your money management. When you need to borrow money with bad credit, online lenders make it easy. No credit checks, simple terms, and a streamlined borrowing process help you when you need help the most.