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Bad Credit Personal Loans Canada
Canada is a big market for a lot of financial institutions who give loans to all kinds of people. But with the rise of bad credit history borrowers, someone had to step in to give bad credit personal loans (Canada).
Having bad credit and looking for credit is a tedious task because most lenders especially traditional banks and financial institutions avoid such you to cut down on the risk associated with lending to you.
What Is A Personal Loan?
Personal loans can easily be described as loans given by lenders without any specific reason attached to it. If you take a personal loan you can use it as you wish instead of loans such as a mortgage or car loans where you have to use it for those specific purposes.
Bad credit personal loans Canada is therefore personal loans given to you although you have bad credit in Canada. Lenders who give bad credit personal loans Canada, do so to help you with bad credit, get loans to sort out any financial problem out.
Struggling to get a personal loan when you have bad credit, is something in the past because of the upsurge of alternative lenders who give bad credit personal loans in Canada. We all wish we can have a clean credit report which is the ideal report to get a loan without stress.
However, that is not the case and you can easily default or delay in paying back a loan because of many issues. An example is losing your job, getting divorced, having to pay for an emergency so you use the repayment to sort the emergency out. Anything can happen through no fault of yours that affect your repayment schedule.
Bad credit loans explained
To explain what bad credit loan is, you must first understand what bad credit is. If you are said to have bad credit, it simply means you have defaulted in a repaying a loan or you have delayed in paying back a loan.
This information is sent to the credit bureaus and they keep that information and any lender who accesses their portal will have that information on you. To avoid falling into the category of a bad credit borrower, you will need to pay back your loans on time and on the date agreed on by both you and the lender.
Bad credit loans are therefore loans that are given to borrowers with bad credit history. It’s that simple. A lender who gives you bad credit personal loans in Canada is actually giving you a second chance to your financial life.
Since personal loans can be used as you please, it is the same for bad credit personal loans (Canada). The only difference here is that this is your second chance so must be used wisely so as to help you out of your financial crisis.
Using bad credit personal loans wisely and paying back as agreed by you and the lender will help you get a much higher loan amount in the future as well as at a better interest rate.
How do I get my bad credit personal loans approved
Fortunately, if you have bad credit the process for applying for bad credit personal loans Canada is easy and the approval is very fast so far as you meet all the necessary requirements.
Not only is it easy but the process is very simple and processes to go through are straightforward and easy for anyone to apply. You can easily get a loan from lenders if you do some of the things below
• Every lender who gives a loan to you gives it based on the information provided so if you are truthful it helps the lender to also give you the best rates that suits your situation.
• Make sure to get all the necessary information or documentation requested for by the lender on time so your application can be processed on time.
• After you have filled out the application form, the lender will like to contact you for further clarifications on the information provided where necessary.
Be available to the lender so they can move forward with your application. You can be contacted by the lender through the telephone number you provided as well as your email. So make sure to check your emails and answer your calls when you put in an application for a loan.
• Do not hide the information of having several loans from your lender. If you do, you will just be adding more debt to your debt basket and that can be overwhelming when it’s time for repayments.
Some facts about personal loans
Personal loans are normally given without any collateral. If you are finding it difficult to meet some financial obligations, getting a personal loan will be the best choice because you don’t need collateral to get one.
If your credit is bad you can still get a bad credit personal loans in Canada to help you out. The only difference is that the bad credit personal loans are targeted at borrowers who have bad credit history so the interest rate is very high.
Factors to consider when looking for personal loans in Canada
Taking a loan is a big decision you will ever take in your financial life. This is because a loan can change your life in a positive or negative way depending on how you use and payback.
Knowing that when you go for a loan you will pay back with interest, you must consider the amount of interest rate that is put on your loan. The lower the interest rate on personal loans, the lower your repayment amount will be. So choose an interest rate that you can afford.
You should consider all other charges also since they all come together to give you the repayment amount. The interest rate on each person’s personal loan will differ from borrower to borrower because of some factors.
Below are the three main factors that affect a person’s personal loan.
• Owning a property
Since most personal loans do not need collateral as security, you do not have to worry about whether you have a property to use as collateral for a personal loan or not.
With that said, a lender will give anyone who has a property as a security for a loan a lower interest rate than someone without a property. So you can decide to use your property to stand in for a personal loan.
But you will have to know that in case you default on the repayment of the loan, the lender has the right to take possession of the property. These agreement are all stated in the contract between the lender and you.
Continuation of Factors to consider when looking for personal loans in Canada
Your creditworthiness is very important to most lenders in the financial industry. It is one of the main factors lenders use to determine e whether to give you the loan you requested for or not.
Another advantage of having a good credit score is that you can bargain on the best interest rate. Most lenders are keen on keeping borrowers with good credit history and so will go the extra mile to get them to stay.
• Employment information
Lending to people with no collateral is a big risk some lenders are taking. Because in the event of default they will be at the losing end. Knowing where you work and having some details about your employers is a way to help lenders offer bad credit personal loans in Canada get some sort of security.
Security in the sense that they know where to find you in case things are not going well as planned with regards to the loan agreement. If you have been with your employers for a long time is even a better ‘security’ to lenders. It shows or kind of gives the lender the idea that you are a stable person.
The reason why bad credit personal loans interest rates are high
It is a known fact that bad credit personal loans in Canada have very high interest rates. If you didn’t know, now you know. The commonest reason for this is that the lenders are cushioning themselves from the risk that is associated with lending to people with bad credit history.
This is not to say sometimes some people with good credit don’t default. But most people with good credit history turn to protect their credit history so will do well to pay back the loan they get diligently. Those with bad credit history sometimes just relax with their payment because they know they already have bad credit so it can not get any worse.
The truth is you can have a very bad credit history to the extent that no lender will be willing to lend to you. The default rate for bad credit history borrowers is very high so lenders who take the risk of lending to them do so at a very high interest rate to make up for the risk taken.
This may sound a bit unfair because someone who gets bad credit personal loans Canada, might be willing to rebuild his or her credit history. This may be true but the lender has no way of telling which bad credit history borrower will stick to the agreement till the end of the loan.
Is your credit bad, and why?
There are borrowers who have no idea what their credit scores are and are caught unawares when they go looking for loans. If you know your credit score it will help you know which kind of loan to go for. Also helps you avoid being rejected by lenders who access your information and realize you don’t meet their requirements.
Lenders conducting hard credit checks on you will negatively affect your credit score, so it will be in your best interest to avoid that as much as possible. Knowing your credit score before going for a loan saves you all the disappointment of being rejected. As well as giving you enough information to search for appropriate loans, same with lenders that you can afford.
Sometimes when you know your credit score, you will come to understand that it will be in your best interest to avoid taking more credit because it will just sink you further into more debt.
Instead, it will be better for you to consolidate all your loans and service one loan to give you peace of mind as well as convenience. Your debt may be so bad that it will be in your best interest to have a discussion on debt settlement.
In some circumstances declaring bankruptcy is an option that will help you out of all the debt you are in, but this should be the last solution when the situation is very bad.
Correcting your bad debt history
On the other hand, you can prove to lenders that you want to work on rebuilding your credit history by taking bad credit personal loans (Canada) and paying back well and on time. It speaks a lot about you the borrower and your character.
It goes to tell lenders that you have repented and willing to start afresh. When you start by paying back your loans religiously, you get to take more loans in future at better interest rates and much higher amounts. It will be best to also try and thread a different path from the one you were on that brought you to be in the category of borrowers with bad credit.
Setting goals of where you want to be financially will also help you to make the right financial moves to be able to achieve your goals. An example is if you have plans of buying a car in two years’ time but don’t have good credit, it will be best to start correcting your credit history so you can qualify for an amount that can buy the car.
What lenders will like to see when you apply for bad credit personal loans Canada
Lenders who are willing to give bad credit personal loans Canada are basically alternative lenders. They are more likely to take the risk of lending to bad credit history borrowers.
Traditional lenders are more conservative in their lending and will not lend to any borrower who they believe to be a high risk. To be able to convince lenders that you are ready for bad credit personal loans in Canada, you must be able to give them all the necessary information and documentation requested for.
Typically the information lenders will want to be able to process your loan is your basic information, financial information, and employer information. The above-mentioned information is the three main categories of information the lenders need to be able to process your personal loan.
In case you have a property that you will like to put in place of the loan, the lender will like to assess that property to find out if it is worth the loan you are requesting for or a little bit more than the loan.
Know that because of your bad credit history, it is possible the lender will call to ask a few questions about how you got yourself into that situation.
Pros and Cons of bad credit personal loans Canada
In every sphere of our lives, we have advantages and disadvantages attached to it. In some instances, the advantages outweigh the disadvantages whiles in others, the disadvantages outweigh the advantages.
If you are faced with the first scenario, it makes a lot of sense to go ahead with that option. But with the second scenario, it will be best to abort that option since it will only cause you problems because the disadvantages are more.
However, if an option has more disadvantages but the few advantages, are worth your trouble, then that decision should solely be yours and you will bear any consequences.
Let us discuss below some disadvantages and advantages of bad credit personal loans Canada.
Advantages of bad credit personal loans In Canada
Bad credit personal loans are basically personal loans that are given to people with bad credit but still have all the characteristics of personal loans.
• You can use bad credit personal loans in Canada for anything you want. This is because personal loans do not have specific uses attached to it. As compared to loans like mortgages or car loans which have specific purposes attached to them, bad credit personal loans are used at the discretion of the borrower.
The purpose of personal loans differs from user to user so it is sometimes called the multipurpose loan. Some of the uses of personal loans by borrowers are medical expenses, traveling, home improvement etc.
• Getting bad credit personal loans Canada is fast. Lenders do not delay with giving you the loan so far as you meet all the needed requirements.
• Interest rates for personal loans are relatively lower as compared to other types of loans such as payday loans which have very high interest rates. Although bad credit personal loans Canada will have interest rates a bit higher than personal loans given to borrowers with good credit history, it is still better than payday loans.
• Taking bad credit personal loans Canada does not require a lot of documentation. The requirements are easy for borrowers to qualify for bad credit personal loans in Canada. What lenders look out for is you being able to show proof of income and employer details so they can track you and know how stable you are and how long you have been with your employer.
Advantages of bad credit personal loans In Canada continued
• Lenders process bad credit loans very quickly so it is a preferred choice by most borrowers. When you apply for bad credit personal loans Canada, you can get your loan approved latest by a day and the earliest within some few hours of applying. This will happen if you are truthful to the lender with the details you provide.
• If you are looking to consolidate all your debt, a personal loan is the best loan to use. Having loans scattered all around and paying them off individually can be a bit tiring and strenuous. You can cut down the stress by using personal loans to consolidate all these loans so you have one loan to service and pay off.
• A bad credit history can make it difficult to get credit from most lenders and it will be in your best interest to repair your credit. You can do this by getting bad credit personal loans in Canada and paying it off on time and religiously.
When you do this you repair or rebuild your credit and this can boost your chances of accessing more credit in the future.
Disadvantages of bad credit personal loans in Canada
• You have to be careful about hidden charges lenders put on personal loan agreements that are either in small prints or on extra pages they know you will not look at. Make sure to read every readable thing in a personal loan agreement so that you will not miss any charges by lenders.
Because every charge added increases your repayment amount. Sometimes lenders charge fees for early repayment of your loans, so if you don’t see them in the agreement, do ask.
• Bad credit attracts higher interest rates. This is a way by lenders to minimize the risk of lending to bad credit history borrowers. The interest rates on bad credit personal loans Canada is typically higher than that of a regular personal loan for a borrower with good credit.
To summarize, bad credit personal loans in Canada can easily be found since there are a lot of lenders online willing to give bad credit personal loans. Most of these lenders are private or alternative lenders because traditional banks or non-bank financial institutions prefer to stay away from bad credit borrowers.
Even when they decide to lend to such borrowers, they will do so only when you provide collateral to back the loan. Terms and conditions for bad credit personal loans Canada differ from lender to lender, so research on each lender carefully until you are satisfied with all the terms and conditions of a lender before applying for a loan from them.
As a borrower with already bad credit, borrowing and going according to the loan agreement will help rebuild your credit and also help you get a better bargain for a loan in future.
Disclaimer: All loans offered through this website are subject to credit and underwriting approval. AfterLoans.ca is a lead referral company, not a lender. AfterLoans only works with financial service providers that adhere to Canadian laws and regulations. You can borrow up to $20000. Loans amortization is between 6-36 months. APRs range from 19.99% to 55%. The actual APR charged will depend on the lender’s assessment of your credit profile. For example, on a $1000 loan borrowed for 12 months at 29.9%, the monthly payment will be $97.24; with a total repayment, including interest, of $1166.88 There is also lender’s optional loan protection policy. In the event of a missed payment an insufficient funds fee of around 45$ may be charged (dependent on the lender). If you default on your loan payment plan the lender may terminate the plan and the remaining balance will become payable immediately. Our lenders employ fair debt collection practices, but will pursue the payment of Outstanding debts to the full extent that Canadian law allows.