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Loans With No Credit Check In Canada
In Canada, there are several loans that individuals can apply for. However, loans with no credit check in Canada are what most individuals are interested In especially borrowers with bad credit history.
Previously loans were strictly the responsibility of traditional banks or non-bank financial institutions. And these banks and non-bank financial institutions are mandated by the government to conduct credit searches on borrowers applying for loans. This was put in place to cut down on defaulters.
What Credit Bureaus Do
Credit bureaus were established to work as information centers to provide financial institutions with the borrowing behavior of individuals who go to them for loans.
What the credit bureaus do is to collect information from a number of organizations or institutions and use this information collected to create a report on the individuals. Examples of the institutions where the credit bureaus get their information from are the banks, credit unions, police department, judicial office, utility companies etc.
The information is then purchased by financial institutions and used to make decisions on whether to give their clients a loan or not. The decision arrived at by the lender is solely the responsibility of the lender and not the credit bureau.
Credit bureaus have nothing to do with the decision a lender makes apart from the information it provides to the lenders on an individual borrowing history. Recently there has been an upsurge of alternative lenders who give loans with no credit check in Canada.
These alternative lenders have given a lot of people the hope of getting loans especially when their credit history is nothing to write home about.
What is meant by no credit check loans
The simple explanation to loans with no credit check in Canada is that lenders don’t check how creditworthy a borrower is from the credit bureaus. These lenders rather ask for proof of income from these individuals to make sure they can pay back the loans being given to them.
A borrowers credit score is not the most important information for these lenders and this works very well for borrowers with bad credit history. The fact that the lenders do not check on an individuals credit history, the loan then becomes a no credit check loan.
Loans with no credit check in Canada are mainly loans which are not huge because lenders who give these loans have to protect themselves from would-be defaulters. Especially knowing the borrowers of loans with no credit check in Canada are mainly individuals with bad credit history, lenders find ways to minimize the risk.
No credit check loans who qualifies?
It is quite easy to qualify for loans with no credit check in Canada. It’s easy because the qualifications for no credit check loans is relaxed, making it very easy to qualify. Although it’s easy to qualify for no credit check loans, there are some requirements an individual must meet.
First of all the individual applying for the no credit check loan must be eighteen years or above. He or she must be getting an income at the end of every month or have a way of getting income at the end of every month.
The reason for the requirements of the loans with no credit check Canada being lenient is that lenders of these kinds of loans know the importance of money. They want to make it available to as many people as possible knowing that there are a lot of bad credit history borrowers who through no fault of theirs got themselves in this situation.
Knowing very well that traditional lenders will not grant loans to bad credit history borrowers, alternative lenders give that group of borrowers the chance to get money to sort out their financial problems.
How to search for loans with no credit check in Canada
When looking for loans with no credit check in Canada, you have to make sure you search the internet for a lot of options so when you finally make the choice it will be the best. Bear in mind that most no credit check loans that are available online are payday loans.
So the search should be very intense to make sure what the lenders are offering is exactly what you will get when you sign up for the loan. In as much as most of the no credit check loans are payday loans there are quite a number of no credit check loans out there that are personal loans, installment loans, and unsecured loans.
So as a borrower who is looking for the best loan that is suitable for you, make sure to do a thorough search to get the best loan available. Whiles searching for the best loans with no credit check in Canada pay close attention to the terms and conditions of the loans as well as other charges associated with the loan.
Also, some lenders will ask you to send your financial information, its best to be sure the lender is a genuine one before giving such information. There are a lot of scammers online, so information such as a borrowers financial information, as well as other personal information, must be withheld until you are totally sure the lender is a legit one.
Some lenders will like to know the credit score of their clients, however, loans with no credit check in Canada lenders do not require such information.
Loans with no credit check in Canada – Payday loans
Payday loans are the best kind of loan a person can fall on when they are hard up and need money urgently. Payday lenders offer loans with no credit check in Canada and are easy to get, hence the reason why most borrowers who have a bad credit history but need money urgently fall on them.
Sometimes when emergencies such as medical emergencies or having car trouble in the middle of the road, you can not wait till the next pay day. These emergencies will need money to take care of them, therefore, money must be borrowed and even with good credit going through the long process can cause further damage because of the urgency of the situation.
Payday loans are there to save the situation since you can get the money at the quickest possible time without all the hustle that goes with getting a loan from traditional banks. If you are lucky you can have friends or family that will be willing to loan you money to solve your problem.
However, sometimes these loans from family and friends end up spoiling the relationship if the repayment does not go as planned. Getting a payday loan seems like the best solution, where the individual will rather keep the relation between family or friends intact.
Benefits associated with payday no credit check loans
Any time there is an application put forward to a lender for a loan, there are a series of questions the applicant is required to answer. Every lender has their own requirements that make a borrower eligible for their loan. There might be similarities in the requirements, however, some requirement does differ from lender to lender.
Most loans with no credit check in Canada have lenders more interested in the ability of the borrower to pay back the loan being given. So the question asked are more geared towards that, instead of whether the borrower has a good or bad credit history.
Previously to get a loan meant one had to visit the lender at their office and wait your turn to be attended to. A lot of documentation was needed before a loan application will even be accepted. Thanks to loans with no credit check in Canada or what people call payday loans, all the stress of having to go all the way to the lender’s office is in the past.
Now a borrower can seat in the comfort of his or her home or office or anywhere the borrower has a computer or phone with internet connectivity to apply for a loan. The process of applying for a loan online is so easy and borrowers find it more convenient and hassle-free.
The requirements for the payday loans are not difficult to provide so a lot of borrowers who don’t have good credit, prefer it to other kinds of loans.
Types of lenders who give loans with no credit check in Canada
If you have a bad credit history and looking for a loan from the traditional banks, non-bank financial institutions, and other traditional financial institutions, then be prepared to be rejected. This is because the traditional financial institutions always conduct a credit search on their borrowers especially since they are mandated to do so.
When they conduct the credit search on the borrowers, they (traditional lenders) are able to know which potential borrower is creditworthy and which one is not. As a borrower, if you know you have a bad credit history it will be best to avoid the traditional banks so your credit scores are not further ‘hurt’ with the credit search.
Every search conducted on an individuals credit history affects the person’s credit rating. So its better to avoid such financial institutions, since the credit score is already bad. Fortunately, there are lenders who conduct no credit search on their clients that can be found in Canada. If you have bad credit you can apply to such lenders.
Some lenders that give loans with no credit check in Canada
• Private Lenders
These are individuals or organizations that borrow money to an individual or even a company. Most of the private lenders lend money to people they know or have a relationship with.
Private lenders typically lend money without following the normal lending guidelines. They give their own terms and conditions that they lend by to individuals and companies.
• Niche-focused lenders
Basically, niche-focused lenders only deal with specific loans and don’t venture into other kinds of loans. An example is mortgage loans where there are specific lenders who only deal with mortgages and nothing else.
This is a type of marketing technique employed by the niche focused lenders to target a specific market and people. These lenders of niche focus loans identify the specific needs of people and then give loans to solve that particular need.
Lenders in this business are able to bring a rise of profitability into the company. Because they tend to know more about that particular niche and work towards improving services in that department. Making them a preferred choice to a lender who offers all kinds of loans.
• Alternative Lenders
The alternative lender is an umbrella under which a lot of lenders fall under aside the traditional banks and other traditional financial institutions. All kinds of loans can be applied for with alternative lenders. This is because all the lenders who give loans to all kinds of borrowers are under alternative lenders.
Most borrowers turn to alternative lenders when they have been rejected by traditional banks or when they know their credit history is bad.
Hard credit checks
When a lender does a hard credit search on an individual, it simply means the lender is pulling a full credit history on the individual. When a lender conducts a hard credit search on a borrower it means that the lender is looking for new credit from that lender.
So the lender does the credit search to be sure he or she does not have other loans from other lenders that will affect the repayment of the loan the borrower is looking for now. When the hard credit searches are a lot on a borrowers credit report, it then gives the lender an opinion on that lender.
What it means practically is that the lender is desperate and moving from lender to lender until he or she is lucky to get one lender to give the loan. That in financial terms says a lot about the borrower, and what that says about a borrower is not good.
What a hard credit check does is to reduce a persons score by 5 points so let’s say 5 hard credit checks have been done on an individuals credit report it means he or she will have their credit score reduced by 25 points. And that is a lot of points to lose.
A one-time hard credit search on a borrower may not have an effect on a borrowers report, its when it becomes a norm on a report that it becomes a problem for the borrower.
What is a soft credit check
Soft credit checks are not dangerous to an individual’s credit scores. These inquiries are done by the individual themselves or by companies who want to hire that individual and want to do a background check on the person.
Sometimes a credit card company can do a soft credit check on you to make sure you are qualified for a credit card. Sometimes these soft credit checks are not recorded on an individual’s credit report. Even if it is recorded it is indicated it is a soft credit check so will not affect the scores of the person.
Most of the times the soft credit checks are seen only by the individual when he or she checks on his or her report. But other lenders do not see it.
How loans with no credit check in Canada can lessen your burdens
Putting money aside so that in case of emergency you can fall on is the ideal situation everyone will like to happen. However, this is not the case in most cases. What happens more than half of the time in the lives of each one of us is that whenever the need for money arises is when money is not readily available to us.
Sometimes the money needed is not that much, but it is not available and the emergency situation must be attended to. The loans with no credit check in Canada then becomes like a life saver because a borrower can get a loan at the fastest possible time and not have his or her credit history being checked.
Having a bad credit history does not matter at this time and the money will be received within some minutes if all requirements are met.
The latest time the money can be received is within a day. And it can be the best feeling for a borrower who needs money urgently and had lost all hope because of his bad credit history.
Though interest rates for these loans are high, at that particular time when there is an emergency situation high interest is the least of the borrowers’ problem.
These loans with no credit check in Canada, are mostly online loans and application can be put in any time of the day be it day or night, any day of the week and twenty-four hours in the day.
Advantages of loans with no credit check in Canada
• No collateral is needed
Most loans with no credit check in Canada need no collateral as security for the loan. This is because the amounts given are usually not that huge.
So in case of default (which should not be the case), the borrower will not lose an asset such as a house or car. What the lenders of these loans do is give the loans at very high interest rates to serve as some sort of cushion for lending to people with bad credit history.
• No credit check loans are convenient
All a borrower needs is to have a computer or a phone with internet connectivity and he or she is ready to apply for a loan online. In the past, the luxury of applying for a loan online at a borrowers convenience was something which was unheard of.
Thanks to technology and advancement, this is very common when it comes to applying for loans. The money loaned is transferred to a borrowers bank account as stated in the application form. And this can be done within minutes or a day.
• A good credit score is not needed
Having a good credit score is a very good thing because when you need credit from lenders it makes it easier for you and the options to choose from are a lot. However, if you have bad credit, you don’t need to worry too much because it is not a requisite requirement for a payday loan.
The most important thing is to be able to prove to the payday lender that you earn a salary at the end of every month or you have an income which can be used to service the loan.
• Income determines how much can be loaned to you
Having an income which is high means you can qualify for a higher amount of money from payday lenders. The same way a lower amount income will mean you can get only a smaller amount of loan. This is what most borrowers must be aware of so they do not have hopes of getting so much when their salaries don’t support that kind of amount.
• The loan is almost instant
The whole process of getting an online loan is that it is fast. From application till when the loan is approved until when the money is disbursed. If a borrower meets all the requirements, the process is so fast it can be termed an instant. Within twenty-four hours the whole process can be completed with the money in the account of the borrower.
Disadvantages of loans with no credit check in Canada
• Interest rates are very high
The loans with no credit check in Canada are very high in interest rate because of the risk lenders take with bad credit history borrowers.
Because of the likelihood of the bad credit borrowers defaulting on their loans, payday lenders give their loans at very high interest rates to help minimize the risk.
• Big financial problems cannot be solved
Due to the risk payday lenders take in lending money to borrowers with bad credit history, the amounts given are usually quite small. The amounts are mostly for emergencies and not for very huge financial problems.
• Borrowers of payday loans are prey to scammers
Due to the fact that payday loans are online, and most people are venturing into payday lending, its difficult for laws to monitor all these lenders.
• You have to show proof of income
If you don’t have any means of income then it will be difficult to get payday loans. This means you have to get some sort of income to proof to the lenders that you can pay back the loans.
Simply put loans with no credit check in Canada have been and still is saving lives. It has sorted a lot of financial problems for people with bad credit history. Though these types of loans are helping borrowers with bad credit to get the needed money, it is important for borrowers to make sure they settle for the best lender who gives loans with no credit check in Canada.
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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. Our lenders lend from $500-$5,000. 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.