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How To Get A Bad Credit Loan
Here are some steps you can take to get a bad credit loan:
Step 1. Compare Lenders And Get Pre-Approved
Online loan aggregator sites can help you quickly find and compare lenders and their loan products. Simply input a few pieces of information about yourself and the loan you need, and the lending platform will populate a list of lenders and products, along with their rates based on your profile. This will start the process of pre-approval, which will give you an idea of how much you can qualify for and the rate you will be charged. You can then compare offers side-by-side and choose the one that best suits your needs. It's very helpful to start the loan process by getting pre-approved first, especially if you have bad credit, as your credit score can affect the interest rates and loan amount you can qualify for.
Step 2. Apply For A Loan
Depending on the lender you choose to work with, you may apply in person or online. To accurately assess your financial situation and verify your identity, lenders usually require certain documents for review, which may include a government ID, pay stubs and bank account statements. In some cases, you won’t require any physical documents as the whole verification process can be done via instant bank verification services like Flinx, Plaid and Yodlee. During your application process, you’ll be asked to sign into your bank account through a secure portal. This process allows lenders to receive a read-only bank statement and have your bank account verified instantly.
Step 3. Get Funded
Traditional loans can take a few days for funding to come through. But with alternative lenders, you can receive the funds from your bad credit loan in a matter of hours, as long as the approval is made by a certain time. Otherwise, you can expect your funds the next business day.
What Do You Need To Get Bad Credit Loans In Nova Scotia?
Name, date of birth, contact information
1 or 2 government-issued IDs (1 photo)
Social Insurance Number (SIN)
Proof of employment (income, employers name, job title)
Loan purpose
3 months' worth of bank statements
Bank account details (for direct deposit and withdrawal of payments)
What Can Cause Bad Credit?
Depending on how you’ve been handling your finances, it can be difficult to pinpoint the exact cause of bad credit. It might be due to any number of issues, such as:
A History of Defaulted Payments
Whenever you have an active credit product, be it a credit card or a personal loan, it’s always important to pay your bills on time and in full. Every time you default, meaning you don’t adhere to your loan agreement in some way, the incident gets recorded in your credit report which can cause your credit score to drop.
A High Credit Utilization Ratio
Your credit utilization ratio (aka. debt-to-credit ratio) is a common factor used to calculate credit scores. Generally high ratios can negatively impact your credit. To get an idea of how much debt you’re carrying, you can calculate your credit utilization ratio, take your total revolving debt and divide it by your total credit limit. It’s better for your credit score if you manage to keep your ratio at around 0.30-0.40(30-40%) maximum. The closer you are to reaching your credit limit, the worse it could be for your credit score.
Will All Lenders Deny My Application If I Have Bad Credit?
If your credit does look a bit worse for wear, you may have trouble getting your applications approved by banks and other conventional lenders in Nova Scotia. Don’t worry, there are plenty of alternative and online lenders in Nova Scotia whose clientele is primarily bad credit borrowers. Many of these lenders in Nova Scotia don’t even check your credit, as long as they can confirm that your income is steady enough to pay back your loan on schedule.
Types Of Loans You Can Get In Nova Scotia With Bad Credit
Even with bad credit, you can still gain access to:
Credit rehabilitation savings programs in Nova Scotia
Where Can I Find A Bad Credit Loans In Nova Scotia Near Me?
You’ll find several bad credit lenders throughout Nova Scotia. Some lenders have physical branches, while others work strictly online. Here are a few bad credit lenders available in the province:
Fairstone
– Halifax: 7071 Bayers Rd. #282, Halifax, NS B3L 2C2 – Dartmouth: 114 Woodlawn Rd. #19a, Dartmouth, NS B2W 2S7 – Sydney: 201 Churchill Dr. #301, Sydney, NS B1S 0H1 – Truro: 68 Robie St. #187, Truro, NS B2N 1L2 – Amherst: 211 South Albion St., Amherst, NS B4H 2X2 – New Glasgow: 610 East River Rd., Aberdeen Mall, New Glasgow, NS B2H 3S2
Fairstone has been in the lending industry in Canada for nearly 100 years and offers quick personal loans between $500 to $50,000. You can apply for a loan online or in person and access your funds as quickly as the same day you’re approved.
Easyfinancial offers unsecured personal loans from $500 to $20,000 with flexible repayment schedules. You can get approved in as little as 10 minutes and use the loan to rebuild your credit with affordable payments.
Spring Financial makes applying for a loan easy and convenient. The entire loan application and approval process takes place online.
You can apply for a loan from $500 to $35,000 within minutes. Bad credit is also accepted, so your credit score shouldn’t interfere with your ability to secure much-needed funds.
LoanMeNow offers short-term online loans to Nova Scotia residents. Once you’ve applied online, you’ll receive an immediate response about approval. If your application is accepted, you can get your funds in as little as 24 hours.
There’s no credit check when applying. All that’s required for an online loan from LoanMeNow is verification of your employment and bank account.
Things To Consider When Taking Out Bad Credit Loans In Nova Scotia
Some of these products come with higher interest rates because of the risk the lender is taking (only apply for a loan you can 100% afford)
You may need a less risky borrower to co-sign your application (especially if you don’t have any collateral to offer)
If you default, your cosigner will be responsible for your unpaid loan balance
If you and your cosigner default, both of your credit profiles will be damaged
Can I Finance A Car With Bad Credit In Nova Scotia?
Yes, you can apply and get approved for a car loan with bad credit. Many alternative lenders skip the credit check, which allows bad credit borrowers to successfully secure auto financing. These lenders place more emphasis on other factors when vetting loan applicants, such as income and vehicle value.
Keep in mind that bad credit car loans are more expensive. Your bad credit score makes you a riskier borrower.
To offset this added risk, lenders will charge a higher interest rate, which will increase the overall cost of your car loan. Plus, it may be more difficult to get approved for a high loan amount.
Do You Need To Provide Upfront Deposits For Bad Credit Loans In Nova Scotia?
While there are legitimate lenders in Nova Scotia who cater to bad credit borrowers, there are some predatory, even fake organizations out there trying to take advantage of people who don’t know any better. Desperate to resolve their bad credit situation, borrowers in Nova Scotia sometimes give out their personal and banking information. They then fall victim to predatory fees, fraud, and identity theft.
To protect yourself, make sure you educate yourself on the signs of bad credit loan scams, such as the following:
Look Out For Advanced Deposits
As we said, no lender should ask for a deposit or payment of any kind before your loan is approved and received. Demanding an advanced payment (which scam artists will call “loan insurance” to fool you) is illegal in Canada.
There’s No Such Things As Guaranteed Approval
Even though bad credit loans are much easier to get approved for, they still require some type of criteria to be met for approval. Lenders who guarantee loan approval without vetting loan applicants to some degree are just setting borrowers up for loan default. If you come across a lender that guarantees approval of your loan application without looking at any credentials, look elsewhere.
They Provide Vague Details
Always read your contracts properly and be wary of any advertisements or how a salesperson acts. Legitimate lenders in Nova Scotia should tell you precisely how much your loan will cost overall, with interest and fees, by the end of your loan term. If your contract doesn’t contain such details or your sales representative is dodging your questions, they may be trying to scam you.
Beware Of Low Online Presence
Established lenders should have accumulated some reviews online from previous clients. You’re taking a risk by working with a lender with zero online reviews.
Legitimate lenders should have established a business presence, whether physically or online. If you can’t find a website address or brick-and-mortar address, keep looking.
Pro Tip
Lenders must have a Lender’s Permit to legally operate in Nova Scotia. Use this government resource to verify your lender. You can also look up the company name in the Better Business Bureau database for further confirmation.
Where Can You Find Local Financial Resources To Help Cover Costs In Nova Scotia?
Rent, food, childcare, and home repairs are major expenses that can affect your financial stability. Thankfully, there are many non-profit organizations and city programs in Nova Scotia dedicated to helping those experiencing financial hardship.
To help you find the resources you need to regain financial balance, check out 211.ca It is a great tool to help you find local programs in your area. Depending on your needs, you can find programs to help with childcare, food expenses, rent, home repair and much more.
Here are some of the major programs you may find in Nova Scotia:
Income Assistance In Nova Scotia
The Income Assistance program is available to lower-income Nova Scotia residents who are unable to support themselves financially. Funds from Income Assistance are provided via mailed cheques or direct deposit and are paid regularly. Further, those on Income Assistance are eligible to take advantage of Employment Support Services, which helps Nova Scotians find new employment opportunities.
Expense Specific Programs
Depending on the city you live in, you may find specific programs that help with certain expenses. For example:
H20 Water Fund – The H20 Water Fund helps residents in the area with low income with their water and waste water bills.
Basic Needs – For those living in Fairview, Clayton Park or Rockingham, you can get certain basic items for free through this program. They offer certain small household items, clothing for adults and children, diapers, toys and other baby items.
Home Repairs – If your home needs repairs because it currently does not meet the health and safety standards, you can get some financial assistance through this Home Ownership Preservation program.
Rent Assistance In Nova Scotia
The Canada-Nova Scotia Targeted Housing Benefit is a monthly rent supplement that helps Nova Scotia tenants cover the cost of rent. To be eligible, applicants must currently be using over 50% of their gross household income to pay their rent. The supplement amount is based on household size and income, and the average market rent.
Emergency Shelters In Nova Scotia
Several homeless shelters are available across Nova Scotia. Each one serves local residents, including the following:
Halifax: Metro Turning Point Centre
Truro: Haven House
Dartmouth: Out Of The Cold Community Association
Yarmouth: SHYFT
Food Banks In Nova Scotia
If you’re struggling to cover the cost of groceries, there are several food banks across the province to help supplement your needs:
Lake Echo: Lake Echo Community Food Bank
Kentville: Fundy Food Bank
Halifax: Halifax West Ecumenical Food Bank
Dartmouth: Feed Nova Scotia
Utility Assistance in Nova Scotia
The Heating Assistance Rebate Program helps low to moderate-income residents of Nova Scotia cover the cost of heating bills. Each eligible household can receive a $600 rebate to put toward the cost of home heating.
Of course! At Loans Canada, we can get any Nova Scotia consumer connected with the right sources of credit products for all financial needs. Whether your credit is good or bad, our team can help you. Simply apply below and you’ll be on the fast track to a better financial future!
It can be challenging, but it’s possible to improve your credit with some simple solutions. Pay your bills on time and in the fullest amount possible. Consider paying credit cards off twice a month to help with credit utilization. And if you don’t qualify for a typical credit card, get a secured credit card.
Are there alternatives to payday loans in Nova Scotia if I have bad credit?
Many alternative lenders in Nova Scotia specialize in offering loans to those with bad credit. These lenders offer better alternatives to a payday loan such as a personal loan, a secured loan, a line of credit, or even a mortgage. So long as you have a steady source of income and a modest debt-to-income ratio, bad credit can be overlooked to get you the funds you need.
How much can I borrow if I have bad credit?
Many factors can affect how much you can borrow when you have bad credit. The type of loan makes a big difference. For unsecured loans, payday lenders typically offer a paycheck’s worth of funds, up to $1500, to be repaid within a few weeks. Personal lenders, on the other hand, can offer upwards of $35,000 to be repaid over a longer term. Securing a loan with some form of collateral, such as a vehicle, will increase the chance of being approved for a higher amount with bad credit. Ultimately, your income level, job security, and debt-to-income ratio will determine how much a lender will be willing to extend to you.
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