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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 Guelph?
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)
Loans Options For Bad Credit Consumers In Guelph
If you have bad credit and you’re finding it tough to get approved for any type of loan product, then you may need to look into other alternatives, including the following.
Bad Credit Loans
Many alternative lenders offer loans to individuals with different credit backgrounds. Whether you have good or bad credit, these lenders place more weight on other factors such as income, assets, and debt load.
Do note that while these loans are easier to qualify for, they often come with higher interest rates.
Secured Loans
If you want a better rate on your loan, consider applying for a secured loan. Secured loans require collateral, so if the borrower defaults, then the lender can seize the collateral to recoup the payment.
Where Can I Find Bad Credit Loans In Guelph?
You can find many bad credit lenders in Guelph that accept borrowers with low credit scores. In some cases, there’s no credit check required at all. If you have bad credit, you can still get approved for a loan from any one of the following lenders:
Fairstone
12 – 218 Silvercreek Parkway North, Guelph, ON N1H 8E8
Fairstone offers secured and unsecured personal loans to Canadians, including those with bad credit. Loan amounts range from $500 to $50,000, and funds are typically deposited in your account within 24 hours. After you complete a quick online application, Fairstone will come up with a payment plan that suits your needs and budget.
Fairstone is available both online and in person with 2 storefront locations in Guelph.
easyfinancial offers personal loan solutions for consumers, particularly those who can’t secure a loan with a traditional lender. You can apply online or in person, and get approved within minutes.
Personal loans are available from $500 to $20,000, with rates starting at 29.99%. Loan terms are flexible and range from 9 to 84 months.
easyfinancial loans are available both online and at a physical branch in Guelph.
Spring Financial offers online loans from $500 to $35,000, with rates starting at 9.99%. You can use the money to cover a variety of expenses and pay it back when you can without incurring penalty fees.
Apply online, and within minutes, you can get approved for financing without visiting a physical branch. Loans are available to borrowers of all credit types, including those with bad credit.
Spring Financial is an online-only lender, so there are no physical locations available.
LoanMeNow provides small loans up to $1,000, with funding available in less than 24 hours. This lender is a great option for bad credit borrowers who have been turned down by banks and other conventional lenders.
Their short-term loan applications don’t require a credit check. Instead, LoanMeNow will simply verify your employment and banking information as part of the vetting process.
There are no physical LoanMeNow branches. Loans are provided solely online.
If you want to improve your credit score and need a little more of a boost besides taking the above-mentioned measures, there are certain products that you can take advantage of that can help you:
Savings loan – A savings loan helps you save money and build good credit at the same time. Here you’ll get no money upfront. Instead, you’ll make payments to the provider for a period of time. Each payment will be reported to the credit bureau. Once you’ve “paid” the loan, they’ll refund you the payments you made, minus their fees and interest.
Secured credit card – A secured credit card can offer you the same benefits as a credit card, except you’ll have to provide a security deposit. This deposit will also act as your credit limit.
Can I Finance A Car With Bad Credit?
Yes, it’s possible to finance the purchase of a vehicle with bad credit. It’s important to understand, however, that your options will be limited and you may need to work with an alternative lender, since traditional banks don’t usually lend to bad credit borrowers. You’ll also be charged a much higher interest rate and may not qualify for a high loan amount.
If you have bad credit, you may want to consider taking out a bad credit car loan. This loan type is collateralized by the vehicle.
Since the loan is secured by an asset, the lender’s risk is reduced. In turn, the lender may be willing to offer a lower interest rate and higher loan amount.
Be On The Lookout For Loan Scams
Unfortunately, there are some lenders out there who prey on consumers who are in a compromised position of having bad credit. Because of their situation, bad credit borrowers may have fewer options to choose from and may be in a more desperate position to secure any type of loan that they are able to get.
As such, certain predatory lenders may try to suck these borrowers in and put them in a position that makes it very difficult to get out of.
Guaranteed Approval – Many scammers may advertise guaranteed approval, which may sound enticing to those who have a financial emergency. However, legitimate lenders will always require some form of underwriting.
Upfront Payment Required – Loan scams can also be spotted by the requirement to make an upfront payment to the lender. These lenders may often say that such payment is needed for insurance purposes or to cover processing costs. But no lender should ever ask for a payment before the loan is even processed.
No Address Or Contact Information – A legitimate lender should have a physical address, website address, email, or telephone number for contact information. If a lender doesn’t have any of these, beware.
Additional Government Benefits Available In Ontario
Other Financial Assistance Programs And Resources in Guelph
While you can use a bad credit loan to temporarily alleviate your financial issues, there are other resources that may be available to you. An easy way to find these resources is to check www.211.ca. You can search for programs based on where you live and the type of assistance you’re looking for.
Here are just some of the resources available in Guelph that you can find on www.211.ca:
Food Banks
The cost of groceries continues to rise faster than wages can keep up with. If you’re struggling to put food on the table, there are a handful of food banks in Guelph that can help. Here are just a few:
Guelph Food Bank — 100 Crimea St, Unit C12, Guelph, ON, N1H 2Y6 –
Hope House — 10 Cork St E, Guelph, ON, N1H 2W8
Onward Willow Neighbourhood Group — 15 Willow Rd, Unit K45, Guelph, ON, N1H 1V7
Homeless Shelters
The Stepping Stone Emergency Shelter in Guelph helps residents experiencing homelessness access safe and secure housing. The program also helps individuals and families work towards eventually getting permanent housing in the Guelph area through housing-focused programs and customized support. The shelter is located at 23 Gordon St, Guelph, ON, N1H 4G9.
Recreation Fee Assistance
Everyone of all ages should be able to participate in recreational programs, but everyone can afford them. To alleviate the financial burden of these programs, the City of Guelph offers the Fee Assistance in Recreation Program (FAIR), which helps provide funding for programs for children, seniors, and those with a disability who are in the low-income bracket.
Visit Guelph.ca to find out how to apply for this subsidy.
Emergency Energy Programme
The Emergency Energy Programme (EEP) is available to residents of Guelph and the County of Wellington and helps cover heating and hydro costs. If you’re at risk of having these services disconnected due to overdue payments, this program may help to assist you with paying the outstanding balance owed. Reach out to the Housing Stability Unit at 1-519-837-2670 x 3712 to find out how to apply.
How do I increase my chances of loan approval with bad credit?
To boost your odds of loan approval if you have bad credit, consider working with an alternative lender, applying for a secured loan versus an unsecured loan, and not applying for more than you need.
What type of loan is easiest to get approved for with bad credit?
A secured loan is easier to get approved for since you’re offering a valuable asset as collateral. Secured loans typically come with better rates and terms because of the lower risk for the lender. You can also look for a no credit check loan, in which case the lender won’t look at your credit score at all. Instead, they’ll look at your employment, income, and assets.
Can I use a bad credit loan for emergencies?
Yes, the funds from a bad credit loan can be used to cover a variety of urgent expenses, such as home or auto repairs, medical bills, broken-down appliances, or unexpected travel, among other things.
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