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Types Of Bad Credit Loans In PEI
While improving your credit and applying for a bank loan may be optimal, not everyone has the time for that. Instead, you can opt for any one of the following bad credit loans in PEI:
Bad credit personal loans. You can get a regular personal loan that you pay in installments from multiple alternative lenders in PEI. Many lenders specifically work with borrowers with bad credit. Just be aware that they will likely charge a higher interest rate, so be sure to factor that in before you apply.
Loans with no credit check. Not all lenders perform a credit inquiry when considering you for new credit. If your credit is bad, but your income is decent enough to afford your payments, you shouldn’t have a problem finding one of these specialty lenders.
Secured collateral loans. If your credit and finances aren’t great, you can lower your risk level by offering up your assets, such as your home, car, or other valuable property. This makes you less risky because the lender has the right to sell your asset if you default for too long.
Loans using a co-signer. Another way of getting approved when your financial strength isn’t enough is to get someone to co-sign your application. However, they will need to be in good standing in terms of their credit and finances. Do note that if you default, the responsibility falls to your cosigner.
What Do You Need To Get Bad Credit Loans In PEI?
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)
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.
Where Can I Find A Bad Credit Loan Near Me?
If you live in PEI and have bad credit, there are several alternative lenders available that service bad credit borrowers in the province:
Fairstone
– 201 Buchanan Dr. Unit #6, Charlottetown, PE, C1E 2E4 – 454 Granville St., Unit #11, Summerside, PE, C1N 4K7
Fairstone has been a trusted lender in Canada for nearly 100 years and offers quick personal loans from $500 to $50,000. Even with fair credit, you can still get approved for a personal loan with Fairstone.
You can complete the loan application process online or in person at one of the two Fairstone branches in PEI mentioned above.
easyfinancial offers payday loan alternatives to residents of PEI with bad credit. You can apply for a loan on the easyfinancial website or by visiting a physical branch. A decision about loan approval will be provided within minutes.
Spring Financial is an online that offers loans to PEI residents for $500 up to $35,000. Loans come with lots of flexibility and can be repaid whenever you want with no fees. Interest rates start at 9.99% and loan terms range from 6 to 60 months.
There are no physical branches in PEI. All Spring Financial loans must be applied for online.
Bad credit borrowers in PEI can get up to $1,000 in fast cash in less than 24 hours with LoanMeNow. The online loan application is quick, and you can get approvals within the hour. No credit check is required, so you can apply for a short-term loan regardless of your credit score.
LoanMeNow is an online-only lender. There are no physical branches.
Your credit history is important when applying for a car loan, but a bad credit score doesn’t necessarily mean you’ll get turned down.
Many lenders specialize in helping bad credit borrowers find affordable car loans despite their negative credit history. These lenders place more focus on other factors aside from your credit score, including your income, employment, and debt level. As long as you can demonstrate that you can cover your car loan payments, you can still get financing for a car purchase with an alternative lender.
However, you may not be able to get approved for a large loan amount, which means you may have to look at less expensive vehicles. Further, your bad credit score increases the risk for the lender, who will likely charge you much higher interest to compensate for this added risk.
If your bad credit prevents you from approval at your bank or other lending institutions, it’s probably time to start mending your credit.
Use A Secured Credit Card
If you don’t qualify for a loan or a regular card, a secured credit card can be a useful and effective credit improvement tool. All you need to qualify is a security deposit, which is equal to your desired credit limit.
You can use it like a normal credit card. Each responsible payment can help improve your payment history, which can build your credit score.
Paying Down Your Outstanding Debt
First and foremost, everyone who wants to improve their credit should be making all of their loan and credit payments on time, without fail. If paying your full balances isn’t feasible, at least making your minimum payments will save you from penalties.
Paying More Than The Minimum
While it’s true that making your minimum payments will save you from penalties, it’s also important to know that you’ll be charged interest for every unpaid dollar, which could only raise your debt level and could affect your credit even more in the long run.
Diversifying Your Credit Accounts (If Possible)
Another way to benefit your credit is by having a few different types of credit products (credit cards, loans, lines of credit, etc.) in your profile. Just make sure you can afford to pay all of them responsibly.
Applying Fewer Times Within A Short Period
While diversifying your credit products can be beneficial, applying for too many of them within a short time (6-12 months) can be harmful, especially if your credit is already bad. Each time a lender performs a “hard inquiry” to examine your credit, your credit score drops by a few points. If your poor credit is leading to denied applications, those lenders could see that in your report and decide that you’re a risky borrower.
Reducing Your Credit Utilization Ratio
This ratio refers mainly to revolving credit products and can be calculated by dividing your current outstanding balance by your credit limit and then multiplying it by 100. It’s best not to use more than 35% of your available credit unless necessary. A high utilization ratio can have a negative impact on certain credit scores.
Watch Out For Bad Credit Loan Scams
Many alternative lenders make it their business to help the underbanked. However some fraudulent lenders in the lending sphere prey on bad credit borrowers because of their limited access to loans due to their credit profile.
Before you apply for a loan with a lender, make sure you get familiar with all the signs of loan scams to protect you from becoming a victim:
Guaranteed Loan Approval
To lure bad credit borrowers into signing a loan contract, some lenders may guarantee loan approval, even without looking at factors like income or bank statements. If you don’t have the financial ability to make your loan payments, you could risk getting yourself into a vicious cycle of debt. Avoid any lender that doesn’t vet their applicants.
Upfront Fee Required
Lenders should not demand upfront payments for loans. Some may say it’s necessary for insurance purposes, but this is not a requirement. Never pay a lender upfront before signing a loan agreement and receiving your money. If a lender demands such payment, keep looking.
No Reviews
A lender who has been in business for a certain amount of time should have accumulated at least a few reviews online. If you can’t find any reviews for a lender you’re thinking of applying with, there’s a chance this lender may be a scammer.
No Physical or Online Presence
All legitimate lenders have some sort of presence that allows people to find them. Whether the lender works solely online or has a physical location, a web address or physical address should easily be found with a quick online search. If you can’t find any address for a lender, this is a red flag.
Financial Assistance Programs In PEI
Aside from applying for a bad credit loan to cover everyday expenses, there are also many programs available that are designed to help low-income residents in PEI. You can quickly and easily find these programs online at www.211.ca, including food banks, school lunch programs, free household items, and so forth.
Free Personal And Household Goods
The cost of just about everything has gone up, including clothing, household items, toiletries, and more. Fortunately, residents in PEI who are in need can receive items for themselves and their homes for free at the Summerside Free Store. All items are gently used and have been donated by generous members of the local community.
Summerside Free Store is located at 109 Water St., Summerside, PEI, C1N 1A8.
Children’s Clothing And Laundry Services
Parents and caregivers can get free clothing for their children between the ages of 0 to 6 years at the Families First Resource Centre. There is also a washing machine and dryer available for you to use for free. The centre services residents in the following communities:
Cardigan
Georgetown
Montague
Murray Harbour
Murray River
Wood Islands
Vernon Bridge
Surrounding areas
Families First Resource Centre is located at 4 Brooke St., Montague, PEI, C0A 1R0
Habitat For Humanity ReStore
ReStore is operated by the PEI Habitat for Humanity and sells a variety of gently used goods at a significant discount. Items include home decor, building supplies, and home renovation items.
All PEI residents are welcome to visit the ReStore at 167 Minna Jane Dr., Charlottetown, PEI, C1E 2L9.
School Food Program
It’s important to ensure that children have a nourishing lunch in the middle of the school day, but sadly, many kids in PEI do not get a proper meal due to their families’ financial situation. Fortunately, there are programs in the province that ensure that children in PEI are fed properly, including Bon Appetit, which is provided by the PEI School Food Program.
This program provides healthy lunches five days a week to PEI public school students, no matter what their ability to pay is. Kids pay what they can up to a maximum of $5.75 per meal.
Food Banks
Multiple food banks across PEI provide free food to needy residents. Simply visit pe.211.ca, type in your location, and a list of food banks will populate. Each food bank services residents within local community boundaries, so you may have to show ID before accessing food items.
What kind of bad credit loans are available in PEI?
Banks and major institutions are simply not willing to approve loans for those who have bad credit scores. Fortunately, there are many alternative lenders across Canada—PEI included—that are willing to extend credit to those who can show a steady income, job security, and a moderate debt-to-income ratio. While payday loans are an option for an alternative unsecured loan, personal loans represent a much better alternative. Secured loans also allow a bad credit borrower to leverage existing assets to get approved for a loan.
Are personal loans better than payday loans?
Yes. Payday loans are exempt from higher interest rate restrictions whereas personal loans are not. Typically, the maximum allowable annual interest rate (APY) in Canada is 60%, but payday lenders are allowed to charge upwards of 500%-600% because the repayment terms are shorter (usually 2 to 8 weeks). Personal loans offer better flexibility by allowing you to pay off your loan in smaller installments over more time.
How does bad credit affect my loan applications?
Having a bad credit score will affect the amount and rate of your loan, provided you are approved at all. Having bad credit can even affect other facets of your life, such as being able to rent a property, being hired by a potential employer, having to make security deposits for utilities, and even higher insurance premiums.
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