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Bad Credit Loans Quebec
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Written by Lisa Rennie
Best Bad Credit Loans Quebec (Online) July 2021
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Note: Loans Canada does not arrange or underwrite mortgages or any other financial service. We are a simple referral website that provides free educational resources to help Canadians make better decisions.
It’s common to take out a loan to cover a rather large expense, particularly if your bank account doesn’t have the funds needed to make such a payment. But loans can be tough to get approved for, depending on a variety of different factors. Among other things, your credit score will matter when applying and getting approved for a loan. Without a good credit score, your chances of securing a traditional loan could be pretty low.
That’s where bad credit loans can really come in handy. There are certain loans and lenders out there who are willing to extend loans to those with bad credit. Here’s what you need to know about bad credit loans in Quebec.
What is Bad Credit?
This may sound obvious, but bad credit simply means you have a bad credit score. The reasons why you have bad credit could be far-reaching and can involve a number of poor habits that you may have had or still have, including any number of the following:
- Missing payments
- Taking out too many loans in a short period of time
- Closing old credit cards that still have a balance
- Maxing out your credit utilization
- Going through foreclosure or bankruptcy
- Racking up your debt
But there may have been circumstances that were out of your control which led to your bad credit score, such as:
- Losing your job
- Getting injured and being unable to work
- Experiencing unexpected emergencies
If you have a history of bad habits – especially failing to pay your bills – your credit score will suffer. And if you have a bad credit score, applying for a loan could end up being more complicated for you. But, the good news is this is where bad credit loans in Quebec can help.
To see more ways that bad credit can affect your daily life, check out this infographic. Where to Get Bad Credit Loans in Quebec
Consumers in Quebec who have bad credit can still be able to get approved for a loan. Rather than focusing on a person’s credit score, lenders will place more weight on other factors, including income, debt, and collateral. There are several different types of loan products and services available for those with bad credit, including the following:
Secured credit cards – Unlike conventional credit cards, secured credit cards require collateral. In this case, you would put a certain amount of money up front that will be used to collateralize the credit. Essentially, this amount is considered a “security deposit” and represents the available credit you have.
Personal bad credit loans – There are many bad credit lenders out there who make it their business to lend money to bad credit borrowers. You will still need to go through an approval process, but you won’t have to worry so much about your credit score. Keep in mind that these loans tend to come with higher interest rates compared to conventional loans. Also, don’t work with any lender who asks for upfront payments or fees, as this could be a sign of a scam. Watch this video to discover more ways of identifying a loan scam.
Debt consolidation – This is a popular product for consumers who have a lot of high-interest debt, like credit cards. Perhaps it’s because of so much high-interest debt that your credit score has suffered. Regardless, debt consolidation can be used to help pay off your debt in a more affordable and easier to manage way.
How to Improve Your Credit Score
While you have loan options available to you if you have bad credit, you may want to consider improving your credit score in order to make it easier for you to get approved for a conventional loan in the future. If you have time to spare before taking out a loan, waiting to apply and giving your credit score a boost would be the best course of action for you to take.
Here are some things you can do right now to improve your credit score:
Pay your bills on time – This is the most important thing you can do to improve your score. Even one missed payment can harm your score but making it a habit of paying all of your bills on time can do wonders for your credit score over time. If you’ve made a late payment and want to know how you can rebuild your credit, read this.
Don’t max out your credit cards – Whatever your credit limit may be on your credit cards, don’t go anywhere near it. Instead, try to spend no more than 30% of your credit limit. Your credit utilization plays a big role in your credit score, so make sure you continue to pay off your balance as much as possible. Click here to learn how you can increase your credit score without increasing your credit card debt.
Don’t apply for too many loans – Applying for a number of loans or credit cards within a short period of time will put a “hard inquiry” on your credit report. The more inquiries like these are found on your report, the worse off your score will be. As such, resist the temptation to take out too many loans at once.
Don’t close any old credit cards, especially with outstanding balances – Old credit is good credit, so you should leave any old credit card accounts alone. This is especially true if there are still balances owed on them. In this case, your credit score could take a hit if you close out your account without paying off what’s left. Will paying off your credit card bill help increase your credit score? Find out here.
Pay down your debt – Instead of letting it grow or moving it around, make an effort to pay down your debt. Here are 7 things you don’t have to give up to pay down debt.
Interested in how the credit bureaus calculate your credit score? Click here. Frequently Asked Questions
How do I get a lower interest rate on my loan with bad credit?
While a good credit score can help lower the interest rate you are charged, there are a few other ways you can lower it even if you have bad credit. In order to lower the interest rate your lender charges you, you must reduce your risk as a borrower. The lower risk you pose and the more reliable you look as a borrower, the lower the interest rate you’ll get. You can do so by increasing your income by getting a second job, or by waiting a few months before applying to solidify your employment stability. You can also reduce the risk you pose of defaulting by securing your loan with an asset or getting a cosigner.
Is a payday loan better than a personal loan if I have bad credit?
In general, a personal loan is often a better choice than a payday loan. Personal loans not only offer better rates but have longer terms and higher loan amounts. As a result, you’ll be able to spread the costs of expensive purchases, making payments affordable.
Can I get a loan with no credit check?
Yes, there are many online lenders in Quebec who provide loans with no credit check. These lenders will base their approval on other financial factors such as your income, job stability and debt-to-income ratio. While these loans work well for individuals with bad credit, they often are a more expensive way of borrowing due to the high-interest rates.
Need a Bad Credit Loan in Quebec? Call Loans Canada
Getting approved for a traditional loan can be a tough call if you currently have bad credit. But securing credit doesn’t have to be impossible. With bad credit loans in Quebec, you can get the funds you need to cover whatever pressing expense you might have, despite where your credit score stands. Be sure to get in touch with Loans Canada today to find the right bad credit loan product for you.
