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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 Quebec?
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)
Types Of Loans You Can Get With Bad Credit 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, alternative 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:
Bad Credit Personal Loans
Many alternative lenders in Quebec provide personal loans to those with bad credit. These lenders, as mentioned above, place more emphasis on your overall financial profile, including income, debt level, and collateral.
Due to their flexible lending standards, qualifying for a personal loan is easier. However, keep in mind that these loans tend to come with higher interest rates compared to conventional loans.
No Credit Check Loans
Various types of loans fall under this category including personal loans, payday loans and auto title loans. Depending on the lender, you can get a no credit check loan, which involves getting a loan without a hard credit check. Similar to bad credit personal loans, these lenders place more emphasis on your income, debt and collateral.
Where Can I Get A Bad Credit Loan Near Me In Quebec?
Many bad credit lenders are available in Quebec. If you’re struggling to get a loan due to poor credit, consider one of the following bad credit lenders in Quebec:
Fairstone (French: Financière Fairstone)
Fairstone has been around for almost a century providing personal loans to Canadians, including those with bad credit. It has multiple physical locations throughout Quebec, including the following:
Quebec City: 3322 rue du Carrefour, Québec, QC G1C 8B5
easyfinancial provides personal loans to borrowers with bad credit. Canadians can borrow up to $100,000 with terms as long as 10 years. Quebec residents can visit several physical branches throughout the province to obtain a loan, including the following:
Montreal: 3493 rue Notre-Dame W, Montréal, QC H4C 1P3
Unlike Easyfinancial and Fairstone, Spring Financial does not have physical locations. Instead, the company offers loans exclusively online, over the phone, or via text all over Quebec.
Spring Financial provides loans to all Canadians across the country. Loans range from $500 to $35,000, and loan terms range from 9 to 60 months.
LoanMeNow is a Canadian online brokerage that finds short-term loans for Canadians. There are no physical branches, so the loan process takes place entirely online. However, their main office is located at 1250 René Lévesque Boulevard West, Suite 2200, Montréal.
The company does not perform credit checks as part of its loan process, so borrowers with poor credit are encouraged to apply. Loan amounts are made for up to $1,000 to borrowers in all provinces and territories.
Yes, you can get approved for a car loan with a bad credit score. In this case, you’ll need to apply with an alternative lender, as traditional lenders typically have minimum credit score requirements that you would have to meet.
Luckily, car loans are easier to obtain with bad credit than unsecured personal loans. That’s because a car loan is a type of secured loan, which means it is backed by an asset of value. This reduces the lender’s risk and therefore makes it easier for bad credit borrowers to get approved.
How Can You Increase Your Chances Of Getting Bad Credit Loans In Quebec?
If you have bad credit, these are a few things you could do to help increase your chances of qualifying:
Pay down your debt – Even though your credit score is bad, paying down one or two debts can increase your chances of qualifying. It may not only improve your credit but improve your debt-to-income ratio which is an important factor for qualifying with an alternative lender.
Provide Collateral – Adding a form of security to your loan can also increase your chances of qualifying. Similarly, you can also get someone to co-sign your loan. With this added security, your lender will be more open to lending to you despite your credit score.
Watch Out For Scams Involving Bad Credit Loans In Quebec
Most lenders are honest, but some are simply looking to scam unsuspecting borrowers. For this reason, it’s important to get familiar with the signs of predatory lending to protect yourself from getting scammed.
This is especially important if you have bad credit. That’s because loan scammers typically set their sights on those with bad credit since they have fewer options.
Alternative lenders that loan to bad credit borrowers have relaxed approval criteria compared to the big banks. But even then, they make no guarantees of loan approval and still vet borrowers to ensure they’re able to repay the loan.
If the lender guarantees loan approval, this is a red flag. In this case, avoid this lender and look for one that uses some form of qualification assessment.
No Online Or Physical Presence
If you can’t find a physical address for the lender, or they don’t have a website, this could be a sign that they’re not in the business legitimately.
No Online Reviews
It’s customary for lenders to have reviews from current and previous clients. With no reviews available, it’s possible that the lender is not really in business. And even if there are some reviews, make sure they’re not fake and have been left by actual clients.
Upfront Payment Required
The only time you should start paying for a loan is after you’ve entered a legitimate loan agreement. Then, you’ll start making loan repayments, along with interest and other fees as detailed in the contract. Lenders that ask for an upfront payment in advance of any loan should be avoided.
Financial Assistance Programs In Quebec
If money is tight, you could be at risk of all sorts of issues, including missing a mortgage or rent payment, falling behind on utility bills, or even being unable to buy groceries. If your financial troubles have reached this point, there are many assistance programs in Quebec that you may want to consider, either in addition to a bad credit loan or as an alternative:
Rent Assistance in Quebec
The Rent Supplement Program is administered by the Société d’habitation du Québec to help low-income households cover rent. More specifically, the program covers the difference between the agreed-upon rent amount and the portion payable by the renter, the latter of which is equal to 25% of the total household income for the calendar year before signing a lease.
Housing Assistance in Quebec
The Shelter Allowance Program provides financial assistance to Quebecers 50 years of age and up. Eligible individuals and families can receive $100, $150, or $170 every month to go toward rent payments.
Income Assistance in Quebec
The Social Assistance Program and Social Solidarity Program provide eligible residents of Quebec with a benefit to be used to cover the cost of food, shelter, and other necessities.
Emergency Shelters in Quebec
There are several emergency homeless shelters in cities across Quebec, including the following:
Quebec City: Fondation de Lauberivière
Montreal: La Maison Benoît Labre
Laval: Centre d’hébergement Idola-Saint-Jean
Trois-Rivières: Centre Le Havre
Gatineau: Avenue Des Jeunes
Food Banks in Quebec
Many food banks are available to residents across Quebec. Each serves residents within the boundaries of the community:
Quebec City: Moisson Québec
Montreal: Youville Sharing House
Laval: Moisson Laval
Trois-Rivières: Moisson Mauricie
Gatineau: Moisson Outaouais
Utility Assistance in Quebec
If your financial troubles are making it difficult to cover your utility bills, you may be at risk of having these services cut. However, low-income residents may be eligible for assistance through an agreement with Hydro-Québec for a lesser payment to keep these services in operation.
How Can You Improve Your Credit?
While you have loan options available to you if you have bad credit, you may want to consider improving your credit score 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 one of the most important things you can do to improve your score. Even one missed payment can potentially hurt your credit score. As such, making full and on-time payments is important to building your score.
Don’t max out your credit cards. Your debt-to-credit ratio (or credit utilization ratio) is a common factor used when calculating credit scores. In general, a lower ratio of 30% or lower is recommended. So, try to keep your credit card and line of credit spending around 30% of your credit limit.
Don’t apply for too many loans. Applying for several loans or credit cards within a short time will lead to multiple “hard inquiries” on your credit report. The more inquiries like these are found on your report, the more they can negatively impact your score. As such, resist the temptation to take out too many loans at once.
Don’t close any old credit cards. Your credit history is another important factor that is commonly used to calculate credit scores. The older your accounts are, the more it may help your credit score. So it’s best to keep old credit accounts open as it can increase the average age of your accounts.
Getting approved for a traditional loan in Quebec can be tough if you currently have bad credit. But that doesn’t mean it’s impossible. Numerous lenders in Quebec cater specifically to those with bad credit. With these lenders, you can get the funds you need to cover whatever pressing expense you might have, despite where your credit score stands. Just be sure to compare options as these lenders are often expensive.
Bad Credit Loans Quebec FAQs
How do I get a lower interest rate on my loan with bad credit?
To lower the interest rate your lender charges you, you must reduce your risk as a borrower. The lower the 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 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, many online lenders in Quebec 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.
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