At Loans Canada, we know that getting loans for bad credit is easier than you think. So, that’s why we make it simple for everyone to apply to multiple reliable lenders at once.
All of your favourite lenders for bad credit loans in once place; right here.
3,000,000 Applications And Success Stories
So, all it takes is one application and the right bad credit loan offer comes straight to you. In fact, we’ve handled over 3,000,000 applications from people looking for the right loan to get their finances in order.
Sure, we often we think that a high credit score is the be-all-end-all of loan approval. While having a high credit score is great, it’s not always manageable for all Canadians.
The good news is, your credit score doesn’t need to read 800 for you to get approved for the unsecured personal loan you need.
What Qualifies As Bad Credit in Canada?
As you know, in Canada, as soon as you’re approved for your first credit product, your lender notifies one (or both) of Canada’s credit reporting agencies. Those two bureaus are Equifax and TransUnion. After that, the bureau compiles all your credit-related information into a credit report.
Where Do I See If I Have Bad Credit?
Your credit report and your credit score show you how your payment histories and debt compare against a set of criteria.
- Bad credit is a credit score is between 300 and 559
- Fair credit scores are usually between 560 and 659
- Good credit is a score between 660 and 724
- Very good credit is a score between 725 and 759
- Excellent credit scores are from 760 to 900 (900 is very hard to get).
If you don’t know your credit score, you can get if for free. You can also check your credit report at the same time. Click the button below to learn more
What Are Personal Loans For Bad Credit?
A personal bad credit loan is perfect for Canadians looking to get their finances back on track. You don’t stop needing money when you have bad credit, and that is why bad credit loans are necessary and legal in Canada.
Types Of Bad Credit Loans in Canada
Whether you want to purchase an expensive item like a TV, finance a car or cover some unexpected expense, you can get a bad credit loan to cover it.
Secured vs. Unsecured Personal Loans For Bad Credit
- Secured Personal Loan – A secured personal loan requires you to put up an asset as collateral. Due to the additional security, this asset provides the lender, your chances of approval increase and you’ll likely receive a better rate. However, on the downside, if you default on your payments, your lender can seize your asset to recoup any payments lost.
- Unsecured Personal Loan – An unsecured personal loan is just a basic installment loan that you repay over a certain period of time.
Drawbacks Of An Unsecured Bad Credit Personal Loan
Like any credit product, you need to manage a bad credit loan properly. Every time you miss a payment, your lender will likely charge you a penalty fee and a higher interest rate.
Loans for bad credit already come with higher interest rates than normal ones. If you don’t pay it on time, your debt gets bigger. Furthermore, if you default for too long, after a certain point, your lender can sell your debt to a collection agency. This, in turn, leads to a court case and wage garnishment, if your debt is large enough to justify legal action.
What To Expect From An Unsecured Bad Credit Personal Loan
| APR | 2.99 to 46.96% |
| Loan Amount | 0 – 50k |
| Loan Term | 3 months to 120 months |
| Fees | No applications fees |
Bad Credit Car Loans
Another in-demand credit product with bad credit borrowers is the bad credit car loan, which many subprime lenders also offer. These kinds of loans have become increasingly popular because of the wide range of automotive problems they can help fix. So, when applying for a car loan, bad credit borrowers will need to outline exactly what they intend to use it for. That could be anything from necessary repairs for their existing vehicle to acquiring the car’s title, to paying for the car itself from a private seller or a dealership.
Drawbacks To A Bad Credit Car Loan
Just like personal loans, problems arise when it comes to the interest rates and payments, which the borrower may end up struggling to deal with. Because the borrower has bad credit, once again their interest rate can end up being very high. These costs can land the borrower in even worse debt than they were before. Then, not only will they be in considerable debt, they may end up paying much more for their car than it’s actually worth. The debts that come with most car loans are also secured. If the borrower defaults for too long, the lender or dealership could seize the car as collateral.
Bad Credit: Payday Loans
Next, payday loans are the third most common type of unsecured bad credit loan. They’re aimed toward Canadians with poor credit, who need a relatively small amount of cash quickly, often $1,500 or less. These unsecured loans sound appealing because they are easy to acquire. In fact, they usually have instant approvals, making them attractive to those with an emergency financial situation on their hands. If a borrower needs a few hundred dollars to pay their rent, they can walk in off the street, get approved and walk out with the cash in a matter of hours.
Drawbacks To Payday Loans
That brings us to the most unfortunate drawback of all payday loans, the interest rate. Since payday loans are generally for small amounts, the way lenders make a profit is by charging extremely high-interest rates, sometimes as much as 500% APR (annual percentage rate). So, if you were to borrow that same few hundred dollars for rent, but didn’t manage to pay it back by the due date, you could be charged a huge amount in interest. As a result, you could end up paying hundreds of dollars more for what should have been a relatively small, one-time loan.
The Benefits Of Bad Credit Loans
Getting a loan for bad credit online is easy. Here is all you need to do.
- Easy online application. You can apply on your computer or smartphone from the comfort of your own home whenever it’s most convenient for you.
- Manageable installment payments. You’ll be able to create a budget around your loan payments and know exactly when they are due.
- Quick approval time. Because we’re based completely online, there are fewer steps and little to no paperwork which means you’ll get your money sooner.
- High approval rate. Fewer restrictions and requirements mean that more Canadians get approved.
We work with an extensive referral network which means we can offer more Canadian more products and help them find exactly what they’re looking for, good credit, bad credit, any credit.
3 Simple Steps To Get A Bad Credit Loan
How To Get Approved For A Bad Credit Loan In Canada?
Step 1 – Review Your Finances
Before applying for a loan, you should get a copy of your credit report so you know where you stand with the lender. Lenders will look at your credit, your income level, debt level and your employment history to determine your credit worthiness. By analyzing your finances, you’ll be better prepared when applying for a loan. Moreover, it can help you choose a lender whose minimum requirements you meet.
Step 2 – Compare Lenders And Get A Quote
When choosing a lender, it’s a good idea to get a few loan quotes so that you can choose an offer with the best terms and conditions for you. To help you save time with your research you can use a loan comparison platform like Loans Canada. You simply have to fill out a single application to receive multiple quotes from different lenders.
Step 3 – Review Your Options And Get Funded
Once you know your options, you can accept the offer that works best with your financial situation. Do keep in mind that some lenders may require additional documents to complete the application. After you’re approved, you’ll receive your funds.
Documents Required For Applying For A Bad Credit Loan In Canada
When applying for a loan with any lender, there are certain documents you’ll need to provide, including:
- Personal Information – This may include a valid government-issued photo ID.
- Employment Information – Your lender may require you to provide proof of employment, this may include a letter of employment or a paystub.
- Financial Details – Your lender may also require you to provide a pay stub, bank statements or a tax return to verify your income and debt-to-income ratio.
- Other Documents – If you’re applying for a car loan, you may also need to provide additional documents such as your driver’s license, proof of car purchase, car title and registration papers (only for a car trade-in).
How To Improve Your Chances Of Getting A Bad Credit Loan?
There are a number of ways to increase your chances for an approved bad credit loan. Here are 3 ways to increase your chances of getting a bad credit loan quickly in Canada:
- Increase your income – Besides your credit, alternative lenders will look at your income to determine your eligibility. As such, getting a side hustle or extra part-time job can increase your approval chances.
- Reducing your debt – Another important aspect your lender will look at is your debt to income ratio. If you can’t increase your income, look to eliminate as many debts as you can prior to applying.
- Get a co-signer – The addition of a cosigner can help you secure a loan quickly. However, if you default on your payments your co-signer is responsible for the payments.
Additional Reading
Which Bad Credit Loan is Best For You?
In the end, which bad credit product you use for your bad credit situation is dependent on you and your particular financial position. When you are ready, Loans Canada can help. In the mean time, here is the list of the best bad credit loans in Canada right now.
Find Providers in Your Area
Bad Credit Loan FAQs
Do instant bad credit personal loans exist in Canada?
How does applying for a loan through Loans Canada help me?
Can I get an instant bad credit unsecured personal loan in Canada?
Can I get a loan with a credit score below 600?
What interest rate can I expect to get with bad credit?
What is a credit score?
What is a credit report?
Overall, it comes down to how you handle your credit card payments, your mortgage, and even how long you’ve had credit products. For instance, you have bad credit when your credit report is littered with missed payments, cancelled accounts, accounts in collections, debt settlements and other remarks.
