Lifestyle   Money
By Consumer Team | 16 May 2022

The Top Personal Loans: Quick Cash Loans with Poor Credit, Same Day Approval, Online Application

Are you looking for a personal loan and need quick cash right away? Personal Loans with same day approval are possible to get, even with a bad credit score!

Check out our guide for the best personal loan offers below. Find suitable loaning options that suit your financial needs!

A Guide To Getting Personal Loans With A Poor Credit Score In Canada Given the multifaceted nature of financial obligations and never-ending bill payments, it’s not uncommon for individuals to resort to loans as a means of filling their financial gaps. In this article, we take you through a detailed guide on how to secure personal loans in Canada with a bad credit score or even none at all.

What Is A Personal Loan?

A personal loan may be defined as a fixed amount of money borrowed by an individual to meet personal needs. This type of loan is only issued to individuals and not to corporate entities or companies. For most banks and other money lending organizations, restrictive terms guide what the borrowed funds can be used for. However, most Canadians apply for personal loans to get a house, getting a car, paying for school, or medical bills. The rationale behind an application for a personal loan is the inability to meet your financial obligations. For an application to be successful, an individual must show that they are willing and financially capable of repaying the loan.

Types Of Personal Loans

There are three types of personal loans based on the requirements and terms associated with them. They are Secured loans, Unsecured personal loans, and Reverse or Credit Building Loans. These personal loan types will now be explained below.

  • Secured Loans: A secured personal loan is one in which the individual must provide collateral in the loan application. Collateral may be a car, house, or even jewelry and serves as security for the bank or lending organization. Secured loans usually feature lower interest rates than other types of personal loans.

  • Unsecured Loans: An unsecured personal loan features no collateral. While the bank or money lender doesn’t require you to put up collateral in case of payment defaults, unsecured personal loans require a higher credit score as well as a higher interest rate.

  • Reverse or Credit Building Loans: this may be likened to a form of insurance. Here, an individual pays up the intended loan amount in advance. The deposited money can then be withdrawn as a loan. It’s also referred to as the Cash Secured Savings Loan and can help improve your credit score. Like other loans, the credit building loan also features a payment interest rate.

How Do I Know If I Have A Poor Credit Score?

Credit scores are important when calculating the loan amount an individual is entitled to or qualified for. A bad credit score may limit your chances of getting a mortgage, car loan, or credit card. A bad credit score may also affect your chances of getting employed. Thus, you need to know if you have a good or bad credit score.

Ascertaining your credit score in Canada can be done by requesting your credit file. A credit file is a document that contains your credit history, loans you took and their repayment schedules, debts, income, and every other financial information. Although a credit score isn’t recorded in your credit file, it’s calculated using the information in the latter.

Credit scores are ranked from 300 to 900 and get better as they go higher. The higher your credit score, the lower the probability of you defaulting on loan payments and vice versa. This means that the higher your credit score, the higher your chances of securing that loan or mortgage you’ve been eyeing. The mathematical formula used in calculating credit scores isn’t publicly available. However, prompt payment of bills and loans increases your chances of a good credit score.

A poor credit score usually ranks at 574 and below on the scale. Thus if you have a credit score of 574 or lower, financial institutions may not consider you capable of meeting the demands of the loan or mortgage. Your credit score information is calculated by TransUnion and Equifax, Canada’s national credit bureaus. You can request your credit file and score from either of these two bureaus and get them mailed to you for free.

Can I Get A Loan With A Poor Credit Score?

Having a bad credit score doesn’t mean it’s the end of the world. With careful financial management and guidance, you can go from a bad credit score to a good one in a few years. If you’re wondering what your chances of getting a loan with a bad credit score are, then we have good news for you. Various financial institutions are offering personal loans to individuals with poor credit scores. So, yes. You can get a loan with a bad credit score.

What Are The Requirements For Getting A Personal Loan In Canada?

Whether you’ve decided to take a personal loan or you’re still considering the option. It’s pertinent to note that several factors determine your qualification for personal loans in Canada. Some of these include being at least 18 years old, a resident of Canada, holding a bank account, and others.

Documents Needed Before Applying For A Personal Loan In Canada When applying for a personal loan in Canada, the credit facility or bank will require you to present certain documents to process your application. These documents help to prove your identity, current financial status, credit score, and generally determine your qualification for a loan. The documents you’ll need to present are the following:

  • A valid identification card such as a passport or driver’s license

  • Proof of Canadian residence and income

  • Ownership and proof of a bank account

  • Your credit history

  • Proof of monthly expenses

  • It should be noted that having these documents doesn’t automatically qualify you for a personal loan. Further checks such as your credit score and debt/income ratio go a long way in determining the success of your application.

What Payment or Interest Rates Are Involved?

Interest rates on personal loans vary depending on the lending facility as well as the type of loan sought. Nonetheless, rates may be as low as 3% and as high as 46%. In the next section, we’ll consider some of the most popular low-interest personal loan facilities in Canada for individuals with a low credit score.

General Overview Of Some Available Bad Credit Loans In Canada

The following are some of the credit facilities offering low-interest loans to individuals with bad credit scores in Canada.

  1. LoansCanada: This credit facility offers both secured and unsecured loans to bad credit score holders in Canada. Whether you’re borrowing to augment your business, pay off debts, or get a new car, LoansCanada is a good place to look. Interest rates are as low as 3% but may rise to 46.9% depending on the amount of money borrowed. There are no credit or income limitations. LoansCanada offers a chance for you to borrow as little as $500 or as much as $300,000.

  2. LoanConnect: LoanConnect isn’t by itself a lender. Rather, it offers Canadian residents an opportunity to meet various lenders through one application. Applications can be submitted online and granted within a few minutes. The loans offered by this vendor are unsecured and accessible to all individuals regardless of their credit history. The interest rates vary from 4.8% to 46.96% depending on the credit history of the applicant.

  3. LoanAway: this credit facility offers unsecured loans of up to $5,000. Payments may be made within or across 36 months. Qualification is hinged on being 18 or above, lack of bankruptcy, and being employed for at least 3 months preceding the loan application. Applications can be completed within 8 minutes with approval gotten in 24 hours.

  4. Easy Financial: With Easy financial, you can choose any category of personal loans. To qualify for a bad credit loan with Easy financial, you must be at least 18yrs old, reside in Canada, hold a bank account and be in employment for at least 2 months preceding your loan application. Asides from offering secured and unsecured loans, Easy financial also helps you to build your credit score.

Benefits Of Taking Bad Credit Loans

  • Taking a bad credit loan offers many advantages, some of which we’ve itemized below.
  • Bad credit loans grant you access to lower interest rates
  • They are a good avenue to build your credit score
  • Bad credit loans allow you to borrow lump sums at once

Should You Be Taking A Bad Credit Loan?

Taking a loan isn’t necessarily a bad thing. If you’ve recently moved to Canada and have no credit score but bills to pay, a bad credit loan might be a good opportunity to build your credit score and meet your financial obligations. Similarly, they serve as a great way to raise funds for mortgage, rent, education, or scale up your business in the short term.

However, it’s essential to borrow what you can afford to pay back to avoid bankruptcy. It’s also important to put the loan to the purpose indicated in your application form.

Conclusion

In conclusion, loans are generally a great way to boost business and achieve your goals without delay. When put to good use a bad credit loan offers you a chance to not only improve your credit scores but also afford a better life and financial security.