Regardless of how careful you might be with your finances, everything may not go the way you plan it. There’s no guessing what the emergency might be a sick child, a faulty car, or some unexpected emergency. In a situation like this, getting your hands on bad credit installment loans guaranteed approval Canada, can be helpful.
But then again, what happens if you have bad credit? Does that mean it’ll be impossible to get that much needed loan? Most traditional banks don’t give loans to people with bad credit no matter the emergency. This is a huge bummer as it could even be an emergency situation. With installment loans, people with bad credit have alternative options.
Do Canadians With Bad Credit Get Guaranteed Approval For Installment Loans?
If you’ve ever been denied a credit card or a loan, declared bankruptcy, or you’ve defaulted in your debt payments, don’t worry, you’re not the only one. About 1 million Canadians are in the same boat as you, all with bad credit. Bad credit can affect all aspects of your life—it makes it extremely difficult to get approval for a credit card, or to take a loan like an auto loan or a mortgage.
Most people are of the opinion that having bad credit means they do not have an array of options in regard to getting a personal loan. As luck would have it, you don’t have to worry anymore as there are several lenders in Canada that are willing to approve bad credit personal loans.
What are Installment Loans?
Installment loans are typically applied for online. The borrower is given in a lump sum at the start of a transaction and is required to pay it back over a specified period of time. Usually, at biweekly or monthly intervals. In general, bad credit installment loans guaranteed approval Canada are smaller than personal loans. On the other hand, they’re typically bigger than payday loans online.
The terms of installment loans differ significantly than other types of loans. They are usually short term or medium term. Loans like these can be as short as 6 months and can also be as long as 5 years. Then again, the interest rate on bad credit installment loans is higher than that of personal loans because of their target market, people with bad credit. Here is an interesting video we found about which debt is best to pay off first:
Providers of Bad Credit Installment Loans Other Than Banks
The moment you apply for a loan, the first thing the lender does is to check your credit history. This information includes the basics like your credit score, if you’ve declared bankruptcy in the past and if you have ever defaulted on a payment. It’s quite disheartening for some people when their application is rejected because most banks in Canada will not give loans to people with bad credit.
Luckily, there are other options for people like these, as they can approach other lenders apart from traditional banks. Today, individuals who want bad credit loans can now apply to several private lenders for personal loans with some assurance that they’ll get it.
Alternative Lenders of Bad Credit Installment Loans Guaranteed Approval Canada
Alternative lenders are not like traditional banks that give loans to people with perfect financial history and high credit scores. Canadian alternative lenders will consider other factors as well. Check details with your lender before your application for a bad credit loan.
Let us look at key differences between the way alternative lenders and banks approach personal loans:
In Canada, some alternative lenders give bad credit loans with likely approval, even when the applicant has a delinquent account, a recent bankruptcy, collections, or a consumer proposal on his/her credit history. No traditional bank will give you that.
Where Can I Find A Bad Credit Personal Loan in Canada?
By searching the web, you can find several alternative lenders that offer bad credit loans in Canada. One of the reasons alternative banks can afford to give out loans like this is because they do not have to maintain physical structures. All their services are online, hence they can afford the risk of giving out loans to people with bad credit without charging excessive rates.
A lot of lenders that give bad credit personal loans have no credit check, because they consider several factors when they want to give such loans. On the other hand, the first thing a traditional bank will check is your credit score.
Alternative lenders usually charge higher fees and interest rates on installment loans with bad credit than traditional banks because they are taking a huge risk approving your loan. Both secured and unsecured bad credit personal loans are available with an alternative lender.
Installment Loans With Bad Credit
Be prepared to answer several questions about some areas of your financial life. This is especially true if you are applying for installment loans with bad credit in Canada. Alternative lenders look at other factors to decide whether or not to approve your installment loan request. Here’s a list of questions you may be asked before your loan is approved:
- Average monthly or yearly income.
- Employment status: if you are employed or self-employed.
- The size of the company where you work.
- Whether you have anybody to co-sign your loan.
- If you’re going through bankruptcy currently.
- How much is your debt portfolio at the moment
Things to Look Out for When Taking Guaranteed Installment Loans with Bad Credit in Canada
Before taking an installment loan, you have to do your homework thoroughly. It’s quite unfortunate that there are some unreliable and unprincipled installment credit lenders. So, try to be on the safe side by looking out for these when taking bad credit installment loans guaranteed approval Canada.
- Interest rates: Some alternative lenders charge excessive interest rates beyond what’s acceptable. Make sure you check the lender’s maximum rates before applying for the loan.
- Fees: Ensure you read the fine print thoroughly before signing the loan. Check for high or hidden fees.
- What are the penalties if you make a late payment, miss a payment, or you want to pay off your loan earlier than agreed?
- Credit reporting. If you are making regular repayments on an installment loan, it should reflect on your record. Ensure the lender reports regularly to the appropriate credit agencies so you can rebuild your credit score.
