There are plenty of moments in life when you might need more money than you currently have. Maybe you’re buying a house or a new car, planning a big vacation or a special event like a wedding. Or, perhaps you need to cover the costs of something unexpected, like a medical emergency or urgent home repairs. Fortunately, banks and loan providers exist to help out when looking for installment loans no credit check Canada.
When we need a little or a lot of extra cash, installment loans are often the answer. Unfortunately, while these kinds of loans can be easy to obtain for those with great credit scores, they can seem much more inaccessible to others. Especially, to those with poorer scores or a lack of credit history. Is it possible to get an installment loan in Canada without a credit check? And what are the details, pros, cons, and risks of these loans? Read on to find out.
What is an installment loan?
An installment loan, as the name implies, is a loan in which your payments are made in installments, meaning you repay a set amount of money at regular intervals. These kinds of loans can also be known under the term ‘personal loans’. There’s a lot of variety in terms of the kinds of personal loans you can get in Canada. Loans are available for very different amounts, with different interest rates and terms, so it’s wise to look around and compare to find the best option. Here’s an interesting video we found that breaks down the difference between annuities and installment loans:
Why would I want installment loans with no credit check in Canada?
To start, there are many different reasons you might find yourself needing an installment loans no credit check Canada. Here are just a few common examples:
- Home – Installment loans can be needed to cover the costs of home repairs, home improvements, or new home appliances.
- Car – These kinds of loans are commonly taken out when people are buying a new car or getting repairs to their current vehicle.
- Events – You might want to get an installment loan to help pay for a big event, like a wedding, or to put towards a vacation.
- Medical – Installment loans can be an option when you have a medical emergency and need to pay for treatment and care.
Can I get a loan on welfare?
Canadians on welfare might find themselves in need of a loan to help pay for goods or services that their welfare payments simply can’t afford. Also, if you’re wondering whether or not you can get a loan while on welfare, the short answer is yes. But, there are some caveats and details to think about.
First of all, it’s important to note that being on welfare doesn’t affect your credit score at all, so if you have a good credit score but find yourself on welfare, this can aid in getting a loan approved.
Even if you have a poor credit rating, however, it’s still possible to get a loan on welfare. To get any kind of loan, you need to have some kind of income. Welfare is classed as income, so there are plenty of lenders who will provide loans to people on welfare. Your options include:
- Payday/Short-term loans – Payday or short term loans are usually for relatively small amounts of just a few hundred dollars and can be relatively easy and quick to obtain, even on welfare. You simply need to show that you get enough welfare money to make the repayments.
- Auto title loan – This kind of loan involves using your own vehicle as a form of collateral, and it’s a good option for people on welfare to get approved for a loan more easily. It means that if you can’t make the payments, your car or other vehicle may be repossessed. Both auto title loans and payday loans have high interest rates, however.
This being said, it is important to understand that repaying a loan is extremely important. Especially, repaying your loan on time as agreed upon with your lender. This way, you can avoid getting into a debt trap where it will be difficult to repay your original loan.
Pros and Cons of Installment Loans with No Credit Check in Canada
Installment loans can be essential in many different situations, but it’s vital to think things through and do your research before applying for one. Nevertheless, these kinds of loans have plenty of plus points. But, there are some drawbacks to be aware of as well.
| Pros of Installment Loans | Cons of Installment Loans |
SimpleUnlike other types of loan, an installment loan is very simple to understand. You borrow a set amount of money and pay it back in manageable installments that work for you. All you really need to worry about is ensuring you have enough cash to cover the installments, and since you know exactly when and how much you need to pay, it’s quite easy to stay in control. | StrictOften, trying to get approved for an installment loan can be a challenge, especially if you have a bad credit rating. It can be quite a time-consuming and frustrating procedure. Many banks will simply refuse applicants with bad credit scores and have quite strict rules about who they give these loans to. |
FlexibleWhen applying for installment loans, you’ll see a lot of different options. These kinds of loans can be for such a few hundred dollars to buy something like a new washing machine. However, they can be much larger amounts to buy a vehicle or something else. You can compare loans from lots of banks and providers, with different rates, terms, and installments, finding one that works for you. | InterestWhen banks or lenders give out any kind of loan, they have to make some sort of profit out of the deal. This is where interest comes into play. All loans will come with interest, but the rates can vary enormously depending on who you borrow money from. Ultimately, this means that no matter how much money you borrow, you’ll always have to pay back more. |
Improve CreditGetting and paying off an installment loan is a super way to boost your credit score. In fact, it’s one of the most effective factors in determining your credit score overall. This will lead to more advantages in the future, with a better credit score making it easier for you to get approved for other loans. | RisksThere are some big risks associated with taking out loans. This is always a part of borrowing money from anyone, and it’s vital to be aware of the risks (see below) before signing on the dotted line. Research, comparisons, and finding the best lender are essential things to do when preparing to take out installment loans no credit check Canada. |
Risks of Installment Loans with No Credit Check in Canada
As well as the pros and cons listed above, it’s important to remember the possible risks of installment loans no credit check Canada. Ultimately, there are two main risks to think about:
- Debt – As soon as you take out a loan, you put yourself into debt with bank or alternative lender. If you have enough income to cover the costs of the installments, then that won’t be a problem. However, if you start missing installments and find yourself struggling to keep up with the payment plan, things can swiftly start to spiral out of control and you can end up in a vicious cycle of debt as the interest racks up and you have to pay more and more money out each month.
- Credit Score – Even applying for an installment loan can harm your credit score. When you apply, a bank might perform a ‘hard credit check’, which actually has the potential to lower your score. Not only that, but if you do get approved for the loan but start missing payments or making late payments, your score will also start to drop, putting you in an even worse situation than when you started and making it harder to get approved for loans in the future.
Can I get 6 month loans without a credit check in Canada?
You might be wondering whether 6 month loans with no credit check in Canada exist. Well, they do. Banks don’t usually offer these kinds of loans, but other lenders do. A no credit check loan means that the lender won’t even run a credit check at all. Instead, they’ll look at other financial factors like how much you earn each month through your job or other means like welfare payments. They’ll study each applicant on a case-by-case basis. Essentially, giving you a chance to prove that you’ll be able to make the payments.
Can I get a $500 loan and pay it back over 3 months?
If you’re short of cash and need a $500 loan over 3 months in Canada you can pay back quite quickly. A short-term loan or payday loan might be the answer. Banks and providers do offer these kinds of short-term loans in Canada, and you don’t necessarily need a good credit score to get one. You simply need to be a Canadian citizen, aged 18 or above, have proof of some kind of income to show that you’ll be able to pay off the loan, and have your own bank account.
| Pros of Payday Loans | Cons of Payday Loans |
Speedy Approval ProcessIf you’re looking to apply for a short-term or payday loan, it usually means that you need money quickly. Fortunately, these types of loans are among the fastest to approve. In fact, you can apply one day and have the money in your account literally the very next day. | High InterestOf course, one of the big downsides to short term loan is that they typically come with very high interest rates. This can mean you end up paying back a lot more than you borrow. So, the overall ‘value for money’ of a payday loan isn’t great and you need to be prepared to handle the high amount of interest. |
Credit Score Doesn’t MatterHaving poor credit doesn’t matter too much when applying for a 3-month loan. In fact, many lenders won’t even do credit checks at all on these kinds of loans. Instead, they’ll simply ask you to provide some evidence to show that you can afford to pay off the loan. | Unscrupulous LendersPayday loans don’t have the best reputation as some lenders can be very unscrupulous in their approach, with some even ignoring certain rules and regulations. It’s very important to search around and find a lender you can really trust before applying for one of these loans. |
FlexibleShort term and payday loans offer a lot of flexibility. Once you have the money, you can do whatever you want with it. For example, covering the costs of car repairs to paying for a trip away. There aren’t any restrictions or rules on how you spend this cash. | The RiskWith any kind of loan, there’s always a risk attached. What if something unforeseen happens in your life? What if you can’t make the payments? These risks are elevated with a payday loan, because the interest rates are so high. There’s always a risk that you might end up in debt. Failing to make payments will damage your credit score too. |
Are there alternative lenders to banks?
Yes, there are plenty of alternative lenders out there. In fact, when looking for any kind of loan, it’s important to remember that banks are not the only option. Often, banks are stricter in terms of how they hand out loans. Furthermore, they tend to be less likely to give loans to people with bad credit.
This means that if you are looking to get installment loans with no credit check in Canada, it may be a challenge. Additionally, if you want to obtain a loan without a credit check, going to an alternative lender is often the only real option. Alternative lenders will often be more lenient and willing to learn more about your situation. This is in order to possibly approve you for a loan with a bad credit score.
Banks often run credit checks on everyone applying for a loan. An alternative lender will give you other options. They’ll ask to see some evidence of savings or income. For example, asking for details about your employment and using that information to determine your loan eligibility. Sometimes, they won’t do credit checks at all.
