In a perfect world, everyone would have fat savings account to dip into whenever unanticipated expenses pop up. But the reality is, not so many people are capable of overcoming their financial woes without a little, and sometimes a lot of help. Luckily, there are various ways of getting the cash you need to sort out your expenses and bad credit loans are one of them.
If you’ve been turned down after applying for a traditional loan just because you have bad credit, we can help you get the financing you need without much of a hassle. At Bonsai Finance, we’ve built ties with many lenders willing to offer bad credit loans to people with dark credit histories. Want to find out more about these types of loans? The following are the most important aspects:
What are Bad Credit Loans?
Bad credit loans are types of personal loans that are normally given to two groups of borrowers: those with bad credit, and those with no credit. You’re considered to have ‘bad credit’ if you have late repayments, missed repayments, has a bankruptcy or a County Court Judgment against your name. On the other hand, you’re considered to have ‘no credit’ if you have never taken on any form of loan and thus have no credit history behind you.
The next important question is – how do you know that you have bad credit? The answer lies in a 3-digit number known as the credit score. This magic number is between 300 and 850, and it’s what most lenders use to gauge your creditworthiness. The higher the score, the more creditworthy you’re considered to be and vice versa. Most lenders consider those with a credit score below 550 to have bad credit. You can get to know what your credit score is by obtaining a copy of your credit report from both credit bureaus in Canada, TransUnion and Equifax.
Characteristics of Bad Credit Loans
1. They are hard to come by
Having bad credit means that you have a history of repaying your debts late or not at all. This makes you a high risk to lenders. From where they stand, you weren’t good at fulfilling your obligation with your previous lenders, therefore, how can they expect you to fulfill your obligation with them? So, getting lenders who are willing to take that risk with you won’t be easy, especially when searching on your own.
If you haven’t been successful at obtaining a bad credit loan, don’t stress any further. We can help you get access to a wide range of loan products from lenders who offer these types of loans. Since different lenders cater to different borrowers with different credit score categories, we will help you narrow down your search down to those who cater to borrowers within your category.
2. They don’t come cheap
Borrowers with bad credit are high risk borrowers, so lenders usually charge higher interest rates to compensate themselves for that risk. That’s their way of making more money on these risky lending deals, which makes up for the very real probability of many of their borrowers defaulting.
Even though that bad credit loans canada often come with high interest rates, it’s possible for you to get lenders with lower rates. We work with authentic lenders who have very competitive rates.
3. They can help rebuild credit
These types of loans are good at helping those borrowers with no credit establish credit and those with bad credit rebuild credit. The first step to rebuilding credit with these types of loans is to choose a lender that reports back to credit bureaus. The second step is to repay the loan that you take out on time. That way, you’ll be in the good books.
Bonsai Finance helps you get bad credit loans from authentic lenders with some of the competitive interest rates on the market today.