One of the reasons why people get rejected for loans in Canada is bad credit. However, people with bad credit can have bad credit loans Canada as a great alternative.
Having bad credit is one of the most discouraging things that no one wants to happen to them. This is because it makes it very hard for people to get cash when they have financial emergencies. Many lenders will check your credit score before they approve you for a personal loan. This may make people with bad credit feel like they have no options to solve their financial problems. The good news is, there are many options you can get from bad credit loans Canada.
Types of bad credit loans
Different lenders may offer you different types of loans with no credit. All these loans may be under two main categories of bad loans for bad credit. These categories are secured and unsecured bad credit loans.
- Secured loans for bad credit – The lenders of these loans allow you to attach some valuable assets to act as security or collateral for the loan. Examples of such loans include car loans and mortgage loans. In a car loan, you attach your car as collateral. With the mortgage, on the other hand, you are allowed to take a loan against your home equity. These assets may be repossessed by the lender in an event that you fail to repay the loan.
- Unsecured loans for bad credit – With these loans, the applicant is not required to attach any asset as collateral. Most of these loans may have very short repayment periods or have higher interest rates. Examples of such loans include the payday loans, direct online loans, peer loans as well as bad credit guaranteed approval loans.
What are the differences between traditional lenders and bad credit loan lenders?
- As opposed to traditional lenders such as banks, a few bad credit loans lenders may offer both secured and unsecured loans with bad credit.
- Due to the high risks associated with people who have bad credit, these loans are mostly offered under high-interest rates, low amounts and short repayment periods. Banks may offer larger amounts of loans and long grace periods.
- With the bad credit guaranteed approval loans from some lenders, people who have deliquescent accounts, collections or even filed bankruptcy can still get a loan. This is not possible with such lenders as banks.
- Most of the alternative lenders have online platforms for loan applications. This makes it very easy, fast and convenient than bank loans.
- Since most of the alternative lenders do not check on your credit, people with adverse credit histories will still get approved for the loans.
How can bad credit loans Canada save your situation?
Bad credit loans can be very great alternatives for people who get rejected by other financial institutions. The loans can also be used as a tool to rebuild your credit score. You should, however, ensure that you take an amount you can afford to repay. If your lender does not penalize early payment, you can use early payments as a way of escaping the high interests. Your success in these loans depends on your knowledge and the lenders you choose.
How we can help
At Bonsai Finance, we work with the best lenders in Canada. We also help you not only to choose the best loans for your financial situation but also assist you through the whole application process. Our team of experts is always ready and willing to work with you. If you feel that your bad credit score is a stumbling block to your financial solutions, you can use the bad credit loans Canada to change the story. Contact us for any help.