Bad credit personal loans Canada are offered to any Canadian with bad credit but is in need of cash. If you have run out of ideas on where to get cash, they are a great solution.
Not everyone has a savings account and if you happen to have one chances are you are not able to save as much as you would wish. If you are a business person, losses tend to happen. In order to keep your business running smoothly, you are forced to borrow more than you can manage to pay back at times. You eventually end up having a bad credit reputation and are left to wonder where you will turn to for help. All hope is not lost though, it is possible to get bad credit personal loans Canada with longer terms, and larger amounts.
What bad credit personal loans are
A bad credit personal loan is a type of loan given to anyone in need of money and has tendencies of not repaying money given to them within the specified time. Therefore, his or her credit score has dropped below 620. Many people experience this and can affect their life tremendously knowing that they lack means to run their day to day activities. However, there is no cause to worry in such a case because bad credit personal loans exist. You can acquire them from online lenders or even credit unions. Lenders tend to charge higher interest rates, keeping in mind that you have a bad credit score and chances are that not all the people they will lend the money to will pay back. Most lenders will charge higher interest considering that they do not ask for securing. The interest covers for the possibility of them not being able to recover the entire amount from the borrowers. With a good credit score, however, you might be able to get loans at a lower rate.
What is a credit score?
A credit score is calculated data based on your credit reports. You are likely to have a credit report if you own credit accounts like mortgage, credit cards or loans. This report determines whether you will have a good or bad credit score. Lenders use this to determine how much they will give you and at what interest. A score below 630 is thought to be low and you, therefore, have a bad credit score. Fortunately, you will still be able to get a loan only that it would be charged at a higher interest unlike what you would have been charged if you had a good credit score. Bad credit loans are of two types which are:
- Unsecured bad credit loan – The borrower gets into an agreement with the lender and a contract is signed. Failure to repay the loan in time leads to a collection of the debt through legal means or via a collection agency. Examples of unsecured bad credit loans are student loans, installment loans, and credit cards.
- Secured bad credit loan- The borrower is required to hand over a valuable item to the lender for security. This item can be a car or title deed or a house. In case you fail to repay the loan, the lender can sell your asset and recover their money.
Benefits of a bad credit personal loans Canada
- You can borrow a large amount of money. This way, you will be able to take care of all your financial needs.
- By repaying the loan in time, it impacts positively on your credit score hence making you eligible for better loans with lower interest rates.
- The bad credit personal loans have a higher approval rate as compared to other types of loans.
If you are in need of financial advice and information on where to source bad credit personal loans Canada, contact us today and we will provide the much needed financial advice. We will also connect you to a pool of lenders we work with to help you solve all your financial needs.