PERSONAL FINANCE BLOG

Money shouldn´t stop making your plans come true. Learn how personal loans can help you!
Why Bad Credit Loans Don't Have To Be a Last Resort
7 Jan 2019

Why Bad Credit Loans Don’t Have To Be a Last Resort

With all the negativity surrounding them, you may be wary of choosing bad credit loans as a way of helping yourself out of a tight financial spot. Don’t be. The truth is that you don’t have to be afraid of these products if you approach them with the right mindset.

Bad Credit Loans Canada’s Bad Reputation

Bad credit loans are often maligned as one of the worst ways to get your hands on some extra money, and they didn’t come by this reputation by accident. These types of loans are some of the only ones available for people who don’t have the best credit, but they are usually quite costly to the consumer using them, charging high interest rates that only add to your debt over time if you don’t pay down the principle as quickly as possible. However, the people who use them are less likely than most to be able to do this due to the fact that poor credit generally goes hand in hand with a lack of funds. Because of this, they are criticized as being exploitative of the poor and vulnerable who have few other places to turn to for help.

Understanding the Other Side

Like any story, though, there are two sides to this controversy. When a lender offers money to people who they understand pose a definite risk to that money (in other words, have bad credit), they need to make it worth their while to do so. This means higher fees and stricter payment expectations are necessary impositions on the borrower’s end – far higher than they might otherwise see if they had better credit. The sticker shock that you might experience as a bad credit borrower is understandable, but it’s also an inescapable part of the process for a reason. If these products could reasonably be offered with lower interest rates, you would see many lenders attempting to undercut their competition and fill this niche in the market.

If you choose to work with these kinds of lenders, you need to make sure that you are also making a careful and calculated decision. Getting money this way is going to cost you a fair amount, so you need to be sure that what you’re getting out of the exchange is worth it. Never do it on a whim – always take a while to consider the pros and cons of the situation and whether or not there are any other viable solutions. You could try to secure the money from another source, save up to buy the item or service with cash, or just go without whatever it is that you want to buy. Any of these options are available to nearly everyone and will help you to escape any lending propositions that you are not happy with.

Why Take the Plunge?

All the Details on Bad Credit LoansWith that cautious outlook in mind, there two primary occasions in which one might want to tap into this source of credit regardless of the cost.

The first is when you’re trying to buy something productive or something that you need. Waiting until you save up the money or have your credit back to where you want it to be before you purchase these things may not be the wisest idea in the long term. With a car, you could not only enjoy greater mobility in your personal life, but you could also potentially get a job farther away from the transit lines around your home or take on more hours late in the night when the buses are no longer available. With new equipment for a business, you could not only get the satisfaction of being your own boss, but you could also potentially create a new revenue stream and make yourself richer in the long run. You stand to gain more by purchasing these sorts of things now (at least hypothetically) than you do if you wait to get them.

There are also some situations in which there may be sentimental reasons not to postpone or cancel a purchase. One of the more common reasons that many individuals consider taking a loan is to buy gifts for Christmas or someone’s birthday. Gift-giving is not a necessity, of course, and you should never spend more on gifts than you can actually afford. However, some people, especially those experiencing a temporary problem with their income flow that they can reasonably expect to be resolved soon (such as a furlough or a late paycheck), feel that it is worthwhile to borrow a little in order to make their loved one happy. If that matter to you, bad credit loans are an option. Another such instance where someone might seek a loan is when a loved one dies suddenly and there are funeral expenses to be paid. Even if you don’t have the money on hand right away, you may have strong feelings about having the funeral a certain way and be willing to pay the extra cost to do it. In cases like these, the regret of not forging ahead with bad credit loans may be harder to deal with than the debt would have been.

Get All the Details on Bad Credit Loans

Just because taking out bad credit loans is often a good idea doesn’t mean you should do it blindly. Making sure that you have experienced help that you can trust on hand during the borrowing process can really help you to come out ahead, and that’s what Bonsai Finance is here for. We’ll search up and show you all the relevant information about the best of the bad credit loans Canada has available, so all you have to do is pick one out. Deciding to get the loan in the first place might be a tricky decision, but at least you