When you have bad credit, loan options can be limited. Finding personal loans or installment loans with bad credit doesn’t have to be a challenge. GoodCheddar works with several lenders that can help find an option right for you.
Applying for Bad Credit Loans
When applying online for bad credit loans, most lenders want to see:
– proof of employment (or regular income for some)
– valid government ID (to confirm being of age and a resident, name and similar)
– an active Canadian bank account (for ID verification, deposit)
Some may want to see a Social Insurance Number (SIN) or Canadian Drivers License and the overall process for applying online is fairly straightforward. But most will review your request and look at some type of alternative data to evaluate your application. The good news is there are lenders of online loans for people with bad credit and even though these can come with higher interest rates than what is available to someone with good credit, it means you still have options. Some lenders will also consider alternative reliable income like benefits.
Those with bad credit looking to borrow will usually find that installment loans and payday loans will be the options available to them.
Bad Credit Online Loans Guaranteed Approval
Online loans and guaranteed approval are something that do not go together, despite what you might read. This is something that some lender claim as they know that some people are looking for it. Usually because they have a bad credit history and have been denied loans in the past. But if you think about this, it simply doesn’t make sense for lenders to provide guaranteed approval for personal loans. This doesn’t really have so much to do with bad credit, and more about being repaid what is borrowed. Many that seek payday loans have bad credit, and direct lenders know this. Every lender is different, and some are more willing to take the risk, but direct lenders don’t necessarily do a credit check for every application they receive. Often they use different ways to determine or gauge the risk of loaning money to someone. In many cases, it does not involve checks with credit bureaus. Alternative checks can include that you are employed, how long you’ve been employed, whether you own or rent, what your salary is, and similar considerations.
Most direct lenders offering loans for bad credit don’t use what is referred to as a hard credit check, which would involve one of the major credit rating agencies or bureaus like Equifax or TransUnion. For small dollar loans of unsecured loans, this is even less likely, and does not include guaranteed approval, no matter what you might read or hear.
The idea of guaranteed approval loans can be deceiving, since lenders don’t truly offer this and would soon be out of business if they did not do some kind of verification about whether someone is a suitable candidate to lend money to. To think that guaranteed approval exists before your application for a personal loan from a lender is reviewed should be considered unlikely and if you find such an offer, you might want to use caution as it might be too good to be true. While some might make claims of guaranteed approval or no credit checks, direct lenders will say a number of things to attract customers.
Online loans with guaranteed approval are what you might call a myth, since any lender that might plan to stay in business would need to review an application before offering a loan. It’s necessary so a lender can reduce the risk to themselves and increase their odds of being repaid what is borrowed. Since a personal loan is an unsecured loan, the lender does not have collateral if you were unable to pay, and relies on details like your credit history along with employment and salary info to make decisions about who they might allow borrow.
The simple fact is, there is no such thing as guaranteed approval, and the same goes for claims of no credit checks as well. A lender is taking a risk when allowing someone to borrow, and all lenders make use of some form of credit check. It’s for this reason that claims of a guaranteed approval loan is a bit deceiving. Direct lenders are not about to allow you to borrow if they see a problem and unlikely to get repaid.
All too often the messages of some direct lenders use with personal loans like instant or guaranteed approval are misleading. While they are often willing to provide a personal loan to someone with bad credit, guaranteed approval is not something lenders offer.
Bad credit is not all that uncommon and those looking for some form of personal loan or unsecured loan often have a less than stellar credit history. Some of the more common reasons that some might be interested in a personal loan can involve fixing their credit card debt or debt consolidation to lower their monthly payments and outstanding amount owed. Online loans with bad credit are possible, while guaranteed approval is unlikely. Finding guaranteed approval personal loans with bad credit from direct lenders is a bit of a myth. If you wanted to borrow $500 or $5,000 you can be sure a lender would look at your employment status and other details to ensure that they might be repaid. Borrowing money of any amount for personal loans makes sense from the lenders side that they try to eliminate risk and get their money back.
Bad Credit Loans Instant Approval
Looking for instant approval is similar to guaranteed approval, although some lenders will provide fast decisions when applying online for bad credit loans. But instant approval loans are not always in your best options, and you want to look at details such as the terms and interest rates to ensure that they will work within your ability to repay the loan and make any necessary installments or payments on time.
Where the option is available, you might find that taking a longer term for repaying the loan can lower your payments and make things more manageable when borrowing. When choosing this option it’s important to realize that a longer repayment term means you might get a lower scheduled payment amount but are likely to be paying more for the loan in interest over time.
Bad Credit Loans from Direct Lenders
For many with bad credit the idea of personal loans or installment loans from direct lenders that come with guaranteed approval is the sort of fairy tale that some dream of. With few options available, some have destroyed their personal credit rating by either defaulting on payments, having a poor repayment history, or a combination of both and possibly other issues.
Direct lenders of online loans might promise guaranteed approval, but this sort of practice by some doesn’t actually exist since practically every lender wants to ensure they will be paid back, and will typically validate employment and other things. While it isn’t usually a hard credit check with most installment loans for bad credit in Canada, it is still a form of credit check that most lenders do. If there was such a thing as loans with guaranteed approval, you would just have to request the money and it would be handed over, no questions asked. But in the real world, loan requests don’t work like that and there is an application process so a lender can review your request and decide whether you consider you credit worthy or too much of a risk.
Bad Credit Loans No Credit Check
Finding urgent loans for bad credit with no credit check would also be misleading because much like the idea of guaranteed approval is doesn’t really exist. In some cases a lender might review your application and check your credit score with the main bureaus, but in other cases they might rely on alternative data and solutions, but it would still be a form of a credit check or validation prior to approving an application. The idea of finding bad credit loans with no credit check is another myth, but there are loan options available when your credit is not so good.
Easy Loans for Bad Credit
Applying for online loans is easy, bad credit or not. The process requires providing some details about yourself and usually takes a few minutes to complete. Even with extremely bad credit, loans are still an option for many. Due to higher interest rates most emergency loans for bad credit should only be used when absolutely necessary and there are no other options. Any easy loans for bad credit should be carefully considered and the terms have been looked over so that as the borrower you have a thorough understanding of the agreement.
Bad Credit Loans Online vs Banks
When looking for a loan with bad credit, online lenders are often more likely to be an option than banks. Also, online loans can be easier and faster to apply for. When it comes to loans, banks are usually not fans of borrowers with bad credit. They also tend to take a lot longer to review your application. In situations where you can use quick cash or fast funds for bills or unexpected expenses, an online lender is more likely to be your better option. Many Canadian online lenders can review and make a decision the same day about your application, and you can often receive the funds in your account as soon as the next business day.
Personal loans can be a good way to consolidate debt, improve the health of your credit rating, and debt to income ratio or other factors so that you increase your credit score.
Good Cheddar aims to clarify these types of questionable solutions and educate consumers, and works with many reputable partners. While we are not a lender, we are able to introduce and connect consumers with Canadian lenders for online loans.
Start by choosing a lending option above, completing and submitting your application. If you’re approved, you complete this part of the process by signing your loan agreement, which contains everything you might need to know about payment schedule and amounts due. Make certain that you read your agreement before signing. If there are any other requests to complete your application such as providing further info it would be requested almost immediately. Once you have provided all required info, your funds are typically deposited in your bank account by the next business day. Many lenders also fund approved loans by e transfer which is a very fast way of getting the loan to you. The e transfer option is becoming more common with many lenders now offering this.