Loans for Bad Credit

When a financial emergency happens, the need for fast cash becomes a necessity. For those that don’t have the money in their savings or some sort of emergency fund a situation like this can require the possibility of borrowing. 

But when an individual has a poor credit history it can be challenging to find lenders that might consider their loan application. This is especially true if you turn to a bank which has higher requirements to get approved. Often the answer is to look at online lenders, where many will look beyond your credit score and use alternative data for making decisions. 

Choosing loan options for bad credit is a process where you should know what to expect and what would be reasonable options. It is well worth the time to make yourself familiar with the various terms and things to expect when borrowing. 

Loans for Bad Credit Canada

There are some lenders that do not only look at employment as an income source and may also consider social assistance benefits for loans. While every lender is different, some will look at  various benefits from disability to other types for consideration. 

When you have bad credit a loan is more difficult to qualify for, and choosing the right one for your situation can help with faster approval and less disappointment. Having a poor credit history in Canada makes finding a loan for bad credit challenging, but it’s not impossible. 

The following chart provides a basic (estimated) look at options for urgent loans for bad credit that offers an idea of the interest rate that might be expected. 

Credit ScoreRatingSample Interest Rate
300 – 559Very Poor18% to 47%
560 – 659Poor15% to 35%
660 – 724Fair7% to 20%
725 – 759Good6% to 15%
760 – 900Excellent5% to 11%


A credit score in Canada is a number from 300 to 900 provided by one of the major credit bureaus like TransUnion or Equifax that is based on things like your payment history, credit mix, credit utilization and more. This can also include new credit inquiries and amounts owed (debt) as well. 

RELATED: How to Get Approved for a Loan with Bad Credit

According to Equifax a credit score of 660 or better is often considered good, while a score of 560 or below would be considered a bad credit score. Many lenders have their own way of doing things, and this might include how your credit score number represents what band your profile is in. For example, some may consider anything below 600 a bad credit score. 

When choosing a loan, you should keep in mind that you don’t actually get the choice. If this were the case everyone would probably go for the lowest APR option. But the reality is that your credit score has a lot to do with what you might be eligible for. Those with a fair to bad credit score are more likely to be presented with an installment loan option, which is much better than a payday loan as the term is longer and the monthly payments are smaller. It is recommended to avoid payday loans if possible as these can create deeper financial problems over the long term. 

When considering a loan it is strongly advised that you read the entire loan agreement before signing so that you can become familiar with the terms, which would include rates, APR, monthly payments, fees and more. Even if you only require a small loan the above is still a recommended guideline for finding the right solution. A few other considerations would be what your income is, and whether you were applying for a small loan or more like a $10,000 loan as it is something that lenders will look at, along with your debt to income ratio and if you have taken loans in the past.

Loans for Bad Credit with No Credit Check or Guaranteed Approval

You should beware of offers where they mention loans with guaranteed approval or other phrases such as no credit check loans since these can be red flags for the type of lender at times. It might not always be the case, but some online lenders mention these types of language because they know customers are looking for these types of options. But to make it simple to understand why these can be a problem, no reputable lender would offer no credit check loans with guaranteed approval since they all need to review an application, which involves either a credit check, or using an alternate form of data, which is still a credit check using sources other than the main credit bureaus. Finding lenders that might be part of the Canadian Lenders Association (CLA) or a similar organization can help with selecting an option.

When looking at getting an unsecured loan for bad credit the first thing you should do is find out your credit score so that you will have an idea of the options that might be suitable for you. Even if you are stressed, you should still take the time to know about any terms before taking urgent bad credit emergency loans or you may find later that you wish you had looked into things first. 

Now that you know some basics about what to look for before deciding on a lender, take a look at some of the installment loan options that might work for your situation.


Further reading to help you determine your options and what might be right for you.

How to Get a Loan with Bad Credit

How Bad Credit Can Affect You 

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