If you’ve ever needed a loan and have been turned down for fear of your bad credit score, you know how frustrating it can be to find someone who will give you a chance. There are several options that can help turn around your struggling situation, such as bad credit loans Canada or car title loans. Here is an overview of the most-used loan options in Canada:
-Car title loans
Car title loans are very popular bad credit loans Canada as they allow you to secure a loan based on the value of your car. These provide access to cash with little paperwork and are very easy to qualify for. The downside is that they are often expensive.
-Payday loans:
Payday loans are one of the most common types of loans available in Canada, because they are usually easily available and have favorable interest rates. However, you should be aware that it can take a long time to qualify for this type of loan as the companies have many requirements. There are several things that determine your ability to get a payday loan, including your income, past due bills and other factors. Payday loans are usually only available to those with an active bank account and credit score between 620-700.
-Checking accounts:
The majority of Canadians have checking accounts, which allow you to manage your finances easily and make small cash withdrawals without having to worry about overdraft fees or other negative impacts on your credit score.
-Bad credit loan
A bad credit loan Canada is just that—borrowers with poor scores are given access to cash that will be deposited directly into their accounts. In most cases, borrowers can choose between a fixed-rate line of credit or a variable-rate line of credit since these can be beneficial depending on the needs of the borrower. As opposed to a simple title loan, borrowers will have to provide information on their employment and income levels in order to qualify for this product.
-Secured loans
A secured loan is one that requires collateral. Borrowers of these loans can expect to pay in full over the course of a number of months with low-interest rates and fixed payments. This type of loan also has lenient qualification criteria including a maximum interest rate equivalent to Prime plus 5%. The downside is that you must have good credit in order to be eligible. Borrowers who do not qualify for this type of loan will often borrow cash from friends or family members instead. These are perfect for someone with bad credit who wants to get something they can use as collateral, like a car or a boat.
-Unsecured loans
Unlike a secured loan, an unsecured loan does not require collateral. The rates are usually higher on this type of loan but one of its benefits is that it does not have rigid qualifying criteria like a secured loan. Borrowers who do not qualify for other loans can use an unsecured loan to make their financial problems disappear.
-Car loans
The majority of Canadians need access to a car in order to get around and get to work on a daily basis. However, buying a new car even if you can afford it is not always the best idea as cars depreciate in value the second you drive them off of the lot so they are rarely worth what you paid for them.
-Bridging loans
These come from your bank and are often used when you need quick cash. They do not require a monthly payment, but you have to pay them back in full when you get your next paycheck. This loan option is useful if you don’t have collateral for a loan, but the interest rates can be high.
-Revolving lines of credit
This one is a little different. It’s basically a line of credit, but it revolves from time to time. Because the amount of money you can borrow is based on your credit score, it’s an excellent way to build up your credit rating quickly because you can keep reusing the same amount over and over again for different purposes such as buying a car or taking your family on vacation.
-Personal loans
These are similar to bad credit loans Canada in that they come out of your own personal bank account, but they also get paid back whenever you do. This is a good option for people who are doing well financially but want to build up their credit rating at the same time.
