How Do Bad Credit Loans and Traditional Loans Compare?
There are a number of key differences between traditional lenders such as banks, and bad credit lenders which work to the advantage of the borrower who needs cash fast.
- To start with, traditional lenders want to closely examine your credit history and tend to operate on strict guidelines in terms of minimum credit scores, but bad credit lenders usually focus more on your ability to repay the loan on time.
- With traditional lenders, the application process can take time, and you may not get the money when you really need it. But with bad credit lenders, the application is online, with instant approval, and the funds are usually deposited in your account within 24 hours.
- With bad credit loans, you are free to do whatever you want with the money as long as you repay it. Traditional lending institutions always want you to state the exact purpose of the borrowing, and they check to make sure that is what you use the loan for.
Can I Get a Loan Online for Bad Credit in Ontario?
Nowadays everything can be done online, including loan applications, though it can still take time to search the internet to find the best deal you can get from an online lender. This can be even more time-consuming when you have a poor credit score.
The best way to find an online loan for bad credit in Ontario is to apply through an online broker such as WeLoans. Just fill out one simple form to get connected to a variety of lenders with loan offers that will suit your situation.
Do I Qualify for Bad Credit Loans in Ontario?
Most lenders have their own criteria, such as a minimum credit score of 600, and by going through an online broker you can get multiple offers that will explain what you need for approval.
Here are some points that apply to most lenders in Ontario:
- You must be at least 19 years old, be a resident of Ontario, and be a Canadian citizen.
- You must have a valid home address, email address, and mobile phone number.
- You must have a minimum monthly net income of at least $800 and have had this from the same source for at least 3 months.
- You must have a bank account with access to online banking.
If you meet these simple criteria you will have no problem being approved for an Ontario bad credit loan, even if you have been turned down for a loan from a traditional lender, such as a bank.
How Much Does a Bad Credit Loan in Ontario Cost?
The main cost of a bad credit loan is the interest rate, which is generally slightly higher than for a good credit score but should still be affordable. Depending on your financial situation, the term of the loan, and how much you borrow, the rate can vary from five percent to 40 percent.
There is also the possibility of other fees to pay in addition to the interest charges, such as:
- Application fee
- Origination fee
- Late payment penalty
- Early repayment fee
- Loan servicing fee
- Loan underwriting fee
Not all lenders charge all of these fees, so be sure to read the loan agreement carefully so you are clear about the total cost of the loan.
When Would I Need a Loan for Bad Credit in Ontario?
A bad credit loan is ideal for situations where you can't get a loan from a traditional lender because you have a poor credit history.
But sometimes the unexpected happens, like a medical emergency or a vehicle accident, or household repairs, and you need quick cash.
This is where a bad credit lender can help you out of a sticky situation, with simple criteria for eligibility, fast loan approval, and quick cash into your bank account.
Is It Possible to Get Loans for Bad Credit With No Credit Check in Ontario?
It is easy to get a loan with no credit check in Ontario. This is useful if you have poor credit and could fail a credit check, or if you don't want a credit check recorded on your credit report.
The most important point that bad credit lenders look for is your ability to repay the loan according to the terms in the agreement, and since no checks are required, these loans tend to be processed quickly.
Does an Ontario Bad Credit Loan Affect My Credit Score?
Normally taking out any loan will affect your credit score, but the good news is that provided you repay the loan on time, an Ontario bad credit loan will actually improve your credit score. Making regular repayments helps build your score, and only failing to pay back the loan as agreed will negatively impact your credit score.
Even then you may be able to negotiate an extended repayment term if you are having trouble making payments – be sure to always let the lender know in advance if you are going to have a problem.