Unsecured personal loans are a favourable option for Canadians seeking general financing. But what if you have bad credit? Unfortunately, this does pose some hurdles for the borrower. You might be turned away from banks and other traditional lenders. Thankfully, unsecured personal loans for bad credit exist and can come to your aid in times of financial need. To learn more about unsecured financing and how to obtain a loan with bad credit, continue reading below.
How Do Unsecured Personal Loans Work In Canada?
There are two main types of personal loans in Canada, secured and unsecured personal loans. Secured personal loans require collateral or security to borrow money. Security and collateral are defined as any assets of substantial value that a lender can repossess if the borrower fails to repay their loan. Whereas unsecured personal loans do not require any security or collateral. In other words, lenders only rely on your creditworthiness to repay.
When getting unsecured personal loans through WeLoans, you will need to prove you have the ability to repay the loans. This means providing consistent employment records and sufficient sources of income. Lenders may require you to prepare bank statements to assess your financial situation and decide whether you can afford the loan. However, you won’t be required to put up assets, such as your car or home, to obtain financing.
As one of the most popular types of installment loans, unsecured personal loans usually come with lower interest rates. They are mid- to long-term loans with payment terms of up to 5 years. Unsecured personal loans can be used for an array of purposes making them a flexible, versatile form of financing too.
Why Are Unsecured Personal Loans So Popular Among Bad Credit Borrowers?
Even if your credit history isn’t spotless, you still have a chance at getting approved for unsecured personal loans. For this reason, unsecured personal loans for bad credit has become popular among bad credit borrowers. In some cases, you may even be able to qualify for loans without a regular job online.
Apart from that, there are several advantages of unsecured personal loans. Such as larger loan amounts, preservation of assets, and flexible repayment terms. Also, the application process is straightforward and you can usually obtain funds within a few days, sometimes the same day.
Is It Possible To Get Bad Credit Personal Loans With Instant Decisions Through WeLoans?
It is possible to obtain all sorts of loan products for poor credit borrowers with instant decisions through the online platform of WeLoans. Here are reasons why you should consider WeLoans to get loan services:
- Reliable licensed lender network - We can give you access to hundreds of lenders. Thereby boosting the chance of receiving more loan offers compared with just one go.
- Same-day funding - We understand the urgency of your situation, and we will make sure the funds are in your account as fast as possible. We work with professional loan service partners that are able to fund you within 24 hours after you submit the loan requests.
- Bad credit - Unsecured personal loans for bad credit are available through WeLoans. Regardless of your financial circumstances, you can find a lender on our platform who’s willing to work with you.
- Affordable rates and terms - We partnered with lenders that offer reasonable interest rates and terms.
- Privacy Protection and Bank-level Encryption - We take information security seriously. In addition, we take measures to keep our website secure to protect your sensitive information and financial transactions.
What Should I Consider When Getting Online Bad Credit Personal Loans In Canada?
When getting loan services online, it’s important to be wary of scammers and fraudulent activity. Consider the following aspects to avoid encountering loan fraud and getting stuck in debt cycles.
Repayment Capacity
During the application process, be sure to check your finances and assess your repayment capacity. This can be determined using your income, expenses, and employment status. The number one rule is to not borrow more than what you can afford to pay.
Rates, Fees, and Terms
Rates, fees and terms vary across different lenders and types of loan. Make sure to compare loan offers extensively based on these three factors. Pay additional attention to hidden conditions in the agreements. The more research you do, the better your decision will be!
Legitimate Lender
It is suggested you strictly deal with licensed and registered lenders based in Canada. Getting loans from these legitimate lenders will ensure secured financial interactions. Plus, it’s easier for borrowers to resolve after-sale issues.
What Will Happen If I Failed To Repay An Unsecured Personal Loan for Bad Credit In Canada?
If you miss a payment, the lender will typically send you a letter informing you to pay the amount by a certain date, plus any applicable penalties. If the problems persist, you will most likely receive a default notice containing the details of your loan, missed payments and the next action you need to take. You may start to receive calls or other forms of communication in an attempt from the lender to collect the debt.
If you no longer have the ability to repay the loan, some lenders may pass on your debt to a collections agency. Calls and other forms of communication will persist. This may even escalate to court proceedings. A court judgment will stay on your credit report for several years. All of this could significantly impact your credit score.
Before things escalate to this level, be sure to communicate with the lender. We’re all human and most lenders are understanding if you are struggling with a payment or two. If you communicate with them, they are less likely to escalate the situation. In addition, you may be able to weather the storm instead of spiraling into a cycle of debt.
Is A Good Credit Score Needed For Getting An Unsecured Personal Loan?
Frankly speaking, a good credit score is not a necessary factor when getting unsecured personal loans. Many lenders that offer unsecured personal loans for bad credit will look past your score. Instead, they’ll consider other factors in the approval process including your income, employment history, and overall financial situation.
However, a good credit score can give you an advantage when applying for an unsecured loan. Most lenders will consider borrowers with higher credit scores less risky. This means they are likely to get better deals with higher loan amounts, longer terms as well as lower interest rates and fees.
What Credit Score Do You Need For An Unsecured Personal Loan?
There is no minimum credit score! If you want an unsecured personal loan with bad credit, it’s entirely possible to find one through WeLoans! You may need to shop around and accept a higher interest rate, but there are definitely options available to you.