Loans for People with Poor Credit in Canada
If you're looking for loans for people with poor credit in Canada because your bank or credit union has declined your application for a loan, you may have some other options that can put an end to your debt problems, rebuild your credit rating, and put your finances back on the right track.
The first question you need to ask yourself right now is "Why?" Why do you really need to get this loan? What's pushing you in this direction? Take a minute to click on your answer below and find out if some better choices may be available to you.
- You have an emergency situation. Your vehicle has stopped working or is close to it, you have a huge dentist bill, your cat or dog isn't well, you have a sick relative you need to travel to see, or some other emergency along these lines.
- You'd like to restore or enhance your credit.
- You need one monthly payment that you can actually afford, and you're looking to do this with one loan that lowers your monthly payments and reduces the high interest rates you are currently paying.
1. Money is Needed for an Emergency Situation
If you have a real emergency and you haven't saved up any money to deal with emergencies, then you may need to continue with your search and see if you are able to find a loan company that is willing to lend you the money. Interest rates for personal loans for people with bad credit are often around 47%. You may be able to do better than this, though, if your credit isn't too bad. Learn more and find out how to not get ripped off.
2. Trying to Re-Establish or Improve Your Credit
You might be looking to apply for a loan because someone told you that's how you can improve your credit score. While this advice may help you over the course of many years, if you have bad credit, it's no longer about saving your credit. It's now about rebuilding your credit. To make this happen as quickly and effectively as possible, your best bet is to speak with a non-profit Credit Counsellor near you.
You can meet with a Credit Counsellor in person or over the phone. They can go over your whole financial picture with you, answer a number of your credit related questions, and carefully help you craft a plan to restore your credit rating. You'll learn which particular steps you should take to help you reach your short-term and long-term financial goals. Appointments with non-profit Credit Counsellors are typically free and are always strictly confidential.
You can actually get a jump start on increasing your credit score by implementing the recommendations in our How to Restore Your Credit Guide.
3. Want a Monthly Payment You Can Afford
Before we continue, there are some important questions you need to ask yourself. In all honesty, is a loan really the most ideal solution to your financial situation? Is it truly what you need? Are you sure it will actually help? Is this part of your plan to truly deal with the situation, or are our merely prolonging the pain? Do you think it's possible that a loan will only serve as a short term fix for a longer-term problem that has been developing? Have you thought about the possibility that your cost of living could be increased by a bad credit loan, that it may push you further behind with extreme interest payments you may hardly be able to afford? Have you considered that it could hurt you?
Don't be too quick to enter into anything that may ultimately harm you and potentially cause more harm than good. It's important to know all your options. The best thing you can do is get advice from someone who really knows how to effectively deal with bad credit. Ideally, someone who isn't interest in making money off you with a loan.
It's really important that you deal with the underlying issue that's resulting in financial problems. Find the cure. Don't just extend your suffering.
The first step you take should be to sit down with a local, not for profit Credit Counsellor. They'll carefully examine your complete financial situation for you, help you make a spending plan (budget), and help you make sense of all your options so you can create a plan to get your finances back on track as quickly as possible. When dealing with circumstances like this, you can never say, "one size fits all." Every person's situation has it's own distinct aspects. That's one reason why it's so valuable to meet with a real expert to look over your situation to find out what possibilities may be available to you.
A Little Known Alternative to Getting Loans for People with Poor Credit
Although there are a lot of different ways to help people with poor credit who are looking for loans resolve the challenges they're experiencing, one really good option that a lot of Canadians aren't aware of is a Debt Management Program.
If you decide you would like to put your debt onto a Debt Management Program, the credit counselling organization you're working with will communicate with your creditors and make arrangements for your unsecured debts to be placed on the repayment plan (while it's not actually a personal consolidation loan, it essentially achieves the same sort of thing). All of your payments on these debts are brought together into a single affordable monthly payment, and the interest you were paying is either removed or dramatically cut back. If you also have any secured debt, your Credit Counsellor will incorporate any payments for that debt into your program so that you'll be able to afford your payments every month.
An average repayment program lasts for about 2.5 years (the longest it can run is 5 years), and the agency you work with can help you rebuild your credit once you're done their program. Some of these credit counselling organizations have developed a credit rebuilding program which they can make available to you near the end of your program if you'd like to take advantage of it.
What You Can Look at Doing If You're Having a Struggle with Your Debts in Canada
If you’re looking for loans for people with poor credit and are having a tough time with your finances, and really need some help, don’t prolong the suffering with another bad credit loan. Talk with a qualified, Canadian, not for profit credit counselling organization right away and get some help to put your finances back on the right track. Another really nice thing is that non-profit credit counsellors often work with people for free, and their assistance is totally private and non-judgmental. You really don't have anything to lose by speaking to someone like this. Their job is to simply help you. Call one today.