Options That Can Be More Helpful Than Online Loans

If you live in Canada and you’ve been turned down for a loan by your bank or credit union because your credit doesn’t meet their requirements and you are now looking for an online loan, you may actually have other options that can resolve the financial challenges you're experiencing, re-establish your credit if it's been damaged, and get your finances back on track.

The first thing you need to ask yourself is “Why?” Why do you need to apply for a loan online? What’s driving you to get one? Click on your reason below, and see if there are better options for you:

  1. This is for an emergency. Your car broke down, you have a big dentist bill, your dog is sick, you need to travel to visit a sick relative, or something else along these lines.
  2. You are trying to rebuild your credit or improve your credit score.
  3. You would like to have just one loan with one payment. You’re trying to get a more affordable payment by paying off your debt over a longer period of time, or your existing interest rates are too high.

1. Money is Needed for an Emergency Situation

If you truly have an emergency and need some money right now because you haven’t been able to save up any money for emergencies, then you may need to continue your search and find an online lender who can loan you the money. If banks and credit unions won't help you, unsecured personal loans from other loan companies can have an interest rate of around 47%. If your credit isn’t very bad, you may be able to get a loan that is cheaper than this. Learn more and see how to protect yourself from getting ripped off.

2. Trying to Rebuild or Improve Your Credit Rating or Score

Someone may have told you to apply for a personal loan to improve your credit score. While a loan may help in the long term, at this point it’s not about saving your credit anymore. Right now it’s about rebuilding your credit. To do this, your best first step would be to contact a non-profit Credit Counsellor in your area.

A Credit Counsellor will sit down with you (either in person or over the phone – it’s your choice), go over your complete financial picture, answer some of your credit related questions, and help you put together an action plan to re-establish your credit. You'll know which steps to take so that you can reach your financial goals. Meeting with a non-profit Credit Counsellor is usually free and always completely confidential.

You can also take steps to improve your credit by following the suggestions in our How to Fix Your Credit Guide.

3. Looking for a Monthly Payment That's Affordable

Before we go further, there are some more questions you need to honestly ask yourself. Is an online loan truly the best thing for your situation? Is it really what you need, and will it actually help? Are you dealing with your situation, or are you just extending the pain? Is it possible that a loan will only be a short term solution to a longer term problem that’s been brewing? Have you considered the possibility that an installment loan or cash advance could increase your cost of living, put you further behind the eight ball with high interest payments you can barely afford, and hurt you?

Don’t rush into anything that may end up hurting you and possibly causing more harm than good. Know your options. Get advice from someone who is knowledgeable about how to overcome challenging situations – someone who doesn’t have an interest in selling you a loan.

What you need to do is address the underlying problem that’s causing financial issues. Find the cure. Don’t just prolong the pain.

Your first step should be to see a local non-profit Credit Counsellor. They will review your entire financial situation with you, help you create a budget, and help you figure out what your best options are to get your finances back on track. When it comes to working through situations like this, one size doesn’t fit all. Everyone’s situation is unique. That’s why it’s so valuable to sit down with an expert and go over your situation to see what all your options are.

An Alternative to Personal Online Loans That Few Know About

While there are many ways to help people with bad credit address and resolve their situation, a great alternative to quick, bad credit online loans that many Canadians don’t know about is a Debt Management Program.

If you choose to go onto a Debt Management Program, a credit counselling agency contacts your creditors and arranges for all your unsecured debts to be put on the repayment plan (it’s not a personal consolidation loan, but it effectively accomplishes the same thing). All your payments are then consolidated into one affordable monthly payment, and interest rates are either eliminated or drastically reduced. If you also have secured debts, the Credit Counsellor will build payments for those debts into the program so that you can afford to make them every month.

The average program lasts 2.5 years (the maximum length is 5 years), and the credit counselling agency can work with you to rebuild your credit once you've finished the program. Some credit counselling organizations even have a credit rebuilding program available in the back end of the repayment program that you can choose to take advantage of if you wish to.

What You Can Look at Doing If You're Having a Struggle with Your Debts in Canada

If you’re looking to apply for an online loan because you're really struggling with your debt and need some help, don’t extend the pain with a personal loan. Contact an accredited Canadian non-profit credit counselling organization today and get some help to get your finances back on track. A really nice thing is that non-profit Credit Counsellors usually help people for free, and their help is completely confidential and non-judgmental. You have nothing to lose by talking to one. They are simply there to help.