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Overcoming Financial Setbacks With A Bad Credit Loan

Missed payments, collections debt, or consecutive late payments can seriously hurt your credit. A bad credit score may prevent you from accessing credit through personal loans or new credit cards.

People with low credit and no emergency savings can find themselves in a tough spot when faced with sudden bills or expenses. Short-term loans for bad credit could be the answer.

What Is A Bad Credit Loan?

A bad credit loan is short-term and helpful for people with poor credit or no credit at all. In Canada, you can borrow up to $1,500 as long as you repay it on your next payday. Applicants can apply online and in-store and receive the funds that same day.

Instead of repaying the loan in installments, you simply give the lender a blank, voided cheque or pre-authorized debit form. The lender withdraws the principal you have borrowed plus a service fee directly from your account on your next payday.

Bad credit loans are available to anyone over 18 with a verifiable income. Unlike banks and traditional lenders, bad credit lenders will not conduct a credit check. Not only are you spared the worry of meeting credit score requirements, but you also do not have to worry about a hard credit check lowering your credit score.

How Can Bad Credit Loans Help During Financial Setbacks?

No credit or bad credit history makes getting approved for loans and credit cards harder, which is not ideal when you urgently need funds. However, with bad credit loans, getting the funds you need when you need them is much easier.

Bad credit loans have a fixed fee that may vary based on your province. The fee is clearly stated in your loan agreement, but you can also contact the lender if you need help understanding the costs associated with the loan.

Here are a few situations when a bad credit loan may come in handy:

  • Your car requires urgent repairs
  • You need funds for critical home repairs
  • Your pet requires medical care or surgery
  • You have to deal with a bill you did not anticipate (such as an annual insurance premium you had forgotten about)
  • You need to travel urgently (for work or a family emergency)
  • Your cellphone is damaged and must be replaced

In these circumstances, a short-term bad credit loan may help you manage a tricky financial problem.

The Bottom Line

Bad credit loans can be a lifesaver when you urgently need funds but have a low credit score. These short-term loans let you borrow what you need, and on your next payday, you return the amount plus a flat fee.

You do not need a particular credit score to qualify for bad credit loans, making them accessible to many Canadians.

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