Personal loans are incredibly helpful when you need a fair amount of money quickly. There are many expenses that can arise suddenly. Car repair, home improvement, funding a wedding, buying a nice gift, and plenty of similar situation can require fast money.
If you have a good credit and meet the typical eligibility criteria, you have plenty of options to choose from. On the other hand, the options are minimized, and the processes can be a bit more complicated for those with a low financial score.
Banks are reliable sources for applying, however, they are quite strict in their policies and have much formal approval procedures even for applicants falling under normal situations. They are hardly going to consider a bad credit holder.
The next best option is a direct lender. These are lenders that don’t use intermediaries and typically work online. They have specially designed offers for people with poor credit. Such offers are openly advertised so they are not difficult to find. Of course, one must ensure that the lender is reliable and reputable before doing business with them.
Understanding Bad Credit
A financial score is the grading of your credit report. It is what lenders use to determine the credibility and ability of a person to pay back the money. Bad credit means that there are entries of debts, collection, bankruptcies, late payments, and similar credit indiscretions in your report.
A score of 700 and more is considered excellent. One that is 680 and more is called good. 640 and more is considered to be a fair score. Below 640 and you either have borderline credit or bad credit.
Your first step is to find online direct lenders that offer funds to people with a poor financial history. We are using the plural form because you can’t simply search one. It is important to shortlist a few and then compare to find the most suitable one.
Here are a few factors to compare the lender on:
- Learn about the history of the company such as the length of time they have been working in the industry
- Number of successful approvals to date
- Reviews or testimonials left by previous borrowers
- Certification by a credible financial authority of Canada
- Reporting to the 3 major credit bureaus of Canada, which are Equifax, Experian, and TransUnion
- Borrowing options available for bad credit
- Flexibility of payment schedules
- Calculation of interest rate and related policies
- Time taken to approve an application
All these details can be found on the website of the lender. Most reputable online lenders have well-established websites so they can offer transparent information to potential applicants. After comparing, you are well-equipped to finalize the lender you will apply with.
The entire process of the application and approval is online. This is incredibly convenient and quick as you don’t have to leave beyond using your laptop or tablet.
Even if you get approved, don’t forget that improving your credit score is important. Try resolving your debt along with immediate expenses using the borrowed money. Additionally, when you are still paying back, try controlling the way you spend and develop a habit for saving money.
Read More: Which Loan Company Is The Best For Bad Credit?