A bad credit score typically falls below 560. If you’ve recently declared bankruptcy or defaulted on several loans, your credit score may be considered poor. Unfortunately, most traditional banks will likely deny your application for a loan or credit card in such situations. But don’t lose hope; there are alternatives available!
Top 10 Bad Credit Personal Loans in Canada
We’ve compiled a list of the best lenders offering personal loans for those with bad credit in Canada. Each option varies in terms, amounts, and eligibility criteria, so you can find one that suits your needs.
1. Loan Connect Canada
Loan Connect connects you with lenders for loan amounts ranging from $500 to $50,000. The application process is quick; submit your application in just one minute, and you might receive cash within 24 hours. This option is great for those with poor credit, including those who have declared bankruptcy or have consumer proposals.
- Loan Amount: $500 – $50,000
- Approval Time: Within 24 hours
- Eligibility: Must be a permanent resident or Canadian citizen and of legal age in your province.
2. Loans Canada
Loans Canada helps you find personal loans even if you have bad credit. They connect you to a network of lenders who can provide loans from $500 to $300,000, often with lower interest rates for debt consolidation. The process is straightforward, and you may receive funds within 24 hours.
- Loan Amount: $500 – $300,000
- Interest Rates: Starting at 3%
- Repayment Period: Up to 60 months
3. Loan Away Canada
Loan Away offers unsecured personal loans up to $5,000 without penalty fees. Their application process is quick, taking only about eight minutes, and they accept over 90% of applications. Ideal for residents in Alberta, Ontario, and Newfoundland.
- Loan Amount: Up to $5,000
- Approval Rate: 90%+
- Eligibility: Must be at least 18, employed for three months, and a Canadian citizen or permanent resident.
4. Easy Financial Canada
Easy Financial provides both unsecured and secured loans, allowing you to borrow up to $15,000 without collateral, or up to $25,000 with home equity. They focus on rebuilding your credit by reporting on-time payments to credit bureaus.
- Loan Amount: Up to $15,000 (unsecured), $25,000 (secured)
- Credit Building: Reports to major credit bureaus
5. Prudent Financial Canada
Prudent Financial offers loans secured by collateral such as your car or home equity. Their high approval rate means that even if you have a consumer proposal or bankruptcy history, you might still qualify for a loan.
- Loan Amount: Up to $25,000 (car loan), $20,000 (secured personal loans)
- Approval Time: Same day
6. Canada Lend
Canada Lend is another option for those with poor credit. They focus on your property equity as collateral for secured loans, making it easier for self-employed individuals to obtain funding.
- Loan Types: First, second, and third mortgages
- Collateral: Property equity
7. Mogo
Mogo is a Canadian fintech company that offers personal loans, credit scores, and identity protection. Their installment loans can go up to $35,000, but interest rates vary widely, so it’s important to check the terms.
- Loan Amount: Up to $35,000
- Interest Rates: 9.9% – 46.96%
8. Borrowell
Borrowell is known for providing free credit scores and personal loans of up to $35,000. Their interest rates range from 19.99% to 46.96% APR, with a quick online application process that can lead to approval in as little as two days.
- Loan Amount: Up to $35,000
- Eligibility: Credit score must be above 660
9. Ferratum Personal Loans
Ferratum offers personal loans ranging from $2,000 to $10,000 with flexible repayment terms. Their application is straightforward, and funds can often be deposited within 24 hours.
- Loan Amount: $2,000 – $10,000
- Approval Time: Around 24 hours
- Eligibility: Must have a Canadian bank account and active employment with a minimum monthly income of $2,000.
10. Tribeca Finance
Tribeca Finance specializes in secured loans for bad credit consumers, including home equity loans and first and second mortgages. They cater to individuals who earn at least $20,000 annually and have cleared any bankruptcy procedures.
- Loan Types: Secured personal loans, home equity loans
- Minimum Income: $20,000/year
Pros and Cons of Bad Credit Personal Loans
Before you dive into applying for a bad credit personal loan, it’s good to weigh the pros and cons.
Pros
- Rebuild Credit: Timely payments can help improve your credit score.
- Quick Access to Cash: Many lenders provide fast approval and funding.
- Flexible Options: Various loan types and amounts available to suit different needs.
Cons
- Higher Interest Rates: Bad credit loans typically come with higher interest rates.
- Potential Fees: Some lenders may charge origination or processing fees.
- Limited Loan Amounts: You may not qualify for larger loan amounts.
Who These Loans Are For
Bad credit personal loans can be a lifesaver for those who need immediate cash for unexpected expenses, debt consolidation, or even to rebuild their credit. However, it’s crucial to ensure you can afford the repayments to avoid further damaging your credit score.
