Unsecured loans for borrowers with bad credit scores can be tough to find in Canada. This is due to the fact that people with bad credit ratings tend to be a hot sight for any lenders, banks or financial firms because they have a very high risk of not paying their debts on time. Another fact is that an unsecured bad credit loan means that the payment time/method is based solely upon the ability of the borrower to pay the loan. This is very risky for the lender and thus, as a result, to reduce the lender’s risk of not getting paid the borrower will have to suffer from high interest rates and big monthly payments / down payments. It can also be a frustrating quest to look for an unsecured bad credit lender in Canada. And if you were unable to manage your payments efficiently, it would only turn out that you’ll have to loan in order pay for another loan.
It is typically easier to look for a secured loan than an unsecured credit loan. Why? Because lenders will lend, because it’s their business, they invest in it. In business and investment, one thing is always looked for and that is financial security. With a secured loan, everything will turn out great for the lender, even if the borrower fails to pay his or her debt. An unsecured loan on the other hand can be very risky for the lender, because there is a risk where the debt may not be paid on time. Therefore, unsecured loans are commonly offered by private lenders and possess a very high interest rate compared to a secured loan. A detailed comparison of secured and unsecured loans:
- Higher interest rate
- Tough to find a lender
- Can be used as a credit score builder – use this loan to pay for your existing debts
- Loan amount varies depending upon several circumstances like monthly income, credit score, assets, debts, etc.
- Easy to find
- Lower interest rate
- Does not accept bad credit scores oftentimes
- Loan amount depends upon the collateral
- Somewhat possesses stricter rules compared to unsecured loans
Unsecured loans often are not being offered by banks. You’ll have to look for a private lender in order to acquire unsecured loans. By acquiring one, you can use it to build up your credit score again, by paying your unpaid debts. But it’s really hard to find one in Canada. Well, the internet is one of the most powerful research tools you can use to look for some organizations or individuals who offers unsecured loans. Just always remember that there are many scammers scattered online, you must always check for the website’s reputation before trying to do any risky business. You can also try to look for some private lenders in your local area, undoubtedly there will be one or two who can offer you an unsecured loan.
The ultimate way to achieve a bad credit loan at favorable interest rates are to borrow from people like your friend, neighbor or a relative! In that case, you will not be bound by the very strict rules, you can even skip a payment for a month if you really don’t have money in your pocket and the best thing is that your credit score will not be affected even though you were unable to pay them. However, not being able to settle your debt from an unsecured loan from a relative or friend or neighbor can result in shattered relationships. It could also end up in rivalry which will only put another heavy burden on you.
Remember that acquiring money can be very hard, so keep yourself sane by controlling the flow of income and outcome that goes into your wallet.