Bad Credit Loans: Credit score 620 or less
Do you have bad credit and want to apply for a personal loan? The good news is that Canadian lenders are available, even if your credit score is not the strongest. It’s important to note that bad credit loans typically come with higher interest rates, due to the higher risk that the lender is taking.
With FatCatLoans you can get a free quote with no obligation for a bad credit loan. Our specialist Canadian lenders can provide an instant approval decision, and you can choose loan options with or without a guarantor.
This is a type of borrowing option that is designed for someone who has a low personal credit score or a bad repayment history. The interest rates on these types of loans are usually higher than those offered by mainstream Canadian credit options.These loans are usually unsecured. An unsecured loan is based on your credit score and not secured against your car or home in Canada. Therefore, pricing will reflect the risk that the lender takes.
If you have a poor credit score, it’s ideal to apply for loans that are geared towards you. This can help you avoid getting rejected, and give you the best chances for approval. We recommend getting a quote that’s specific to your credit history before submitting a loan application.
Credit scores in Canada range from 300 to 900, with anything below 620 generally considered “poor”. You can check your credit report for free using services like TransUnion, Credit Karma, or Equifax. It’s important to be aware of your credit score before applying for any type of loan, as lenders will typically conduct a hard inquiry, and this could have an impact on your score.
Although many options are available for those with poor credit, they almost always have a higher APR than other options. Lenders consider this a more significant risk. There are still several options for those who have a bad repayment history, like guarantor loans.
A guarantor loan is another popular type of option for those with a bad repayment history. You will name someone, in Canada, to act as your guarantor and use their good track record score instead of your bad score. They will be responsible for any missed payments during the repayment term. The guarantor must be a Canadian homeowner to qualify. These funds are still secured and will not affect the guarantor's property. There are also non-homeowner or tenant guarantor loans where the guarantor does not have to be a homeowner to qualify.
Short-term loans are available if you need funds with a short repayment period. However, these typically have high interest rates. You should ensure that these funds are borrowed only as needed, and ideally for short periods of time.
A bad track record may make it more difficult to qualify for a normal loan, however, we have expert lenders on our panel who specialise in providing other options specifically for those who struggle to borrow money elsewhere. It’s still possible to get a loan with bad credit.
Check if you qualify by submitting your application on our website. Your submission will allow you to compare multiple options for free.
You might consider improving your bad credit score over a period if you don't have an urgent need for money. You will be able to access better financial products such as low-interest credit cards, personal loans at favourable rates, and mortgages in the future. A credit card is one way to improve your score. If you can pay the card every month, you will gradually improve and can begin to explore applying for different forms of borrowing.
Interest rates can vary significantly depending on the lender and your overall financial situation. Specialist Canadian lenders may charge up to 60% interest rates, which is the maximum allowed by law. On the other hand, short-term borrowing options can have APRs as high as 600%.
Yes, you can still borrow money if your score is less than 600. Your options, however, will most likely be limited to high-cost Canadian lenders. Rather than relying on a high-cost loan, it may be worthwhile improving your score to find a borrowing option with more affordable rates and terms.
Some lenders offer loans with no credit check for those with bad credit, or who want to avoid a hard inquiry. By using our site, you can compare these types of bad credit loans with no obligation to see if you qualify. Getting a quote will not affect or check your credit score.