Overview
Bad credit loans are designed to provide quick funds to borrowers who may lack access to traditional financial products and services due to a bad credit score or lacking a credit history. Typically offered by private online lenders, bad credit loans offer several potential benefits to subprime and near-prime borrowers.
Factors Leading to Low Credit Scores
Several factors may influence how a given credit score is calculated, including the following:
- Missed or late payments on credit cards, loans, or other bills.
- Defaulting on loan repayment.
- A high credit utilization ratio i.e. using more than 30% of your available credit.
- Maxing out credit cards. Having one or more credit cards at their limit may negatively impact your credit score.
- Errors on a credit report. These may result from a variety of factors, including a system malfunction.
Credit scores in the range 300-599 are considered subprime, while scores in the 600-659 range are considered near prime. Typically, subprime and near-prime borrowers may have more limited access to financial products and services than those with higher credit scores due to perceived credit risk.
Lacking a Credit History
Lacking a credit history may be common among newcomers and young adults who’ve just begun building their credit history in a given country. Due to the absence of a credit history, these individuals may also face higher barriers to accessing traditional financial products and services compared to those with an established credit history and a higher credit score.
Pros of Bad Credit Loans
No credit score loans offer several potential benefits to borrowers whose credit scores fall in the subprime and near-prime range:
- Easy online application process. Given the rapid advance of new technology, it’s never been easier to apply for a bad credit loan online. All it takes is a few minutes of your time and a few clicks of the mouse. You will receive an immediate response!
- Flexible criteria. Most online lenders, including those we work with, use flexible eligibility requirements. If you are at least 18 years of age, a Canadian citizen or permanent resident, have a stable source of income, a permanent address, and a valid Canadian bank account, you likely satisfy many of the criteria already.
- Fast access to funds. Once your loan application is approved, funds may be deposited into your bank account in as little as 24 hours!
- No credit check. One of the biggest advantages of a bad credit loan is that we don’t check your credit score or credit report during our simple and quick online application process. A low credit score or a lack of a credit history is not an obstacle to applying.
- Secure encryption technology. Our cutting-edge encryption technology helps safeguard any personal data you provide on your loan application.
Cons of Bad Credit Loans
At the same time, it’s important to keep in mind potential drawbacks:
- Missing payments or not paying by the due date can result in fees and extra charges. If you need to delay a payment, consider reaching out to your lender. They may be open to adjusting your payment due dates. Maintain an open line of communication with your lender.
- Potentially higher interest rates and fees are associated with bad credit loans. You must consider the cost of the loan and your ability to repay prior to applying.
How to Apply
The application process has never been more straightforward. Just fill out a quick online application via Crediteck. We don’t do credit checks as part of our application process!
The Bottom Line
Bad credit loans can be an option for those who lack a good credit score or a credit history. If you wish to improve your credit score, sign up for Credit Verify! You will be able to monitor your credit score and automatically catch errors on your credit report. The registration process is quick and easy.
