Unsecured Personal Loans for
People with Bad Credit in Canada

If you have a bad credit and you need an unsecured loan, contrary to what you may think, the fact is, there are many attractive unsecured personal loans for people with bad credit in Canada. Just search Google for unsecured personal loans for people with bad credit in Canada and you will see so may companies offering bad credit loans. It is not difficult to qualify for these loans as you don’t need a security to apply for them.  They are completely unsecured so they don’t require a collateral in order to apply for the loan.

You can apply for an unsecured loan anytime and you can spend the money on anything you like. For example, in addition to being able to buy things with your loan, you may need it consolidate debts or pay for repair or cover a tax bill.  You can apply for this loan even if you have a bad credit history.

The main advantage of an unsecured loan is that, if for some reason you are unable to repay your loan due to some unforeseen circumstances, or you delay to make payments the creditors can’t take your property away from you or claim any part of it.

If you are thinking taking any of the unsecured personal loans for people with bad credit available on the market, what you need to bear in mind is that these loans have higher interest rates.  Obviously, the larger the amount of loan you take, the more interest you will pay at the higher rate.  Therefore, if your circumstances allow, taking a smaller amount of a bad credit unsecured loan will be a wise decision.

There are two main types of unsecured loans for people with bad credit. The first is an open-end loan and the other is a closed-end loan. Most personal unsecured loans are closed-end loans. Loan for people with bad credit or a close-end loan must be paid with all interest at the end of the term. Open-end loans are a kind of revolving credit loan where the borrower can withdraw money from the account up to a certain limit and payback any amounts of money as they want.  As they pay down the amount they can withdraw more money from the account, so long as the top limit allowed has not been reached.  If the top limit has been reached, the borrower will need to pay down the loan before they can withdraw any more money from the account.

This means that there is no specific time to pay off the loan in full.  Most lines of credit loans are open end loans. This kind of lending is provided by a lending institution like a bank, but private lenders can also provide a line of credit. The lender institution will set the terms on the basis of the credit history of the borrower.

A mentioned previously, there is no restriction on how to spend the money.   You can use it for a variety of purposes. You can take unsecured personal loans to buy something or pay off any emergency debt. Unsecured personal loans will help you to deal with temporary financial crisis.

Unsecured Installment loans

Most unsecured personal loans for people with bad credit in Canada are installment loans.  Installment loans are loans with the repayment period spread over many years and you are not required to pay back the loan in one lump sum, unless you want to.  Contrast this with payday loans where you are required to payback all of the loan when you get your next paycheck.

Unsecured personal loans may require cosigner

When you are considering an unsecured personal loan with a bad credit, you may need the help of a cosigner. A cosigner will promise to repay the loan if you fail to repay it. The person who will be your cosigner must have adequate income and good credit records to pay off the money you borrow.

You should be aware that your cosigner is going to take a risk. S/he is responsible to repay the loan if anything happens and you’re unable to repay the loan. Furthermore, if you become unemployed or injured lenders will ask your cosigner for the rest of the loan balance. If they are unable to pay that amount of loan then their credit will suffer and they may find it difficult to get credit in future. Therefore, when taking an unsecured personal loan with bad credit be aware of the responsibilities of your cosigner.

Improve your credit status with unsecured personal loans 

If you have bad credit, try to make sure that any loans that you are taking will help you to improve your credit status. At present, you may have bad credit, but you should take steps to change your status.  Try to make regular payments for the new loan and on time.  That way your credit will improve.

Unsecured personal loans for people with bad credit in Canada may not be the desired option for everyone. However, it obviously can play an important role in overcoming the short-term financial crisis.

Because the loan is unsecured, lenders will not be able to repossess your home or property, but they can sue you for the remaining balance of the loan. They may also report the loan status to a credit reference agency which will make your credit rating worse.

While there are unsecured personal loans for people with bad credit in Canada available, make sure you can pay back the loan before you apply for it. Otherwise, you may end up damaging your credit further.

Lenders of Unsecured Personal Loans For People With Bad Credit in Canada

As mentioned in the opening paragraph, there are many lenders of bad credit loans in Canada and many of them provide unsecured personal loans for people with bad credit in Canada.  Loan Away Inc is one such company.  They only have minimum requirements for applying for a loan.  The main thing is that you must be able to show that you can pay back the loan.