Having a low credit rating can make things difficult. It can make it seem like no financial institutions in Ontario will lend you a dime. Fortunately, this isn’t true; we’re going to show you how to get a loan with bad credit in Ontario.
Don’t just assume that your credit score has to stay where it is
Many people with low credit scores assume that they can do nothing about it; thus they don’t act and their rating remains low. However, when thinking about how to get a loan with bad credit in Ontario, the first thing that you must consider is how to improve your score. Start by getting a detailed copy of your credit history and figure out what you can fix.
Back your loan with an asset
Lenders are much more likely to give you a loan if you have something to put up as collateral. As such, going with a secure loan (a loan backed by an asset that you own) will significantly increase your chances of getting an approval. Here are a couple of examples of types of secured loans that you should consider applying for:
Second mortgages
A second mortgage is a loan that is backed by your home. If you are a homeowner, this is a great loan solution, since they are very likely to get approved.
Car title loans
As the name suggests, a car title loan is a loan that is backed by your vehicle. In other words, the lender will have peace of mind knowing that not paying puts the ownership of your vehicle at risk.
Look beyond the banks
A bank is normally the first type of organization that pops into people’s heads when thinking about applying for a loan. However, while banks are great for storing money, they are not all that great for helping you get a loan if you have bad credit. Fortunately for you, bank loans are not the only options. You can choose to go with another lending institution. In fact, there are even a few lenders out there that specifically seek to work with customers who have bad credit.
Prove to the lenders that you are serious
A lender probably isn’t going to give money to someone who seems to be frivolously asking for a large sum of money — especially if they have bad credit. In order to maximize your chances of getting approved for a loan, you need to sit down with the lender and show them that you are serious about paying them back. A statement of financial health and budget projection will help with this.
Avoid signing up for debt management services
Although they can be helpful with managing your finances, working with a debt management or credit counselling service can severely harm your chances of obtaining a loan. In fact, this is even worse than having a low credit rating, because most lenders will reject you outright if you are participating in one of those programs. This is especially true for loans that are not backed with any sort of collateral. There are many other options for financial management help, so do not feel as if you have to close any doors in order to gain a loan.
Getting a loan is possible, even if your credit is awful
For more information about how to get a loan with bad credit in Ontario, contact Fast Access Finance. We are one of Ontario’s top lending solutions, and we often work with customers who have poor credit. The Fast Access Finance team can be reached by phone at 416.367.9191 or via our website.