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If you’re having trouble qualifying for a personal loan from a bank or credit union, there are alternative lenders in BC offering bad credit loans. When reviewing your application, they’ll shift the focus from your credit score to your income. Just watch out for steep interest rates with these loans.
Here’s a look at bad credit loans in BC, how they work and where to apply.
Compare bad credit loans in BC
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Features of bad credit personal loans in BC
Secured vs unsecured. Many bad credit loans don’t require collateral. However, lenders may be more willing to approve you if you back it with collateral, such as your house or car. Just be careful: Defaulting on a secured loan means losing your asset.
Loan amounts ranging from $500 to $10,000. How much you’ll get approved for will depend on your personal financial situation.
Short to lengthy loan terms. Loan terms typically range from 6 to 60 months with bad credit personal loans, but they can be shorter or longer depending on the lender.
Expensive. The interest rates of bad credit personal loans could reach as high as 47%.
Do I qualify for a bad credit loan in BC?
While requirements will vary from lender to lender, you will usually need to meet the following to apply for a bad credit loan in BC:
Be at least 19 years old
Be a Canadian resident or citizen
Have proof of regular employment income to keep up with monthly payments
Have a valid bank account
Keep in mind, unsecured loans typically have minimum credit score requirements while secured loans have collateral requirements, such as proof of home equity or a car title.
Before applying for a bad credit personal loan in BC
Check your credit score. Before you get started with a bad credit loan application in BC, check your credit score so you have an idea on how you’ll appear to lenders. If you can wait at least six months, take steps to rebuild your credit first.
Compare your options. Compare your options using factors like loan amounts, terms, restrictions on the use of loan funds, interest rates and fees. You can get personal pre-approval from a few different lenders to find the best offer available to you.
Consider finding a cosigner or opting for a secured loan. Having a relative willing to cosign a loan can increase your chances of approval if you have bad credit. But they’ll be on the hook for repayments should you find yourself unable to pay. If you prefer to go at it solo, you can also increase your chances of getting approved by securing a loan with an asset.
Watch out for predatory lenders. People in desperate financial situations are often targeted with personal loan scams. To verify a lender is legit, look for its head office, customer service phone number and email, and check consumer review sites like the Better Business Bureau and Trustpilot.
Payday loans are convenient, but they should be used as a last resort because they’re one of the most expensive ways to borrow money. Here are their features:
Borrow up to $1,500 or 50% of your income. Some lenders also put a cap on how much you can borrow on your first loan.
Short repayment term. As the name suggests, you’ll repay the loan on your next payday.
Quick. Speed is on your side with payday loans compared to other lending options. You can get a payday loan in one hour or even less if there are no issues with your application.
Extremely expensive. In BC, payday lenders charge $15 for every $100 borrowed, making this type of financing far more expensive than credit cards and other loans.
Do I qualify for bad credit payday loans in BC?
To qualify for a payday loan in BC, you’ll typically need the following:
Be at least 19 years old
Be a Canadian citizen or resident
Have proof of a steady source of income
Have an active bank account to set up withdrawals
Before applying for bad credit payday loans in BC
Confirm that the lender is legitimate. The lending space is rife with fraudulent lenders, so you’ll need to double check that the lenders on your shortlist are licensed in BC, and are sticking to the province’s payday lending regulations.
Understand your rights as a borrower. Make sure you’ve read all the rules and regulations around payday loans in BC.
Check you’ll have enough income to repay the loan. You’ll be charged NSF and late fees if you don’t pay on the due date. Also check that you’ll have enough income left to pay for other debts and expenses once you repay your loan.
Open credit account. A line of credit works similarly to a credit card. Once you’re approved, you can borrow as much or as little as you want up to your limit, and then only pay back what you borrow plus interest.
Amounts up to $10,000. The cap on your bad credit line of credit will be determined by lenders in BC based on your unique financial profile.
Expensive. The interest rates of bad credit lines of credit in BC can reach as high as 47.42%.
Do I qualify for a bad credit line of credit in BC?
Like other bad credit loan options in BC, you’ll need to meet the following basic requirements to qualify for a line of credit:
Be at least 19 years old
Be a Canadian resident or citizen
Have proof of regular income
Have an active bank account
Before applying for a bad credit line of credit in BC
Compare line of credit options. Many financial institutions offer lines of credit. However, if you have bad credit, you’ll likely need to turn to alternative online lenders, since banks and credit unions typically require a good or excellent credit score to be eligible to there lines of credit.
Consider applying through a broker. It can be difficult to find a lender willing to offer bad credit lines of credit, but it’s still important to compare you options to make sure you’re getting a good rate. To help save you time, you can try applying with a lending broker – like Loans Canada or LoanConnect – where you can fill out one application to get matched with a number of lenders that you qualify with.
A credit score below 560 is generally considered bad credit in BC and across Canada. That said, some lenders will consider any score below 600 to be bad. At that threshold it gets more difficult to qualify for traditional loans at the best rates. However, it’s even possible for borrowers with no credit history to qualify for bad credit personal loans or a payday loans with specific lenders.
Lenders use credit scores to asses the potential risk of lending someone money. A high score indicates to lenders that you have a long history of successfully managing debt. A low score signals to lenders that you’ve had troubling handling debt in the past, which means there’s a higher risk that you may default on a new loan. Lenders willing to approve bad credit loans in BC will charge higher interest rates to compensate for that risk.
Can I get no credit check loans in BC?
Yes, it is possible to get no credit check loans in BC, but your options will likely be limited to a selection of payday loans. Although some payday lenders in BC may not do credit checks, keep in mind that payday loans are very expensive. Only opt for a no credit check payday loan if you’ve exhausted all other options.
What can I use a bad credit loan in BC for?
You can use a bad credit loan in BC for virtually any of your financial needs, as long as the funds are used for a legitimate purpose. There typically aren’t any restrictions on how borrowers can use their funding from a bad credit loan. The most common reasons include:
Paying off bills and other debts
Consolidating multiple debts
Home repairs or other financial emergencies
Making major purchases
Paying for living expenses until your next payday
Signs of a legitimate lender of bad credit loans in BC
When you’re looking for credibility before proceeding with a lender, there are some telltale green flags you’ll want to find. They include:
The lender is registered as a business in BC. Contact Consumer Protection BC at 1-888-564-9963 to check if a lender is licensed in the province. If it’s a payday lender, it should also display its licence number online and at all physical locations.
The lender has a physical address for a head office, a phone number and an email address for customer service. If a lender is missing these key details, this may be a red flag.
The lender doesn’t advertise “guaranteed approval”. Avoid lenders promising you’ll get approved, especially for bad credit loans. Legitimate lenders must evaluate a borrower’s financial situation before approving.
The lender is well-reviewed, with an active social media presence. Online clout helps to prove a lender’s legitimacy. Does the lender have a lengthy history of reviews from customers? Is it accredited with the Better Business Bureau? Is it active on Facebook, Twitter, Instagram or LinkedIn?
The lender is transparent about rates. Only apply to lenders that are upfront about their interest rate and fees. Payday loan lenders must display posters showing the rates they charge.
How to apply for bad credit loans in BC
If you’re ready to apply for a bad credit loan in BC, simply follow these steps:
Fill out an application. Provide your personal details, including your name, address, email, phone number, employment and housing situation.
Wait for a decision. Expect to get a decision within minutes after you submit your application.
Get verified. You may be asked to submit documents to verify your income and identity.
Receive your contract. Once the lender has officially approved your application, review your contract and sign.
Get your money. E-transfer and direct deposit are the most common funding methods for bad credit loans in BC.
Frequently asked questions about bad credit loans in BC
Bad credit personal loans can range from as little as $500 up to $10,000, and more if you're willing to put up home equity for a secured loan. If you're opting for a payday loan, they cap out at $1,500 in BC.
Paying off a payday loan will not improve your credit score. A bad credit personal loan can improve your credit score as long as your lender reports your on-time payments to the credit bureaus.
Yes. In BC, you can repay a payday loan early without penalty. Prepayment penalties are also not common for unsecured bad credit personal loans.
Fees that borrowers may come across include administrative fees, loan origination fees, non-sufficient funds fees, and late or missed payment fees. Double check with your lender so you're aware of all the potential fees and charges you may face while taking out a loan with it.
Bad credit personal loans in BC usually require a credit check. Some payday loans require a credit check, while others don't. Learn more about no credit check loans.
Carmen Chai is a freelance writer at Finder, specializing in financial products. She is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. She has reported on personal finance, mortgages, and banking products for nearly a decade.
Compare some of the best bad credit loans in Nova Scotia.
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