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Loans after bankruptcy

Here are 6 credit options you have after your bankruptcy is discharged.

Filing for bankruptcy isn’t an easy step to take. While the process is difficult, often the hardest part usually comes when you’re trying to rebuild your finances, your credit score and your life. After your bankruptcy is discharged, you may find yourself in need of a post-bankruptcy loan. While it sounds difficult, there are some lenders who might offer you a second chance.

Can you get a loan if you declared bankruptcy?

If your bankruptcy is discharged, your options may be more limited, but you do have options. A payday loan has the most lenient eligibility requirements, but it also has exorbitant rates and extremely short repayment terms, so consider it only as a last resort and only if you’re certain you can repay it by your next payday.

Since a first bankruptcy stays on your credit report for 6 or 7 years (and a second bankruptcy for up to 14 years), be wary of the financial products that you apply for. Should you apply and be denied, you could damage your credit score further. Always contact a lender, be honest about your financial history, and ask if you will be considered before submitting an application.

What kinds of bankruptcy loans can I get?

Browse 6 types of bankruptcy loans you can get.

1. Credit builder loan

As the name suggests, a credit builder loan helps you rebuild your credit score. With this loan, you make payments to the lender and receive the loan funds after you make your payments. Some lenders, like Refresh Financial, do not do credit checks.

Credit builder loans tend to have lower maximum loan amounts at around $5,000 – $10,000, with interest rates generally ranging between 10% and 30% . Loan terms tend to be shorter, maxing out usually between 2 and 5 years.

1 - 1 of 1
Name Product Interest Rate Loan Amount Loan Term Requirements Link
Refresh Financial Credit Builder Loan
$1,250 - $10,000
3-5 years
Requirements: min. credit score 300
Go to site
More Info
No funds are provided by Refresh upfront. Instead, funds are placed into a secured account to be accessed later. Payments are reported to the credit bureaus, potentially impacting your credit score.

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In-depth guide to credit builder loans

2. Payday loan

These are small loans with repayment terms usually between 1 and 4 weeks. Borrowing amounts are between $100 and $1,500, and the cost of borrowing is $15 to $25 for every $100 borrowed, depending on your province.

⚠️ Warning: Be cautious with payday loans
Payday loans are expensive. If you're experiencing financial hardship call Credit Counselling Canada for free financial counselling (Monday-Friday 8:00am-5:00pm at +1 866-398-5999). Consider alternatives instead of a payday loan:
  • Local resources. Government programs and nonprofits offer free financial services and help with food, utilities and rent.
  • Debt relief companies. There are services to help you reduce your debt payments.
  • Payment extensions. Talk with bill providers about longer payment plans or due-date extensions.
  • Side jobs. Sell unwanted items online, sign up for food delivery and more.

Compare payday loans

1 - 4 of 4
Name Product Loan Amount Loan Term Interest Rate Turnaround Time Serviced Provinces Offer
Money Mart Payday Loan
$120 - $1,500
1 - 62 days
Varies by province
As little as 1 hour after getting approved
To be eligible, you’ll need to be at least 18 years of age with a steady source of income and a chequing account. No credit check required.
Cash Money Payday Loan
$100 - $1,500
5 - 40 days
Varies by province
As little as 15 minutes with INTERAC e-Transfer
Apply for your first $300 payday loan at a $20 cost (excludes SK applicants).
Have your banking details ready to get a loan in 2 hours. You'll need to be 18 years of age or older and have a net income of at least $1,000/month. Residents of MB and NB must apply in-store for a loan.
iCASH Payday Loan
$100 - $1,500
7 - 62 days
Varies by province
As little as 2 minutes with INTERAC e-Transfer
Get up to 20% in cash back once your payday loan is fully repaid. Conditions apply.
To be eligible, you'll need to be at least 19 years of age and have a net income of at least $800/month deposited into your bank account.
GoDay Payday Loan
$100 - $1,500
Up to 62 days
Varies by province
As little as 2 minutes with INTERAC e-Transfer
To apply, you'll need to be a Canadian resident over the age of 18 with a valid email address, phone number and an open bank account with a Canadian bank or credit union.

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Maximum borrowing costs per province
Always refer to your contract for exact repayment amounts and costs as they may vary from our results.
Province Maximum allowable cost of borrowing
Alberta, British Columbia, New Brunswick, Ontario & Prince Edward Island $15 per $100 borrowed
Manitoba & Saskatchewan $17 per $100 borrowed
Nova Scotia $19 per $100 borrowed
Newfoundland and Labrador $21 per $100 borrowed
Northwest Territories, Nunavut & the Yukon $60 per $100 borrowed
Quebec Limit of 35% annual interest rate (AIR)

3. Auto title loan

It’s easier to get approved for a secured loan than an unsecured loan, since the lender can recoup any potential losses by seizing the collateral that you back your loan with. If you put up collateral, for example your vehicle, a lender will be more likely to allow you to borrow more money, even if you have bad credit.

An auto title loan is a secured loan where you basically attach your vehicle to the loan as security. You can then get access to a loan for anywhere typically between 25% and 50% of your car’s value. Auto title loan interest rates generally range between 20% and 30%, excluding other fees. Before applying for an auto title loan, contact the lender to discuss your options and be honest about your financial past.

Apply for an auto title loan

1 - 1 of 1
Name Product Loan Interest Rate Max. Loan Amount Loan Term Requirements
Loans Canada Vehicle Title Loan
Loans Canada Vehicle Title Loan
0% to 29.99%
3 - 96 months
Requirements: min. income $1,800/month, 3+ months employed, min. credit score 300
A broker with the largest lender network in Canada. Fill out one application and get matched for free with lenders. Bad credit, CERB and EI borrowers are considered.

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4. Secured credit card

With a secured credit card, you give the lender a security deposit, which acts as collateral, and then use the card like a regular credit card up to a certain limit. The amount you deposit as collateral — usually between $200 and $10,000 — often becomes your monthly credit limit.

Like with typical credit cards, you’ll be charged interest, typically around 15% to 20%, on purchases made with a secured credit card. If you default on payments, the lender can seize the deposit. Keep in mind that secured credit cards may come with monthly and/or annual fees.

Compare secured credit cards

1 - 5 of 5
Name Product Min. Required Deposit Purchase Interest Rate Cash Advance Rate Annual Fee
Neo Secured Card
Earn bonuses like 15% cashback on your first purchase at most partners, and earn an average of 5% cashback at thousands of partners and at least 1% cashback guaranteed.
Refresh Financial Secured Card
$12.95 + $3/month
The Refresh Secured Card has no credit check, a low annual fee and guaranteed approval once you secure your card with anywhere from $200 - $10,000.
Home Trust Secured Visa (No Annual Fee)
The no annual fee Home Trust Secured card comes with a standard 19.99% purchase and cash advance rate. Apply with any credit score and start rebuilding your credit.
Home Trust Secured Visa (Low Rate & Monthly Fee)
Pay a monthly fee of $5 and get a low purchase interest rate of 14.90%.
Home Trust Secured Visa (Low Rate)
Rebuild your credit score and enjoy a low purchase interest rate of 14.90% and a cash advance rate of 19.80%.

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5. Bad credit personal loan

Bad credit personal loans are available from certain lenders, some for larger amounts, like up to $5,000. Note that the maximum loan amount and interest you’ll be charged is based on the lender’s criteria and will vary based on your province or territory of residence. Keep in mind that interest rates on unsecured personal loans could reach as high as 47%. However, not all lenders of bad credit personal loans accept borrowers who have filed for bankruptcy.

6. Personal overdraft

Your current bank may be willing to approve you for a small overdraft if you have a good history with them. An overdraft allows you to withdraw cash that you don’t have in your available balance. You won’t damage your credit score either by visiting your bank and asking if you’re eligible for this type of credit.

Before you apply for bankruptcy loans…

  • Calculate if you can afford the repayments. Since your assets and income may have been affected by bankruptcy, you’ll need to seriously consider whether you can afford the loan repayments.
  • Take the decision seriously. Applying for a loan when you’re in a difficult financial situation isn’t a decision that should be taken lightly. Consider the reason why you’re taking out the loan and determine if there are other more affordable ways of paying for what you need without taking out a payday loan.
  • Understand that you will be charged high interest rates. Lenders see borrowers who have previously defaulted on payments as higher risk, which is why they charge them higher interest rates.

    How can I be approved for a bankrupt loan?

    While there are lenders who will consider applicants who are in bankruptcy or who have previously been bankrupt, filling out the application isn’t all it takes to be approved. Here are some of the requirements you may need to meet.

    • Income. This is probably the most important factor for your application because lenders use income to determine whether you have the ability to repay a loan. Lenders typically have minimum income requirements, and you will need to provide proof of income, such as pay stubs or bank statements, to show that you meet the minimum.
    • Employment situation. The stability of your employment also plays a factor, especially if you’re self-employed or a part-time worker. Different lenders have different restrictions, so be sure to check with the lender before applying.
    • Age and location requirements. Most lenders only offer loans if you’re the age of majority in your province (18 or 19), and they may only service certain provinces and territories. You will need to provide them with government-issued ID with your name and address, such as your driver’s licence.
    • Assets. For loans after bankruptcy, the lender may require you to secure an asset to the loan as a guarantee in case you default.
    • Guarantor. If you don’t meet the lender’s criteria, you may be able to apply with a guarantor to increase your chances of being approved. A guarantor agrees to sign the loan with you and cover your payments if you default on them. Their finances would need to be in good shape in order to qualify.

        How does bankruptcy affect my credit and loan eligibility?

        Whether you’re currently in bankruptcy or have a bankruptcy listed on your credit report, you’ll need to understand the long-term effects it has on your credit score and your financing eligibility.

        • Your credit report. A first bankruptcy will remain on your credit report for 6 to 7 years, while a second bankruptcy will remain on your report for up to 14 years.
        • Your credit score before bankruptcy. If you had poor or bad credit before you declared bankruptcy, then your credit won’t take a huge hit because it’s already low (with the lowest possible score being 300). Lenders will take into account your credit history before and after bankruptcy and make a decision based on all of the facts.
        • Your loan eligibility. Lenders may view your application as risky since you’ve demonstrated your inability to pay back your debts in the past. Once you find a lender willing to provide you with a loan, make sure you’re able to repay it in order to avoid falling into the vicious cycle of debt again.
        • Your interest rate. Be aware that you can’t file for bankruptcy again for a few years. This means that predatory payday lenders will offer you money at very high interest rates. If you can avoid taking out a payday loan you should, otherwise you might find yourself stuck in another, often worse, debt spiral.
        • Your payment history. If you do decide to get a loan, make sure you have a steady income that’ll help you pay it back on-time and in full. This will help rebuild your credit after bankruptcy, which means you’ll have access to better rates down the road.

        Are payday loans available in my province or territory?

        Payday loans are available in all provinces and territories across Canada. You should be aware that payday loans are regulated by individual provinces, which means costs and fees can vary. Ensure that any lender you choose abides by the laws of the place you live.

        The Yukon, Nunavut and the Northwest Territories do not have legislation regulating payday loans at the territorial level. Payday loans are regulated in the territories at the federal level only.

        Find out how much lenders can charge across Canada

        Frequently asked questions

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