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Guaranteed approval loans for poor credit
A legitimate lender will never offer guaranteed loan approval, but there are some loan options available where your chances of getting approved are high.
If you’ve got bad credit, it can be extremely difficult to find a loan from a traditional lender such as a bank. The good news is that there are many alternative lenders that offer loans to borrowers like you. But while some lenders may try to tempt you with the promise of a guaranteed approval loan, be aware that this is too good to be true.
Are there guaranteed approval loans for poor credit in Canada?
No. There is no such thing as a guaranteed approval loan in Canada. Before offering you a loan, a responsible lender will assess your income and determine whether you’re able to repay the loan.
In fact, if a lender promises guaranteed approval, that’s a red flag that could indicate a scam. So if you see a lender advertising guaranteed loan approval, steer clear.
But there are loans that are almost guaranteed approval because of their lenient eligibility requirements. Check out the list below for a rundown of the available options.
1. Get a payday loan
- How it works: Payday loans offer fast access to small loans with short repayment terms. You can apply online or in-store, and many lenders offer same-day loan approval and funding. You’ll then have up to 62 days to repay what you borrow.
- How much you can borrow: Up to $1,500.
- How much it costs: $14 to $17 for every $100 borrowed, depending on your province.
- Why it’s almost guaranteed: Bad credit borrowers are accepted. Instead of focusing on your credit score, payday lenders will focus on your income and whether you can afford to repay a loan.
- Risks: Payday loans are expensive to repay and come with very short loan terms, which can make it easy to get trapped in a cycle of debt. You’ll also need to watch out for illegitimate lenders and payday loan scams.
⚠️ Warning: Be cautious with payday loansHigh-cost payday loans are unsustainable for borrowing over a continued period of time and are expensive as a means of longer-term borrowing. 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). You may also want to consider payday loan alternatives.
Compare payday loans
Maximum borrowing costs of payday loans per provinceAlways 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 & Nova Scotia||$17 per $100 borrowed|
|Newfoundland and Labrador||$14 per $100 borrowed|
|Quebec||Limit of 35% annual interest rate (AIR)|
2. Apply through a loan broker
- How it works: Personal loan brokers work with a network of lenders to offer access to a variety of personal loans. After assessing your borrowing requirements, a broker can help you find a loan that matches your needs.
- How much you can borrow: Up to $50,000 (depending on the lender’s eligibility requirements).
- How much it costs: Many loan brokers don’t charge fees, but some do. Loan rates and fees vary depending on the lender you choose.
- Why it’s almost guaranteed: The broker can use its database to match you with a lender with eligibility criteria that match your financial situation.
- Risks: Choosing a loan broker that only works with a small network of lenders can limit your range of options. Also, make sure you check whether the broker gets paid a different commission from different lenders and whether that affects the loans they recommend.
Apply through a loan broker
3. Get an installment loan for poor credit
- How it works: Many online lenders offer installment loans with more lenient eligibility criteria than traditional lenders such as banks. This means that if you have sufficient income to repay what you borrow, your bad credit won’t stop you from getting a loan. However, installment loans have higher interest rates and lower loan amounts than regular personal loans.
- How much you can borrow: Up to $15,000 (maximum loan amount varies depending on the lender and your personal financial situation).
- How much it costs: Interest rates of up to 46.96%.
- Why it’s almost guaranteed: Many alternative lenders have lenient eligibility requirements and specialize in loans for borrowers with bad credit.
- Risks: Installment loans for bad credit borrowers come with high interest rates. You’ll also need to be wary of long loan terms that could result in you paying more than the loan amount in interest charges. Finally, do your due diligence to make sure you only ever deal with legitimate lenders.
Compare installment loans for poor credit
4. Get a vehicle title loan
- How it works: A car title loan is secured with the title of your car, which allows you to access a higher loan amount and better interest rate than with an unsecured loan. Of course, you’ll need to own your own vehicle and it’ll need to be in excellent condition if you want to qualify for this type of loan.
- How much you can borrow: Up to 50% of your vehicle’s value.
- How much it costs: APRs typically range between 9% and 49%.
- Why it’s almost guaranteed: By offering your car title as security, you decrease the lender’s level of risk. This increases your chances of approval and can also help you access a larger loan amount and a better rate.
- Risks: Make sure you read up about all the fees that apply to a vehicle title loan, such as vehicle evaluation and title search fees. If you default on the loan, the lender could repossess and sell your vehicle to cover its losses.
Get a vehicle title loan
5. Get a loan from a pawn shop
- How it works: With a pawn shop loan, you can borrow money when you offer a valuable item as collateral. For example, you may secure your loan with jewellery, up-to-date electronics or a musical instrument. You’ll then typically have between 30 days and a few months to repay what you borrow.
- How much you can borrow: Typically 20–60% of the resale value of your collateral.
- How much it costs: Rates typically fall in the 5–30% range.
- Why it’s almost guaranteed: Offering an asset as security decreases the lender’s risk. If you can’t repay the loan, the lender can sell the item to cover its losses.
- Risks: Watch out for high interest rates and any additional fees that may apply. If you fail to repay your loan, the pawn shop can sell the item you offered as collateral.
6. Get a credit builder loan
- How it works: A credit builder loan is designed to help you improve your credit score while also setting aside money. Essentially, you must repay the loan amount in full before the funds are actually deposited into your bank account. The lender will report your on-time payments to the credit bureaus to help you improve your credit history.
- How much you can borrow: Typically $1,250–$10,000.
- How much it costs: Interest rates typically range from 9.5% to 20%.
- Why it’s almost guaranteed: Credit builder loans are designed for borrowers with bad credit (or no credit history) who are trying to improve their credit score. As a result, these loans have lenient eligibility requirements.
- Risks: Credit builder loans are not suitable if you need access to money straight away. High interest rates can also apply, and you’ll need to check the fine print to find out about loan fees.
7. Get a secured credit card
- How it works: Just like credit builder loans, secured credit cards are designed to help you improve your credit score. You’re typically required to put down a security deposit for your card, which not only serves as collateral for the card but also becomes your credit limit. By paying for purchases with the card and then making on-time payments towards your card balance, you can improve your credit score.
- How much you can borrow: From $75.
- How much it costs: Aside from the upfront deposit, expect APRs of around 18–20%. Some cards also have an annual fee.
- Why it’s almost guaranteed: Your credit score doesn’t affect your ability to qualify for a secured credit card. The lender can collect your security deposit if you fail to make on-time payments.
- Risks: You risk losing your deposit if you can’t pay off your card. Be aware that annual fees and foreign transaction fees may also apply.
Are there no credit check personal loans with guaranteed approval?
No. No credit check personal loans with guaranteed approval do not exist. As mentioned above, a lender needs to assess your ability to repay a loan before it can approve your application. Promising guaranteed approval is a tell-tale sign of a loan scam, so avoid any lenders that do this.
However, no credit check loans are available. To qualify, you will typically need the following:
- A steady income
- A debt-to-income (DTI) ratio of less than 40%
No credit check loans come with higher interest rates than traditional personal loans, so make sure you can afford to repay what you borrow. It’s also important to be aware that sketchy lenders sometimes use the “no credit check” to entice unsuspecting borrowers, so research any lender thoroughly before applying for a loan.
How to make sure you apply to a legitimate lender
Remember the following tips to help you find a reputable lender:
- Check the lender’s bona fides. Make sure the lender is registered and properly licensed. For example, payday lenders require a payday loans licence in the provinces in which they operate. You can also check whether the lender has a legitimate physical address and is accredited with organizations like the Better Business Bureau.
- Know the regulations where you live. Avoid lenders that don’t abide by lending regulations in your province or that seem sketchy in any way. For example, if they promise guaranteed approval, if they ask you to pay a fee upfront or if they’re not transparent about the total cost of a loan, walk away.
- Read reviews. Check out reviews from previous customers on independent sites like Trustpilot. Would they recommend borrowing from the lender?
Alternatives to guaranteed approval loans for bad credit in Canada
It’s worth considering all the alternatives before taking out an expensive loan. Options include the following:
- Credit counselling. A credit counsellor can assess your financial situation and help tailor a plan to get you out of debt. Visit 211.ca to find a counsellor in your area.
- Debt management program. When you sign up to a debt management program, a credit counselling agency negotiates with your creditors on your behalf. The aim is to convince them to combine your debts into a single monthly payment with a reduced interest rate. This will negatively affect your credit score.
- Debt settlement. Debt settlement is when a debt relief company or credit counselling agency negotiates a lump sum with all your creditors that you can pay off to settle your debt. This can allow you to pay back less than what you owe, but you may need to pay a fee to the debt settlement company and it’ll also hurt your credit score.
- Consumer proposal. A consumer proposal is a legal agreement between you and your creditors. It involves you offering to pay back a percentage of what you owe, negotiating a longer period to pay back your debt, or both of the above. However, it’ll hurt your credit score and stay on your credit file for three years after you finish your repayments.
Guaranteed approval loans for poor credit sound too good to be true, and they usually are. Steer clear of any lender that promises guaranteed loan approval, and consider the seven almost guaranteed approval alternatives listed above. Make sure to compare a range of loan options, and make sure you can afford to repay what you borrow before you apply.
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