How to Qualify for a Personal Loan in BC

Once it has been determined that a bad credit loan is the best step for you as bad credit borrowers to get financial assistance, how do you qualify? That depends on the lender and the type of bad credit loan you decide to take out. Before you start filling out bad credit loan applications, you must decide if you want to build your credit with the loan, how much money you need, and if you want to put up any collateral. Every lender is going to have different qualifications depending on these factors, and, when it comes to bad credit loans in British Columbia, there are many different alternative lenders to choose from.

For almost all bad credit loans in BC, along with a completed loan application, a few main factors are required to qualify. You must:

• Be a Canadian citizen or permanent resident
• Have a Canadian bank account 
• Be at least 19 years of age
• Meet the lender’s minimum income requirements
• Provide required documents to the lender, such as government-issued ID and proof of income (eg: pay stubs, direct deposit statements)

Depending on whether you are applying for bad credit payday loans or bad credit personal loans will determine if a credit check needs to be done. If a secured loan is required, an assessment of the value of the collateral will be needed.

What is Bad Credit?

Bad credit is based on a number of factors, such as payment history, your debt-to-income ratio (DTI), how new you are to credit, credit history, the number of inquiries you have on your file, and any public records such as bankruptcy or collections. Credit bureaus (Equifax and Transunion) use the combination of these requirements to calculate credit scores. This credit score communicates to lenders the risk of lending, aiding in the decision-making process for loan approvals. The lower the credit score, the riskier it is for the lender to approve a loan. In Canada, British Columbia included, bad credit, or a low credit score, is considered to be a score that sits below 600. While sometime debt consolidation loans can help to fix your financial health and increase your credit score, the difficult part is getting the debt consolidation loan.

What Companies Will Give You A Bad Credit Loan in BC

In British Columbia, there are many companies that can give you a bad credit loan. Most of these companies, such as Spring Financial, are online. Because these companies are based online, they can accommodate more applicants and allow more credit approvals for those with bad credit. These companies often specialize in bad credit loans and are referred to as bad credit lenders. These companies often allow for credit-building opportunities. Because there are so many options available regarding bad credit lenders, it is important to not overapply. Too many credit inquiries in a short period of time can reflect negatively on a credit report, making it more difficult to access funds.

In some cases, it is still necessary to take out a payday loan due to the lack of credit checks required. Even with a bad credit loan, there are some stipulations on minimum credit score requirements as well as other requirements that need to be met. These requirements vary depending on the lender.

How Your Credit Score is Affected by a Bad Credit Loan

One of the biggest questions when looking for a bad credit loan is if and how it affects your credit score. The short answer is that it will only work if you use a lender that reports to the credit bureau. So, if you use a lender that does not report to the credit bureau unless you default on that loan and go to collections, that loan will have no effect on your credit. If you are using a lender that provides loans with a credit check or credit-building capabilities, such as online lenders that specialize in bad credit loans, then your payments will be reported to the credit bureau. The effect it has on your credit score is based on whether you make your loan payments on time, which determines whether the impact is positive or negative.