How to Qualify for a Personal Loan in BC

In order to qualify for personal loans in British Columbia with a reputable lender, the lender first performs a hard credit check. This not only shows them your credit score but also your debt-to-income (DTI) ratio. In order to qualify, most lenders require you to have a debt-to-income ratio of less than 45%, while some will go up to 50%.

Some lenders also require a minimum monthly income in order to get a successful personal loan application. In BC, this can range anywhere from $1200 to $2000. It is also important that this does not have to be employment income; there are many kinds of income that are accepted, but some of those do have stipulations. Here are some examples:

• Employment Insurance
• Disability Assistance/Disability Pension
• Pension
• Structured Settlement
• Self-Employment
• WCB (Workplace Compensation)

Then there is the question of Social Assistance and Child Tax. While these are accepted income sources as secondary sources of income, it is difficult to get a loan with just either of these sources. Some lenders will not accept them; however, you are able to get payday loans.

Personal Loan Amounts in BC

In British Columbia, the average you can get for unsecured personal loans is between $500-$35,000, all with different loan terms. Just like the rest of Canada, the amount you are approved for is based on your credit score as well as your ability to afford the loan. It is possible to get unsecured loans of $50,000 or sometimes even up to $100,000, but that depends on what the loan is needed for. Higher loan amounts are usually given for purchases, while lower loan amounts are more common to cover unexpected expenses. 

Most personal loans that go above $35,000 are secured loans. This just means that an asset is used as collateral. Banks tend to lend more money when collateral is involved so they can guarantee a return on their investment. Some examples would be car loans or home equity loans. However, no matter if your loan is secured or unsecured, you can get loan insurance to help cover the cost in the event you’re unable to afford your payments.

Personal Loans and Credit Checks

There are such things as no credit check loans; however, because they don’t check your credit report, they often don’t positively impact your credit score. Therefore, you can end up stuck in the cycle of constantly borrowing while being unable to improve your credit health.

Payday loans, some personal loans, and vehicle title loans can all be gotten without a credit check. However, this does mean you will get approved if you apply. They all have some minimum factors that apply.

Depending on where you apply, you must be 18 years of age (some are 19), have a fixed address and have some sort of income. If you meet these requirements, then you will get approval in most cases. However, avoiding this option is recommended. These types of loans can end up costing you much more than you borrow and make it difficult to get a loan that provides a lower interest rate because, even though they don’t contribute to your credit score positively, they still impact your debt-to-income ratio.

Credit Score Needed for Personal Loan Approval

To get approved for a personal loan, the higher the credit score, the better, but that does not mean that you can’t get a loan with a lower credit score. It ultimately depends on the lender, your overall credit history, your financial history, and the interest you are willing to pay.

If you fall in the categories of Excellent, Very Good, or even Good (690 and up) and have a high credit score, your chances of getting a personal loan with a lower interest rate are pretty good.

If your credit score falls into the Fair category, you will most likely need to go through alternative lenders. One of these would be online lenders like Spring Financial. You can apply online with instant bank verification and receive your loan approval faster with a flexible repayment schedule. They, like many alternative lenders, offer personal loans to those with all credit types, not just those with good credit scores. 

 It’s possible you would qualify for this with poor credit as well, but you may have to apply with payday loan companies. You may have also referred to these as bad credit loans. However, they aren’t the only type of bad credit loan. They also have bad credit personal loans.