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Even with bad credit an installment loan can be a possibility when looking to borrow. This type of loan is popular with Canadians that have less than perfect credit and provide options for those that would find it not possible to get approved for a personal loan.
An installment loan can be the answer for those that qualify and provide an acceptable alternative with affordable payments that provide the needed funds, often as soon as the next business day.
Not everyone qualifies for a personal loan, which tends to have preferrable interest rates. The alternative for most will be installment loans. While these have higher rates, those that would not be eligible for a personal loan will choose an installment loan as the alternative.
Installment loans are sometimes referred to as bad credit loans and AimFinance is one such lender that can provide the funds you may need to take care of bills or other expenses. As with most lenders, the application process is simple, and you usually get a decision within minutes.
Lenders often have similar criteria for eligibility, but they often have their own unique requirements that will make the difference for your loan request to be approved.
Some of the more common requirements for being eligible can include being a citizen or resident in Canada, minimum income, being employed, having a chequing account, and your credit score. Other factors that are reviewed can include your amount of debt and other loans you may have. Other considerations are whether a lender is licensed in your province and whether you have filed for bankruptcy or a consumer proposal in the past, which stays on your credit profile for several years.
You can read more about installment loans to learn about how they work here. Lenders typically assess the creditworthiness of a borrower by reviewing their credit history and credit score. A higher credit score typically indicates lower credit risk to the lender and helps with your chances of being approved.
Before you apply it’s best to look over any requirements for borrowing. Ensuring that you meet any terms or requirements often saves you time in the long run. You should also know your credit score beforehand as it’s often a deciding factor.
Most lenders require a credit score close to 600 and may consider an application that is slightly below, but not by much. The lower it is, the less options you may have. If your score is too low, you might only be eligible for high interest loans with less favorable terms, which are best avoided.
Choosing the right loan amount can help with the application process. If you were requesting a large sum where it doesn’t look like the payments would fit with your budget, that may affect your chances of being approved. Additionally, the accuracy of the information you submit is also important.
In some cases, if your need to borrow isn’t urgent, it can be worth waiting before applying. An example being if your credit score were around 500 and most installment loan options had a minimum credit score requirement that was higher, you probably would not be approved by most. Improving your score in this case would improve your chances of being approved.
Another example of when waiting before applying might be considered is when you have too much debt that might affect your application. Taking the time to pay down that debt before applying can also prove to be beneficial for your application.
No matter where you choose to borrow, it’s advised to carefully read over the agreement and make sure that you fully understand the terms. Things to look for include the scheduled payments, interest rate, along with watching for any fees you might not have noticed being mentioned before or details like a prepayment penalty. AimFinance encourages responsible borrowing and advises anyone borrowing to take the time to review a loan agreement before signing.
