Guaranteed Approval Loans For Poor Credit Canada

Having poor credit can make it difficult to qualify for a loan in Canada. Even if you’re approved for a loan, it might come with a higher interest rate or a smaller loan amount. Lenders advertising guaranteed approval loans might catch your attention if you need fast access to cash. While it’s possible to get approved for personal loans with poor credit, there is no such thing as a guaranteed loan. Legitimate lenders require some sort of qualification process.  

If you see an ad for a guaranteed approval loan, approach it with caution. Do your research to ensure the company is legitimate and make sure you understand the loan terms.

While there’s no such thing as a loan that guarantees your approval, you still have options, even if you have a bad credit score. There are many legitimate options for quick cash loans, instant loans, and unsecured bad credit loans.

Here’s everything you need to know about what guaranteed approval loans are and how to get approved for a loan with poor credit.  

What Are Guaranteed Approval Loans?

As mentioned, there’s no such thing as a “guaranteed approval loan.” Legitimate lenders require some sort of approval process. Many alternative lenders offer bad credit loans in Canada for people with poor credit. Examples of legitimate bad credit loans include:

• Payday loans. Short-term quick loans that come with super high fees and interest rates. 
• Car title loans. Requires you to use your car to guarantee that you’ll repay your loan.  
• Cash advance loans. These are small short-term quick loans that typically don’t require a credit check. 
• Bad credit personal loans. Typically charge high interest, resulting in higher monthly payments. 
• Installment loans. Offer a lump sum amount that you have to pay back in regular intervals. 

Unlike traditional loans from traditional lending institutions, some bad credit lenders make it possible to borrow money with poor credit or no credit history. But you still have to meet certain qualification criteria which might include:

• Proof of steady income. You have a consistent source of income and can back it up with pay stubs or bank statements. 
• Valid bank account. You must have a valid Canadian checking account. 
• Personal identification (ID). You’re able to produce a valid picture ID to prove your identity. 
• Proof of collateral. Some lenders require you to put up collateral to borrow. For instance, a car title loan typically asks for proof of ownership and insurance, and photos of the vehicle before you can qualify for a loan. If you default on your loan, you risk losing your car. 

How to Get Approved for a Loan With Poor Credit?

If you have a poor credit score and you want to increase your chances of getting a loan you can work on improving your credit, here are some tips to get you started. 

• Know your credit score. You need to know what you’re working with before you start applying for loans. This way you can see how likely you are to get approved. You can get a free copy of your credit report online, by mail, phone, or in person by visiting the Government of Canada's website. 
• Pay down your debt. Lenders also look at your debt-to-income (DTI) ratio to see if you can afford to take on a loan. Your DTI compares your total monthly debt to your total monthly income. Paying down your debt will help to lower your DTI, which lenders want to see. 
• Boost your income. Taking on extra hours at work or starting a side hustle can help you earn more money which you can use to pay off your debt faster. 

Once your credit score starts to rise, you can focus on finding reputable lenders that offer loans to borrowers with lower credit. 

• Research lenders. Compare multiple lenders to find the loan that offers the best rate and terms for you. Also, confirm that it is a legitimate lender by looking it up on sites like the Better Business Bureau (BBB). 
• Prepare your documents. Most lenders will require personal identification, proof of income, and proof that you have a valid Canadian bank account. 
• Submit your application. Once you’ve chosen a lender, you can submit your application and wait to hear back. Many bad credit lenders offer a decision within 24 hours of submitting your application.   

Benefits of Guaranteed Approval Loans

Bad credit loans Canada are about as close as you can get to a guaranteed approval loan. Here are some of the benefits they can offer: 

• No credit check. Many bad credit lenders don’t require a minimum credit check to qualify, so even individuals with poor credit scores can qualify. Instead, no credit check loans usually use other criteria like proof of income or collateral. 
• Quick loan approval process. If you need fast access to cash, many bad credit lenders can approve your loan application within 24 hours of submitting it. 
• Fast access to cash in an emergency. If you encounter an unexpected or emergency expense, a bad credit unsecured personal loan provides a quick alternative to traditional loans. 
• Opportunity to build credit. With some lenders, you can work on building your credit if you make your payments on time.

Risk of Guaranteed Approval Loans 

There are also risks that you need to know about before you take on a guaranteed approval loan. 

• Scams. Since there is no such thing as a guaranteed approval loan, you’ll want to make sure you aren’t being scammed. With a bit of research, you can determine if the company is legit or if you should look elsewhere. 
• Higher interest rate. Many bad credit loans come with high interest rates because the lender is taking on more risk. Make sure you’re aware of the cost of borrowing and that you have a repayment plan in place. 
• Potential to lower credit score. If you take on a bad credit loan and can’t make your repayments in time, this can lower your credit score. A low credit score can make it even harder and more expensive to get a loan in the future. 

Alternative Borrowing Options 

If you have a bad credit score and you’re not able to qualify for a loan with a traditional lender, you have other options. 

• Cash advance loans. Lenders like Bree allow you to take on short-term loans with no interest payments, no credit checks, and no late fees. With Bree, you can borrow up to $350 which is deposited into your bank account within minutes.
• Add a co-signer. If you’re struggling to get a personal loan from traditional lenders because of your credit score, consider adding a co-signer. A co-signer is someone who agrees to pay off your loan if you can’t. While they take on equal responsibility, they don’t get to access the funds. Adding a co-signer who has a strong credit score and solid income may help to increase your chances of getting approved.
• Friends and family. Asking friends or family for money can feel uncomfortable. But if you’re stuck, it’s an option. If you do borrow money from someone close to you, make sure you discuss the details of when you’ll pay them back and if they’ll charge interest.    

Is a Bad Credit Loan Right For You?

While legitimate lenders don’t offer guaranteed approval loans, there are several options for borrowers with bad credit scores. Many of these lenders don’t require a credit check and can approve your loan application in 24 hours or less. Even when you’re really in need of cash, take a few minutes to explore your options and confirm the legitimacy of the lender.