Applying for a loan is no tough task in this digital era. Most of the lenders provide their customer the convenience of applying online through their website.
However, the biggest hindrance here is a bad credit score as you may face difficulties while finding a lender who offers loans to people with a low score on favorable terms.
- Here are some of the factors that contribute to making a credit score:
- Non-payment of credit card bills
- Late payment of loans obtained
- Missed installments
- A case of debt collectors; this happens when a company hires third-party collectors to collect the amount of loan on their behalf
- A charge off by the creditor in case of non-payment
- Declaring bankruptcy
- Foreclosure actions taken against you
- An unpaid judgment against you
- A proven loan default record
No Credit Check. Is It Possible?
A bad score can affect an individual in more than one ways. To begin with, they can find difficulties in getting their loan applications granted. Fortunately for them, private lenders are here to their rescue.
Two Factors To Remember:
1. It has become a common way for people in Canada to get a loan to meet their financial needs. It is not necessary for you to contact a private lender only if you have a low score. You can apply for a loan even if you have been successful in managing your financial life.
2. For people with a low score, some private lenders in Canada offer loans that do not require a credit check. It implies that their score is not taken into consideration when they apply. Their application is granted on the basis of other factors; these include:
Current Financial Position
The current financial standing of the borrower is checked to confirm their ability to repay the loan. This includes their credit obligations and liabilities.
Proof of Income
The borrower must have a sound source of income and they must be able to provide its valid proof to the lender to get the desired approval.
The borrower must prove their identity through identity proofs. Lenders require their driver’s license and other such documents for this purpose.
Canadian Citizenship Proof
Some lenders only offer loans to people who have Canadian citizenship. Therefore, providing a valid proof of their citizenship may also be required by the lender for approving their application without a score check.
Security (In Case of a Secured Loan)
If you are applying for a secured loan, you must give any of your asset or property you own as collateral to the lender. In case of non-payment, the lender can take foreclosure actions on that particular asset. This is why some people do not like the idea of applying for these loans as they can use their assets in a more productive way.
Read more: Unsecured Loans
Availability Of Loans
For people with a low financial score, there are different types of loans available. Whether you want a secured or unsecured loan, long-term or short-term loan, personal or debt consolidation, you can get them by contacting a reliable private lender.
A Key Advice
When applying for the loan, make sure the repayment schedule is devised keeping in consideration your convenience. Moreover, ensure that you have read all the terms and conditions thoroughly. Go through every clause mentioned in the agreement to ensure there is no risk of fraud or there are no hidden charges.
Following these precautionary measures can save you from landing into tough circumstances in the long run.
Read More: What Rights do I Have as a Borrower?