Bad Credit Loans in Canada | Refresh Financial | Credit Tips and Tricks

Official blog of Refresh Financial

Bad Credit Loans in Canada

bad credit loans

Have you heard of bad credit loans? Your credit score is one of the biggest factors – sometimes the only factor – that goes into determining if you will be approved for a loan. In most cases, if your credit score is too low you will be denied a loan as the lender views you as too high of a risk to lend to. There are, however, some lenders that are prepared to loan money to anyone, even people with a low credit score.

Bad credit loans may seem like a good idea, but in reality, they should be avoided unless you’re absolutely desperate. Never take out one of these loans for a ‘want’ such as a new car, a bigger TV, or a vacation. They should be taken out with extreme caution for something unavoidable. Here’s why:

The Drawbacks of Bad Credit Loans in Canada

A bad credit loan is risky for the lender for two reasons: (i) bad credit loans are unsecured. If you do not make your repayment, the lender has no way of recouping their money. (ii) borrowers with lower credit score are more likely to not-repay the loan – their low credit score has indicated that this has happened in the past.

  1. To compensate for these risks, lenders charge a premium interest rate. Whereas with a good credit score you might pay 5% in interest for a cash loan, with a bad credit loan you may be paying up to 50%! The reason for this is that the lender is trying to recoup as much of their money early on as possible, before the likelihood of defaulting on the loan gets higher.
  2. Bad credit loan providers have sometimes been known to be predatory lenders, charging many hidden fees to ensure they get as much money out of a desperate borrower as possible, although the regulatory landscape for bad credit loans has tightened in recent years.
  3. You may find yourself in an endless cycle of debt with bad credit loans. Borrowers often find themselves unable to afford to make the full payments and subsequently, roll their debt over into a new loan, which includes more fees and high interest. It can be a situation that becomes impossible to get out of.

Bad credit loans are not uncommon in Canada. However, it’s important that if you do decide to take out one of these loans, you do your research and ensure you are going with a reputable company rather than a loan shark. It’s imperative that you pay back the loan on time and in full if you want to build some credit as a result of the loan. If you default on any of the payments your score is going to get worse and worse, and you may find yourself in too big of a hole to dig yourself out of. Use extreme caution when taking on a bad credit loan.

Refresh Financial offers custom credit building solutions to Canadians wanting to increase their credit score. Our products are safe and effective, ensuring credit is built without going into debt.

build-credit

Leave a Reply

Your email address will not be published. Required fields are marked *

*

41 + = 47

    What Canadians are saying about Refresh

    I would like to thank Refresh Financial for helping me get out of a bad spot. I never thought it was possible and almost gave up on things and then I saw Refresh Financial and and gave it a try. At first I was unsure of things but to see my credit score now makes me a believer in this program.

    – Aaron A

    “It hasn’t even been a year yet, possibly only 6-7 months, and my TransUnion score has gone up over 100 points. That was only the tip of the iceberg as recently I was able to get a consolidation loan from my bank that allowed me to move forward and make things easier for me. Talk about second chances!”

    – Angelica M

    “I am now in a position where I am able to obtain credit (just bought a brand-new car and refinanced my mortgage for a fantastic rate) and it took little to no time at all. I would 100% recommend Refresh to anyone looking to rebuild credit with as little hassle as possible.”

    – Cathy M

    “I had not heard of a company doing such a thing before someone suggested it to me and it made sense. I am not very good at saving money and Refresh Financial helped me. I have dealt with them for years now and never had a problem. The customer service is excellent and fast.”

    – Chris C

    Refresh helped me regain credit following a nasty divorce, which left me with a very poor rating. They were able to remarkably help me go from a 480 to a 600 score, in just over a year. Thank you Refresh!”

    – Deb K

    I have watched my credit score jump since being with Refresh and I have already recommended it to friends and family. Thank you for helping me build my credit faster for my future and my children’s future :)”

    – Heather T

    At first I was skeptical because I wasn’t getting funds upfront and had to make payments when I really needed the money. I’ve been in the program a year now and have noticed my credit has improved drastically!”

    – Irene L

    I have been a client of Refresh Financial for approximately 3 years. Since being a client they have improved my credit immensely. Definitely recommend this company to anybody that needs help re-establishing credit.”

    – Jason I

    “I recommend this program to anyone having credit issues. At the end of the agreement, your money is refunded to you. There were times I found myself short on cash and Refresh, with permission, used a portion of my money to clear up my arrears.”

    – Margaret L

    “I would like to thank Refresh Financial for their professionalism, great customer service and for helping get back to a better financial situation. I have always been treated with the utmost respect.”

    – Martine B

    Refresh Financial is an amazing program to help people get back on their feet. I was rock bottom with nowhere to turn. My credit was beyond poor. I would recommend them to anyone. If I can do it surely anyone else can.”

    – Matthew S

    “Great company to deal with for rebuilding credit, very simple process to get started. Good service if you ever have questions.”

    – Mike L

    This business truly cares about its clients. The customer service is always quick to return calls or emails. Their online portal functions very well so as a customer you are always updated as you progress with your loan.

    – Phil J

    “Refresh Financial has made us more aware of how to take care of our financial situation and be more responsible, and making payments on time is rewarding in the end for credit. Thank You sincerely.”

    – Rocky M.

    “Refresh financial is great!!! They boosted my credit score, helped me save money and helped my husband and I buy our house;) I was not only a number to them, they stayed in touch and helped me out along the way. Answered all my questions and concerns.”

    – Sara B

    “Refresh Financial had been exceptionally good to me! I’ve just been out on medical leave and they have accommodated me with my payments without hesitation!! I was in a really bad spot with my credit and they have helped me to try and correct it!! Bravo!”

    – Shannon B

    This company has been nothing but fantastic. They have gone above and beyond to help me. This program has given me the relief and peace of mind I need. I would certainly go back to them and give them names of people who could use this.”

    – Shirley K

    The financial services products are excellent for new immigrants, low-income earners and small business owners. Loans, savings and credit building all in one solution is a perfect fit to help with financial goals and stability.”

    – Soraya H

    “After successfully going through a credit rebuilding loan, I was able to use my built-up equity to purchase a newer vehicle and I have since been approved through a financial institution for a loan.”

    – Tanya W

    “I made some poor credit choices when I turned 18 and have always had this lingering thought of how am I ever going to better my score. Since being with Refresh I have realized that I took the right step towards bettering my future.”

    – Taylor B

    “Thank you Refresh, and my relationship manager for giving me the tools for a better score with a secured card and two credit builder loans. I feel absolutely confident I’m on a better path to financial success. I am happy to be a long term client.”

    – Trevor P

    I’m so excited I’ve joined refresh! I’ve already seen a huge increase on my credit after the first month! The staff are a delight and make this so easy to understand. I strongly recommend Refresh Financial even if you have good credit this will give you a boost and you’re saving money with the reverse loan!”

    – Wayne B