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Playful couple going over their loan application.

Options for bad credit loans in BC

While banks use credit scores to determine loan eligibility, alternative lenders can provide substantial funding even if your credit score is low. Read on to learn more about the options for bad credit loans in BC. 

Understanding credit score 

Traditional sources of loans in British Columbia use credit scores as the main metric to measure a person’s creditworthiness. The score ranges from 300 to 900, and the higher scores indicate to the lender or bank that you repay your outstanding balances on time. 

  • Poor: 300 to 599 
  • Fair: 600 to 659 
  • Good: 660 to 724  
  • Very good: 725 to 759  
  • Excellent: 760 to 900 

The minimum credit score requirement is 600 for traditional financial institutions. Although it’s possible to get traditional loans, the chances of getting approved are lower. Even in the case of approval, interest rates are higher, and the approved loan amount may not be ideal. 

Some bad credit lenders in BC offer alternate financial solutions to accommodate those with low credit scores. Unlike traditional loans, a credit check is less likely to be part of the loan application.

A happy couple going over their loan application.

What are bad credit loans in BC? 

A loan for bad credit is a lump sum that is usually more manageable to qualify for despite having a bad credit score. Bad credit loan lenders can approve people of different financial backgrounds because they’ll determine your eligibility based on other factors outside your credit score.  

Bad credit personal loans can be referred to in multiple ways. They may be called payday loans, online loans, or no-credit-check loans in BC. Regardless of what they’re called, they accomplish the same goal, which is providing bad credit borrowers with the opportunity for additional funding despite their credit rating.

Advantages of poor credit loans 

A poor credit loan can have many benefits. The following are some of the advantages and reasons that people choose to borrow bad credit loans.  

  • Flexible approval criteria—a poor credit score or your financial situation will not influence your eligibility compared to applying for a traditional loan.  
  • Quick processing—bad credit loans are a good option for a financial emergency because you can receive the loan funds within a few hours. You can receive the money quickly because the lender may not conduct credit checks. 
  • Multipurpose—most loans have their name because of what they’re for, but a bad credit loan can be used for any reason. Many use the money to consolidate debt or pay for sudden medical bills.

Options for bad credit loans

You can find different ways to obtain bad credit loans in British Columbia. They usually fall into two major categories, which are unsecured and secured.

Unsecured personal loans

Unsecured loans are lump sums where approval is usually based on your creditworthiness because the lender doesn’t require an asset as collateral. An unsecured loan can be more challenging to qualify for because lenders normally check your financial background. 

Getting approved for unsecured loans can require that you have a strong credit score or a stable source of income. Some lenders may have opportunities to accommodate those with lower credit scores, but the offer could mean a high-interest rate. 

Secured personal loans 

A secured personal loan is a type of loan where you’re required to provide an asset as collateral. The role of the collateral is to demonstrate your guarantee to the lender that you’ll repay your loan. As a result, the approval criteria are more flexible, and the interest rates are comparatively lower.  

  • Car title loans—one way to secure a loan where your credit score does not play a significant role is by providing your vehicle as collateral. While they are processed more quickly and accommodate those with a bad credit history, vehicle title loans can have very high-interest rates. 
An illustration of how home equity works.
  • Home equity loansyour home is a valuable asset, and you’ve been building equity in it if you’ve been on top of your mortgage payments. If you have sufficient equity, you can access the amount as a loan. You can find out your home equity by subtracting your outstanding mortgage balance from the appraised value of your home.  

Where to get loans for bad credit 

Loans are traditionally from major financial institutions, but they may be more challenging to qualify for those with bad credit scores. Besides the bank, loans can be found from a credit union or an alternative lender.  

Credit unions 

A credit union is a financial institution that is owned by its members and is non-profit. Though they are regulated by the government, decisions are made by its board of directors, and all members can dictate the way the credit union will operate.  

You may be able to get a loan from your credit union if you are in one since they focus more on serving their members. They may allow those with lower credit scores to get a loan, but processes can take just as long as they would at the bank.

Alternative lenders 

Alternative lenders are institutions that have more flexible loan approval criteria than traditional banks and credit unions. Regardless of your credit score or income, some alternative lenders allow you to borrow a significant amount. 

One example of an alternative lender is Alpine Credits, who focuses on lending home equity loans. Regardless of your credit score or income, you’re approved as long as you have the minimum amount of equity in your property.

Home equity loans for bad credit 

Getting additional financial assistance shouldn’t be limited by your credit score, and everyone should get the opportunity to reach their goals. With a home equity loan from Alpine Credits, you can get the financial support you need while benefiting from flexible eligibility requirements and comparatively lower interest rates.  

If you’re a homeowner in BC with enough home equity, you can apply for a loan that can be completed online. Since housing values in BC are some of the highest in Canada, you could receive a potentially substantial loan. 

  1. Apply online—the application is simple and can be finished in a few minutes. The only information you need to provide is your personal details and applying will not affect your credit score.  
  2. Get approved—the process moves more quickly with Alpine Credits compared to traditional financial institutions. If you own at least 25% of your home, you could receive approval within a few hours. 
  3. Receive the funds—you’ll receive the money in your bank account in a few days or less. You can start your journey towards your financial goals, whether debt consolidation or home renovation.  

If you have more questions about home equity loans or the application process, you can contact a Financial Solutions Specialist at Alpine Credits. They are experts and help you navigate your decision about home equity financing.  

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Frequently asked questions

Despite your credit score, you can find alternative financing solutions like home equity loans. Eligibility for a home equity loan depends more on how much equity you have rather than your credit standing. The home equity loan can also give you the opportunity to improve your financial habits. 

If you’re a homeowner, one of the most accessible forms of additional financing is a home equity loan. Not only does approval rely on factors outside your credit score, but the processing time is quick, allowing you to access the funding sooner.

Traditional lenders prefer to lend to those with a credit score of at least 660, so getting a personal loan with a score of 450 would be challenging. Another way to get a loan with not-so-deal credit scores is through a home equity loan because the most important aspect is that you own your home.

Bad credit loans have different qualification criteria, such as having a steady source of income or a collateral asset with enough equity. The requirements can be different between different lenders, and to qualify for a home equity loan from Alpine Credits requires that you own at least 25% of your home.