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How to Get No Credit Check Loans in Canada

Expenses like renovating a home can require a large amount of financial support. Most people apply at the bank but have a challenge meeting their credit history and score requirements, so they investigate loans with little or no credit checks.

What is a “no credit check loan” in Canada?

While there are several options for loans in Canada, from traditional banks requiring credit checks to alternative lenders whose primary consideration is your home equity, a no credit check loan in Canada is not really a type of loan. 

Simply put, a no credit check loan in Canada refers to a loan that allows people to borrow money without demonstrating their creditworthiness.  

Creditworthiness plays a crucial factor when you need a loan from traditional lenders, as the latter usually check your credit score and financial history to see if you’re a reliable borrower. 

According to Equifax, one of the two main credit bureaus in Canada, credit scores are categorized as: 

  • Poor: 599 and below 
  • Fair: 600 to 659
  • Good: 660 to 724 
  • Very good: 725 to 759 
  • Excellent: 760 and up 

A higher credit score indicates that you have demonstrated responsible credit behavior in the past, which may dictate how lenders will determine your ideal interest rate because of the increased confidence of potential lenders in your ability to repay the debt. 

According to the latest survey from the Financial Consumer Agency of Canada, 62% of Canadians believe their current credit record is good, which is 14% down from 2019. This means more Canadians may now have bad credit scores and may not be able to meet the banks’ standards despite needing financial support.  

This is why loans with no credit check in Canada can be an appealing option for those who need money within a short time frame. Loans with no credit check in Canada allow borrowers to skip past checks on their financial credit history, which can be a relief for people with bad credit. 

Regardless of no credit checks, lenders will still need your employment status, income, or debt-to-income ratio to assess your loan application. 

A mortgage agent interviewing a couple.

Types of no credit check loans in Canada

While not a complete list of types of loans without a credit check in Canada, the most common are the following 

No credit check installment loans 

A no credit check installment loan is an unsecured loan, meaning an asset does not support it. Only a handful of lenders will provide no credit check loans in Canada without collateral; if they do, the loan usually has very high interest rates.

Payday loans 

Payday loans are unsecured loans that provide borrowers with quick cash of up to $1,500. As the name suggests, payday loans are designed to be repaid by your next payday.  

There is no credit history check with a payday loan, which means it is suited for borrowers with a bad credit score and low income. With payday loans, lenders require proof of income instead. 

However, with an annual percentage rate of 442%, payday loans have very high interest rates compared to traditional short term loans and credit card cash advances. 

Car title loans 

If you own a vehicle, you can use it as collateral in a loan. A car title loan will have several lending qualification criteria, and you may need to have finished paying for your car.

Home equity loans 

Much like car loans, your property will act as collateral in the loan, but you don’t need to finish paying the mortgage. Usually, the minimum paid mortgage you need is 25%. You are also able to borrow more because your house’s value is usually greater than your car’s.

Pros and cons of no credit check loans in Canada

No credit check loans in Canada offer several advantages, despite the stigma surrounding them. However, there are also dangers associated with them, which is why it is important to weigh your options to make an informed financial decision. 

Pros of a no credit check loan in Canada

  • Simple application processes—compared to financial institutions, getting loans from alternative lenders does not require as much banking information. Applying is a more straightforward task.  
  • Quicker approvals—the bank does not reveal the results of your application until much later, sometimes months. Usually, other lenders can review your application and approve you within a few days.  
  • More accessible cash—in some urgent situations, you may need money sooner rather than later. No credit check loans in Canada are a viable option because you will receive the money more quickly. 

Cons of a no credit check loan in Canada 

  • Higher interest charges—since the lender cannot depend on a credit check for its borrowers, they will charge a higher interest rate to compensate for the added risk. 
  • Hidden fees—especially with unsecured loans, lenders may add additional or hidden fees with a no credit check loan in Canada. 

 

How to get a home equity loan with no credit check

As previously mentioned, a home equity loan requires little to no credit check. The value of the loan is not based on your creditworthiness as a borrower but rather on the value of your house and how much you have paid. The more of your mortgage that you’ve paid down, the bigger the loan can be.

Choose an alternative lender 

A financial institution will most likely conduct credit checks, so you may have to research other lenders with available home equity loans. For example, Alpine Credits majorly considers your home equity instead of your credit score

Gather documents 

While the lender may not need your credit score, they’ll need identification or proof of ownership if you offer an asset as collateral 

Apply online

Lenders make their applications easy to access by making use of an online application form. Once you receive an application decision, funding can be made into your bank account in a few days.  

What to consider in loans with no credit check in Canada

Before you apply for a home equity loan, consider the following tips to ensure a successful application: 

  • Explore all lending options— good lenders won’t just have good interest rates; they will understand your financial situation as well. Throughout the process, they will be professional and sensitive to your best interests.  
  • Calculate your equity accurately— a key step of a home equity loan process is to determine the true value of your home, so that you know whether you are likely to be able to obtain a loan. Learning how to calculate home equity will increase the financing options available to meet your financial needs. 
  • Read loan terms and conditions— always make sure that the contract and your understanding are aligned with the creditor. Before signing these documents, you should be asking questions and clarifying any misunderstandings. 
  • Discern your financial situation— it may be easier to apply for a home equity loan with less stringent criteria, but it is still a loan. Consider the funds going in and out of your bank account and make sure that you’re still able to pay off your loan in your current situation.
home equity loan equation from Alpine Credits

Conclusion: alternatives to no credit check loans in Canada with Alpine Credits  

At Alpine Credits, we know that a person is more than their credit rating and a poor credit score does not necessarily mean the end of the line for borrowers who need funding for their lifestyle or further education.  

Homeowners with some equity in their property can take advantage of home equity loans from Alpine Credits. And if you have paid at least 25% of your property’s value, you are eligible for a loan worth up to 75% of your home equity.  

The application process is quicker and smoother than applying for a loan elsewhere. Alpine Credits will not assess your application based on your credit score but only on the value of your home and your outstanding mortgage. You benefit from loans of significant value with comparatively lower interest rates.  

You can contact a Financial Solutions Specialist at 1-800-587-2161. The call is obligation-free, and you can learn more about how home equity loans work and what they can do for you.

Apply now

Frequently asked questions

When a lender doesn’t check your credit score or credit history, the loan usually has collateral securing the loan. If the loan does not require a collateral or credit check, it means the lender may offset the risk by having high interest rates and setting strict qualification criteria.

Some lenders can offer you a loan without a credit check, but the loan amount will be of smaller value and attached with higher interest rates. Home equity loans are an effective alternative to unsecured loans because they can cover multiple financial needs and have relatively lower interest rates. 

A home equity loan from Alpine Credits is one of the best options for homeowners. You can get approved fast if you have paid at least 25% of your mortgage.