Small Personal Loans for Bad Credit for April 2024

Get a small loan for bad credit score from one of the lenders verified by our specialists. On 24.04.2024 there are 7 options available to you. Increase your chances of getting a loan — fill out an application with a free credit rating check.
Offers: 7
Updated
04.04.2024
17:12
Best Quick Loan Today 24.04.2024*
Mr. Payday
Need a Quick Loan Now?
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
up to $10.000
Cash Money
Payday Loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
50$ - 1500$
Rate
i

Effective interest rate on the product

up to 391%
Term
i

Loan term for the financial product

1 - 62 days
GoDay
Payday Loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
$100-$1,500
Rate
i

Effective interest rate on the product

up to 495.36%
Term
i

Loan term for the financial product

up to 62 days
Get Your FREE Quote Today!
Get Your FREE Quote Today!

Take advantage of our loan selection system with a free credit check!

24Cash
Payday Loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
$50-$500
Rate
i

Effective interest rate on the product

up to 26%
Term
i

Loan term for the financial product

up to 120 days
Cash 4 You
Payday Loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
$120-$1,500
Rate
i

Effective interest rate on the product

up to 391.07%
Term
i

Loan term for the financial product

up to 14 days
Loan Express
Payday Loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
$100-$1,500
Rate
i

Effective interest rate on the product

up to 517.08%
Term
i

Loan term for the financial product

up to 62 days
Speedy Cash
Payday Loan
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
$200-$1,500
Rate
i

Effective interest rate on the product

up to 599.64%
Term
i

Loan term for the financial product

up to 14 days
Reviews
Royal Bank of Canada
4.6
I appreciate the transparency in the loan terms provided by Royal Bank of Canada, with no hidden fees or charges.
Review
Royal Bank of Canada
4.4
RBC provided me with a flexible loan repayment schedule, making it easier to manage.
Review
Royal Bank of Canada
2.4
I encountered some hidden fees when repaying the loan with RBC, making it more expensive than I expected.
Review
Royal Bank of Canada
2
Unfortunately, the loan terms offered to me by RBC turned out to be less favorable than those of other banks.
Review
Royal Bank of Canada
4.2
It's very convenient to use RBC's online services to manage my loan and make monthly payments.
Review
Royal Bank of Canada
4.2
I obtained my home loan with RBC, and they were very flexible in setting terms that suited my financial capabilities.
Review

A small personal loan for bad credit is a financial option designed to assist individuals with less-than-ideal credit histories. These loans cater specifically to those who may have poor credit scores, making it challenging to qualify for traditional loans. Bad credit loans come in smaller amounts and are generally unsecured, meaning they don't require collateral. They provide an opportunity for individuals with bad credit to access funds for various purposes, such as debt consolidation, unexpected expenses, or emergencies. These loans often have higher interest rates compared to loans for individuals with better credit scores, reflecting the increased risk for the lenders.

Features

  1. Unsecured Nature. Small personal loans for bad credit in Canada are typically unsecured, meaning borrowers are not required to provide collateral to secure the loan. This reduces the risk for the borrower but often results in higher interest rates.

  2. Higher Interest Rates. Due to the elevated risk associated with lending to individuals with bad credit, these loans often come with higher interest rates compared to traditional loans. Borrowers should be aware of the cost implications and carefully assess the terms.

  3. Flexible Repayment Options. Lenders offering small personal loans for bad credit may provide flexible repayment options to accommodate the financial situations of borrowers. This can include longer repayment periods or installment plans to make it more manageable for individuals with poor credit.

  4. Guaranteed Approval. Some lenders may advertise guaranteed approval for bad credit loans, providing individuals with a less-than-stellar credit history the opportunity to secure funds. However, it's crucial to scrutinize such claims and carefully review the terms and conditions.

  5. Smaller Loan Amounts. As the name suggests, these loans are typically for smaller amounts. Lenders may have a cap on the maximum loan amount for bad credit loans, making them suitable for addressing immediate financial needs or emergencies.

  6. Quick Approval and Disbursement. Online lenders specializing in bad credit loans often streamline the application and approval process. Borrowers may receive quick decisions, and once approved, funds can be disbursed promptly, helping individuals address urgent financial situations.

Pros and cons

Pros

Accessibility. Small personal loans for bad credit in Canada provide individuals with poor credit histories the opportunity to access funds. Traditional lenders may be more restrictive, making these specialized loans a viable option for those facing financial challenges.

Quick Approval. Many lenders offering bad credit loans streamline the application and approval process. This quick turnaround is beneficial for individuals facing urgent financial needs or emergencies, providing a faster solution compared to traditional lending channels.

Flexible Repayment Options. Some lenders offer flexible repayment plans for bad credit loans. This can include extended repayment periods or installment plans, making it easier for borrowers to manage their financial commitments within their budget constraints.

Cons

Higher Interest Rates. One significant drawback of small personal loans for bad credit is the higher interest rates attached to these loans. Lenders impose higher rates to mitigate the increased risk associated with lending to individuals with poor credit histories, potentially making the overall cost of borrowing more expensive.

Smaller Loan Amounts. Bad credit loans often come with limitations on the maximum loan amount. Borrowers may find that the funds available are not sufficient for larger expenses or financial goals, limiting the scope of what can be achieved with these loans.

Risk of Predatory Lenders. Individuals seeking bad credit loans should be cautious of predatory lenders or payday loan companies that may take advantage of vulnerable financial situations. It's essential to carefully review the terms, fees, and conditions to avoid falling into debt traps.

Limited Options for Improvement. While successfully repaying a bad credit loan can positively impact low credit scores, the improvement might be gradual. Borrowers may still face challenges in obtaining more favorable terms on future loans until their credit history demonstrates significant improvement.

How to get a small personal loan for bad credit

Apply for a Loan

  1. Check Your Credit Report. Obtain a copy of your credit report to understand your current credit situation. Reviewing your credit report allows you to identify any errors or discrepancies that might be affecting your credit score negatively.

  2. Research Lenders Specializing in Bad Credit Loans. Look for lenders in Canada that specialize in providing small personal loans for bad credit. Online lenders, credit unions, and certain financial institutions may be more willing to work with individuals with poor credit histories.

  3. Gather Necessary Documentation. Prepare the required documents such as proof of income, bank statements, and any other documents the lender may request. Having all the necessary paperwork ready can expedite the application process and increase your chances of approval.

  4. Consider Secured and Unsecured Options. Understand the difference between secured and unsecured loans. Secured loans require collateral, which might be an asset like a car or property, while unsecured loans do not. Secured loans may offer better terms but involve the risk of losing the collateral if you fail to repay.

  5. Apply and Compare Offers. Submit loan applications to multiple lenders but be mindful not to apply to too many at once, as excessive credit inquiries can negatively impact your credit score. Compare the offers, including interest rates, repayment terms, and any associated fees. Choose the option that best aligns with your financial needs and capabilities.

Requirements and conditions

Conditions

  1. Interest Rates. Interest rates for bad credit loans are generally higher compared to loans for individuals with good credit. Lenders charge higher rates to compensate for the increased risk.

  2. Loan Amounts. Small personal loans for bad credit usually come with lower maximum loan amounts. These loans are designed to address immediate financial needs or emergencies rather than large expenses.

  3. Repayment Terms. Lenders may offer flexible repayment terms for bad credit loans. This can include extended repayment periods or installment plans to accommodate the borrower's financial situation.

  4. Fees and Charges. Borrowers should be aware of any fees associated with the loan, such as origination fees or administrative charges. These fees can impact the overall cost of the loan, so it's essential to factor them into the decision-making process.

  5. Application Process. The application process for bad credit loans is usually streamlined, with many online lenders offering quick and convenient applications. Some lenders may also provide instant bank verification to expedite the approval process.

Requirements

  1. Credit Score. Lenders offering small personal loans for bad credit in Canada typically consider individuals with credit scores below the average range. The specific minimum credit score required may vary among lenders, but these loans are designed to accommodate those with less-than-ideal credit histories.

  2. Proof of Income. Borrowers are usually required to provide proof of a stable income to demonstrate their ability to repay the loan. This can include recent pay stubs, employment verification, or other documentation showing a consistent source of income.

  3. Canadian Residency. Applicants for small personal loans in Canada are generally required to be residents of the country. Lenders may ask for proof of Canadian residency, such as a driver's license or utility bills in the applicant's name.

  4. Bank Account. Having an active bank account is often a requirement for small personal loans. This allows for the deposit of loan funds and facilitates the repayment process through automatic withdrawals.

  5. Age Requirement. Borrowers typically need to be of legal age, which is 18 or 19 years old depending on the province or territory. Lenders may request identification, such as a driver's license, to verify the applicant's age.

  6. Employment History. Lenders may consider an applicant's employment history as part of the approval process. While some lenders may accept individuals with varying employment statuses, stability in employment can positively impact the application.

  7. Debt-to-Income Ratio. Lenders may assess the applicant's debt-to-income ratio to ensure that the borrower has the capacity to take on additional debt. A lower debt-to-income ratio can enhance the likelihood of loan approval.

  8. Canadian Citizenship or Permanent Residency. While some lenders may work with non-citizens, many small personal loan providers may require Canadian citizenship or permanent residency status.

Best places to get a small personal loan for bad credit

  • easyfinancial is known for providing online loans to individuals with less-than-perfect credit. They offer both secured and unsecured online bad credit loans. The application process is often streamlined, and they may consider various factors beyond credit scores.

  • GoDay is an online lender that specializes in providing payday and installment loan products. They may consider individuals with bad credit but typically offer smaller loan amounts designed to address short-term financial needs.

  • iCash is an online direct lender that offers short-term loans to individuals with varying credit histories. They may provide quick approval and disbursement of funds, catering to those in need of immediate financial assistance.

  • Money Mart is a financial services company that offers a range of products, including payday loans and installment loans. They may consider individuals with bad credit, but borrowers should be cautious of the associated interest rates.

Ways to receive the money

  1. Direct Deposit. Direct deposit is a widely used method where personal loan lenders transfer the approved loan amount directly into the borrower's bank account.

  2. Interac e-Transfer. Some lenders may use Interac e-Transfer, which allows them to send money quickly and securely to the borrower's email address.

  3. Cheque or Money Order. In some cases, lenders may issue a cheque or money order for the unsecured loan amount and mail it to the borrower's registered address.

  4. Prepaid Debit Card. Certain lenders may offer the option of loading the approved loan amount onto a prepaid debit card.

Things to pay attention to

  1. Interest Rates. Pay close attention to the interest rates on bad credit personal loans in Canada. Given the higher risk, rates may be elevated. Compare options to find the most favorable terms.

  2. Loan Types - Unsecured vs. Secured. Understand the difference between unsecured and secured loans. An unsecured personal loan doesn't require collateral, while a secured loan does. Be aware of the implications for each type.

  3. Repayment Terms and Monthly Payments. Examine the repayment terms and monthly payment amounts. Ensure they align with your budget and financial capabilities to avoid any potential challenges in meeting repayment obligations.

  4. Credit Score Impact. Be aware of how taking out an unsecured bad credit loan may impact your poor credit score. Timely payments can positively influence your score, but missed payments or defaults may further lower your credit rating.

  5. Lender Credibility. Check the credibility of the lender offering small loans for bad credit. Look for reputable bad credit lenders, read reviews, and be cautious of predatory practices.

  6. Alternative Options to Payday Loans. Avoid payday loans due to their high-interest rates and potential debt traps. Explore alternative options like bad credit personal loans with more reasonable terms and conditions.

How to repay a small personal loan for bad credit?

  1. Review Loan Agreement. Carefully review the loan agreement to understand the terms, including the repayment schedule, interest rates, and any fees associated with the bad credit personal loan.

  2. Set Up Automatic Payments. If possible, set up automatic payments from your bank account to ensure timely repayment. This helps avoid missed payments and potential negative impacts on your credit score.

  3. Monitor Monthly Income. Regularly monitor your monthly income to ensure you have sufficient funds to cover the loan payments. Consider creating a budget to manage your finances effectively.

  4. Prioritize Loan Payments. Timely repayment is crucial for maintaining or improving your credit score. If facing financial challenges, communicate with the lender to explore possible solutions.

  5. Consider Early Repayment. If your financial situation improves, consider early repayment to reduce the overall interest paid on the loan. Check the loan agreement for any prepayment penalties or fees before making early payments.

Reasons for getting rejected for a small personal loan for bad credit

  1. Low Credit Score. One of the primary reasons for rejection is a low credit score. Lenders offering small personal loans for bad credit may still have minimum credit score requirements, and falling below this threshold can result in rejection.

  2. High Debt-to-Income Ratio. A high debt-to-income ratio, where your existing debts are significant compared to your income, can be a red flag for lenders. They may worry about your ability to manage additional debt, leading to rejection.

  3. Recent Credit Inquiries. Multiple recent credit inquiries can signal financial instability to lenders. It may indicate a high demand for credit or financial distress, potentially leading to rejection for a new loan.

  4. Unstable Employment History. Lenders may reject a loan application if the borrower has a history of unstable employment or frequent job changes. A stable income source is crucial for loan approval.

  5. Insufficient Income. If your income is below the lender's minimum requirements for the desired loan amount, it can lead to rejection. Lenders assess income to ensure you have the means to repay the loan.

  6. Recent Bankruptcy or Default. Recent bankruptcies, foreclosures, or defaults on previous loans can significantly impact your creditworthiness. Lenders may be hesitant to approve a new loan in the aftermath of such financial challenges.

Alternatives

  1. Secured Bad Credit Loan. Consider applying for a secured bad credit loan where collateral, such as a car or property, backs the loan. Secured loans may provide better terms than unsecured options.

  2. Cash Advance Apps. Use cash advance apps responsibly for short-term financial needs. Some credit unions or online lenders may offer similar services with more reasonable fees and interest rates.

  3. No Credit Check Loans. Look into installment loans from online lenders that specialize in providing loans without conducting a hard credit check. While interest rates may still be higher, they could offer more flexibility than traditional payday loans.

  4. Debt Consolidation Loan. Explore debt consolidation loans as a way to combine multiple debts into a single, more manageable payment. Look for lenders offering reasonable interest rates and terms.

Editorial opinion

In the Canadian financial landscape, securing unsecured personal loans or secured loans for individuals with lower credit scores can be crucial. These credit options, often utilized to manage credit card debt or borrow money in case of emergency, come with their own set of considerations. Exploring online lenders offering small loans for bad credit, understanding the impact on credit scores, and navigating interest rates are essential steps. While options like payday lenders exist, individuals should exercise caution and opt for lenders that provide bad credit loans responsibly, ensuring transparent credit checks and fair terms. Navigating the nuanced world of small loans for bad credit in Canada requires borrowers to consider their credit score, interest rates, and the reputation of private lenders or direct lenders, ultimately making informed decisions tailored to their financial well-being.

Important

Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

How to Choose a Lender

  1. Make sure to confirm whether the lender is licensed to operate in your province. You can verify this information with your state regulator or attorney general.

  2. Check if the lender is a member of a reputable association, such as the Canadian Lenders Association (CLA). Membership in such organizations may provide an extra level of reliability.

  3. Carefully review all the terms and conditions of your payday loan contract.

  4. Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.

  5. Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.

  6. Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.

Methodology

At Finanso, we've carried out a comprehensive analysis of over 70 lenders, assessing them based on 35 different parameters across six key categories: accessibility of loans, customer relations, quality of service, interest rates, and transparency of conditions.

In each category, we carefully considered the most critical factors in selecting a lender. These factors include the interest rates, available loan amounts, minimum credit score, minimum income, application fees, and the speed at which funds are transferred.

At Finanso, we highly value our users, which is why we also focus on the quality of customer service, user reviews, and additional features that can aid our users in making a well-informed decision.

Our ultimate goal is to provide insightful recommendations and expert advice to assist you in selecting a lender that best caters to your specific needs.

FAQ

What is the easiest loan to get with bad credit?

The easiest forms of bad credit loans in Canada are payday loans or cash advances. These loans typically have minimal credit check requirements, making them more accessible to individuals with poor credit. However, it's crucial to be cautious, as payday loans often come with high-interest rates and short repayment periods, potentially leading to a cycle of debt.

Can you get a small loan with a 500 credit score?

Yes, it is possible to get a small loan with a 500 credit score, but options may be limited. Lenders offering loans to individuals with lower credit scores may charge higher interest rates, and terms may be less favorable. Exploring alternatives like credit unions, online lenders specializing in unsecured bad credit loans, or secured loans could provide potential options for those with a 500 credit score.

What is the lowest credit score to get a personal loan?

The lowest credit score to get a personal loan varies by lender, but generally, a score of 600 or below may be considered low. Individuals with lower credit scores may still be eligible for loans, but they might face higher interest rates and less favorable terms. Exploring lenders specializing in bad credit loans or considering secured options could provide more accessible alternatives for those with lower credit scores.

What credit score do I need for a $5,000 loan?

For a $5,000 loan, a credit score of around 600 or higher is generally preferred by traditional lenders. However, some lenders, particularly those specializing in bad credit loans, may consider borrowers with lower credit scores. Keep in mind that lower credit scores may result in higher interest rates and less favorable terms. Exploring various lenders and loan options can help individuals find the most suitable terms for their specific credit situation.

Are there alternatives to payday lenders for small loans with bad credit?

Yes, several alternatives exist, such as credit unions, online lenders offering installment loans, or exploring debt consolidation options. These alternatives often provide more reasonable terms and may help individuals with bad credit manage their financial needs without falling into the high-interest payday loan cycle.

Loan Terms