Loan Articles


Despite the recent push towards economic recovery and financial stabilization, primary lenders in the USA and Canada still grudge at approving long term personal loans to individuals with good credit scores, let alone to people with not so perfect ones. Still, with a little bit of luck and a lot of perseverance, you can still find some long term bad credit loans with reasonable terms and conditions, provided that you have a stable monthly income that you can verify. There are finance companies, banks and credit unions in Canada that have specialized in working with individuals with imperfect credit scores, which may agree to give you the long term personal loan that you need. Here are five simple tips that will increase your chances of having your long term personal loan application approved.

While people with good credit scores may file applications for long term personal loans online, individuals with not so good credit records are strongly advised to visit the nearest representational office of their bank or credit union and explain their situation to the loan officer. Credit unions are more cooperative than banks,
when it comes to giving out bad credit loans. In addition, the reasons why your credit score is tarnished matter, and that is why direct communication is important. For example, if you recently went through a costly and nerve-breaking divorce, the lender may be more understanding. Despite that, you will have to provide supporting documentation which proves that your income is sufficient and your employment situation is stable. This will show to the lender that regardless of your poor credit, you can pay off the loan installments on time.

Naturally, the long term loan will come with a higher interest rate as it is an unsecured one. Your bank assumes higher risk because the loan is not supported with collateral. Even in this case, you may want to negotiate the applicable rate with the lender.

If you fail to get a long term personal loan with a bank or a credit union, you can then file an online application with the numerous sub-prime lenders operating on the Canadian credit market. Although these financing institutions are notorious for their high interest rates and underlying charges and fees, some of them may agree to give you a personal loan in spite of your bad credit score under some reasonable conditions.

You may be able to refinance with a primary lender, provided that you pay off your due installments on time and in full for a year or two. Such a move can save you heaps of cash on interest rates in the long run. Moreover, the lender may be willing to offer better terms and conditions if you pay your loan on time.

Last but not least, you may be able to obtain a long term personal loan directly from your employer against a small interest, although this practice isnít very popular in Canada. Still, this last option seems the most agreeable one and therefore, it should be taken into consideration. The longer you have worked for the company, the bigger chances you stand to get approved for a long term personal loan with your employer. Certain problems may show up, if you decide to change jobs before you have paid off your loan.