When you have bad credit, loans can be difficult to get. So what should you do if you really need money? Perhaps your credit cards are maxed out, your rent or mortgage payment is past due, and you need to pay your household bills.

There is help available in such circumstances, but the first thing you need to recognize is that with bad credit, personal loans will be expensive. That’s because in some situations people with bad credit do not fully pay off their debts. Therefore, high interest rates and upfront fees are the norm, so that if someone defaults on their payments, the lender has already received at least some of their money back.

Your Credit Rating

You should also recognize that getting a loan in such situations will not fix your credit history. It took time for your credit rating to fall, and it will take a lot longer for it to go up again. One loan won’t magically repair your rating, although time and managing your money responsibly will help your poor credit rating recover, eventually. Canada’s credit rating system does recognize that bad things happen to good people.

Online Lenders

There are a number of online lenders today that offer loans of up to $10,000. For example, Kingston, Ontario-based SkyCap Financial provides customers with loans when they have most likely been turned down by the bank. The company says it will carefully consider your current circumstances rather than just your past credit history. SkyCap Financial also offers a quick online application (less than five minutes) and promises a fast decision on your loan.

Be Prepared

When you apply for a loan, it’s best to be prepared with all your financial information. A lender will want to know your annual employment income and what you take home each month from all sources. Depending on whether the loan is secured or unsecured, they may also want to know if you have any assets you could offer as collateral. Be prepared to answer questions about your debts and your loan payment history.

Taking out a personal loan can help relieve your debt load and cover unexpected costs. But do some research before settling on a loan provider. Borrow only what you need and be sure to be prompt with your repayments.

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