Get Personal Loans for People with Poor or No Credit A loan for people with bad credit is a loan designed for borrowers with no or limited credit histories. This is a good option for the self-employed, those with defaults, arrears, and bankruptcies, and borrowers who were refused a loan elsewhere. In Canada, borrowers with poor credit can choose from different types of loans, including unsecured personal loans, secured loans, and car loans for bad credit. Unsecured loans are offered to individuals with poor credit histories, but they are some of the riskiest for financial institutions. In most cases, banks and financial companies offer unsecured personal loans with unfavourable terms and high rates of interest. Borrowers who have some asset or real estate to offer as collateral can apply for a secured loan. Secured loans are easier to find and qualify for because the lender can seize the property offered as collateral in case the borrower is unable to make payments. In general, this type of financing is associated with refinancing and mortgages. There are two other options for borrowers with poor credit histories – loans for bad credit and secured credit cards. Car loans are one option for borrowers, but this is not a cheap way to borrow. Loans of this type have fees and stipulations attached to them and come with very high interest rates. Calculating the payments and interest rate on a car loan can be a daunting task even for borrowers with perfect credit. Borrowers with less-than-perfect credit scores can expect an interest rate of 9 to 21 percent. An interest rate of about 20 percent means paying very little toward the principal balance while the vehicle depreciates. Car loans for bad credit usually have high down payment requirements as well. The down payment amount depends on the price of the vehicle. Debt-to-income ratios are also an important factor. Borrowers who make payments on time and have a low debt load are viewed as trustworthy and creditworthy clients. When dealing with borrowers with poor credit, however, financial institutions set stipulations and limits on the loan as to protect their interest in the collateral. The percentage of down payment required also depends on the limit set on the loan. All loans for poor credit share in common the fact that borrowers are likely to pay a very high interest rate. Moreover, their options for borrowing from traditional sources (credit unions and mainstream banks) are limited. Borrowers who have a longstanding relationship with a bank or a local credit union may want to check with them first. In most cases, it is better to take out a secured loan because the interest rate will be much lower. It can be a forth or a half of the interest rate on unsecured loans. Finally, borrowers should inquire about the total amount to be repaid, the monthly payment requirements, the interest rate, and any fees and charges that come with the loan. Some financial institutions assess heavy late payment fees and other charges. Applying for a credit card for bad credit or a department store credit card is another option for people with poor credit. Two types of credit cards are offered to borrowers with a compromised credit score – secured cards and prepaid cards. Such credit cards are available to borrowers with no credit as well. Secured credit cards usually have lower limits and less attractive interest rates, but they give cardholders the opportunity to rebuild their credit history and qualify for better terms and interest rates in the future.