Personal Finance

Loans for bad credit - what interest rates can one expect?

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  • Jun 11th, 2021 10:18 am
[OP]
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Oct 28, 2018
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Loans for bad credit - what interest rates can one expect?

So, I'm working on my credit score. I had a bit of a bad bout a while back thanks to the perfect storm of Covid and an onslaught of unexpected expenses. Don't need a lecture on how I got here - I did the best I could and I'm working on it.

I'm wondering if there are any loan products where I might see interest under 15-20% APR or is that completely unreasonable if your credit score is fluctuating in the low 600s? Looking to consolidate a higher interest rate credit card so more of my payment goes to the principle. I did manage to negotiate a 3 month lower rate, but that's now ended.
16 replies
Member
Nov 12, 2009
292 posts
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You can try with gopeer.ca

It is a peer-to-peer lending platform.

Thanks,
Holdyerhorses wrote: So, I'm working on my credit score. I had a bit of a bad bout a while back thanks to the perfect storm of Covid and an onslaught of unexpected expenses. Don't need a lecture on how I got here - I did the best I could and I'm working on it.

I'm wondering if there are any loan products where I might see interest under 15-20% APR or is that completely unreasonable if your credit score is fluctuating in the low 600s? Looking to consolidate a higher interest rate credit card so more of my payment goes to the principle. I did manage to negotiate a 3 month lower rate, but that's now ended.
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Jan 27, 2004
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Holdyerhorses wrote: So, I'm working on my credit score. I had a bit of a bad bout a while back thanks to the perfect storm of Covid and an onslaught of unexpected expenses. Don't need a lecture on how I got here - I did the best I could and I'm working on it.

I'm wondering if there are any loan products where I might see interest under 15-20% APR or is that completely unreasonable if your credit score is fluctuating in the low 600s? Looking to consolidate a higher interest rate credit card so more of my payment goes to the principle. I did manage to negotiate a 3 month lower rate, but that's now ended.
Exactly which institutions do you hold these credit cards with? This is important, so if you share i can help guide you.
Most banks & credit unions of low interest rate versions of their credit cards. In most cases You can switch over to these low interest versions with no credit check or application needed. Because its the same account & just a product type switch.
For example if you have a no fee bmo air miles mc @ 19.99% interest rate... you can pay a $20 annual fee and switch to the preferred rate mc with 12.9% interest rate.

I have a Desjardins Visa thats 19.99% interest. I don’t use it. But as a backup, i switched to their no fee flexiti card with 10.99% interest, which isn’t good... but for a dire circumstance, its nice to have.

Other option is to seek the bank where you hold that credit card and see if they can do a consolidation loan. They probably won’t want to consolidate your outside credit cards. (The exception is if you have a good credit score, good income, or some assets).
But they will consider consolidating the credit card debt you hold with them on the condition you close the credit card account, or reduce the limit to $1000 or less.
[OP]
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Oct 28, 2018
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UrbanPoet wrote: Exactly which institutions do you hold these credit cards with? This is important, so if you share i can help guide you.

But they will consider consolidating the credit card debt you hold with them on the condition you close the credit card account, or reduce the limit to $1000 or less.
It's my Canadian Tire MC that I'm trying to pay off. Interest rate is very high and it doesn't appear they have a lower interest version of it. Also cannot approach them to consolidate because, well, they don't have loan products that I'm aware of.
[OP]
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Oct 28, 2018
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youtube101 wrote: You can try with gopeer.ca
Any idea what their interest rate would be without going through an application and having a hard credit pull? Trying to avoid anything that will ding my score if at all possible.
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Holdyerhorses wrote: It's my Canadian Tire MC that I'm trying to pay off. Interest rate is very high and it doesn't appear they have a lower interest version of it. Also cannot approach them to consolidate because, well, they don't have loan products that I'm aware of.
Do you have credit cards with any financial institutions? Like an actual bank or credit union?
If so, which ones?
[OP]
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Oct 28, 2018
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UrbanPoet wrote: Do you have credit cards with any financial institutions? Like an actual bank or credit union?
If so, which ones?
I have my CTFS card and an MBNA card.
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Holdyerhorses wrote: I have my CTFS card and an MBNA card.
Ok... So it sounds like you got all cards from companies that typically only grant to people with bad credit.

If you get lucky... MBNA might offer you a low interest balance transfer promotion. They usually do that when the account has a $0 balance.
Where do you bank? Hopefully somewhere that offers a low interest rate credit card...
You can try applying for a unsecured loan with the bank you do your banking with. They might give you a loan based on your relationship with them. BUt @ the end of the day its based on credit score and credit worthiness. So hopefully during those bad times you were at least making your minimum payments on time.
If the loan fails, you can try applying with a low interest rate credit card with them. They sometimes give a little bit of leaway to customers who bank with them. So that is why i suggested going with the bank you bank with.

LAst ditch effort... Try Desjardin Flexiti Visa. It has a 10.9% interest rate.
However they have a minimum payment that is 5% of the total balance owing. So it can be a big amount for a minimum payment (depending on hte balance owed), but its good that it will help you pay it off faster.
[OP]
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Oct 28, 2018
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UrbanPoet wrote: Ok... So it sounds like you got all cards from companies that typically only grant to people with bad credit.
Well, that might be the case, but I didn't have bad credit when I got the cards - I applied for those particular two because of the perks. :) I've had them for several years.
UrbanPoet wrote: If you get lucky... MBNA might offer you a low interest balance transfer promotion. They usually do that when the account has a $0 balance.
That's exactly why I got the card ;) Waiting on their next balance transfer offer - I have been told that I have to wait for it. Thinking the pandemic might have them not keen to offer something like this right now.
UrbanPoet wrote: Where do you bank? Hopefully somewhere that offers a low interest rate credit card...
You can try applying for a unsecured loan with the bank you do your banking with. They might give you a loan based on your relationship with them. BUt @ the end of the day its based on credit score and credit worthiness. So hopefully during those bad times you were at least making your minimum payments on time.
If the loan fails, you can try applying with a low interest rate credit card with them. They sometimes give a little bit of leaway to customers who bank with them. So that is why i suggested going with the bank you bank with.
I'm with Tangerine - they wouldn't even give me a mortgage, which I qualified for easily with another financial institution when I had good credit. Apparently it's hard to get any sort of financing with them. I bank with them because it's free. [/quote]
UrbanPoet wrote: LAst ditch effort... Try Desjardin Flexiti Visa. It has a 10.9% interest rate.
However they have a minimum payment that is 5% of the total balance owing. So it can be a big amount for a minimum payment (depending on hte balance owed), but its good that it will help you pay it off faster.
Thanks, I think I'll just keep doing what I'm doing for a bit longer. My score will rebound eventually. I suppose patience is the name of the game for me right now. Admittedly not my strong suit. ;)
I appreciate you taking the time to reply.
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May 4, 2017
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MBNA has something called the True Line Mastercard - supposed to be 12.99%, $0 annual fee - you might look to see if you can switch to it.
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wolfie55 wrote: MBNA has something called the True Line Mastercard - supposed to be 12.99%, $0 annual fee - you might look to see if you can switch to it.
I remember asking mbna if they can do switches... they said no. It has to be an all new application. I thought that was kinda weird... but maybe they do!
Jr. Member
Feb 8, 2020
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Even I'm in need of a quick loan. Say 3000 for personal reasons. I bank with RBC and simplii. Do you think I should go for a line of credit or mbna balance transfer?

I don't have a long credit history but no debts and score is in 720s.
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Do you have any crypto? I've been taking small loans backed by crypto collateral and the rates are really good.
[OP]
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Oct 28, 2018
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UrbanPoet wrote: I remember asking mbna if they can do switches... they said no. It has to be an all new application. I thought that was kinda weird... but maybe they do!
They do switches. I did one - it was very easy :)
[OP]
Newbie
Oct 28, 2018
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wolfie55 wrote: MBNA has something called the True Line Mastercard - supposed to be 12.99%, $0 annual fee - you might look to see if you can switch to it.
I actually have that card - at a better rate. Waiting for a good balance transfer offer. I think the pandemic has put a hold on them.
[OP]
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Oct 28, 2018
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djdestroyer wrote: Do you have any crypto? I've been taking small loans backed by crypto collateral and the rates are really good.
No, I don't. That's very interesting though.
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Jan 27, 2004
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Holdyerhorses wrote: They do switches. I did one - it was very easy :)
Holdyerhorses wrote: I actually have that card - at a better rate. Waiting for a good balance transfer offer. I think the pandemic has put a hold on them.
Ok so i guess your situation isnt all that dire.
Theres also mbna trueline gold @ 8.99% interest rate

But $39.99/yr fee.

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