If you’re in search of $2,500 installment loans for bad credit in Canada, you may wish to consider online loan search platforms or direct lenders. You can apply quickly and easily and use the funds to finance a major purchase or cover emergency expenses.
Installment loans are a type of personal loan offered by online direct lenders. They share these key features:
Banks and credit unions in Canada offer personal loans with loan amounts that typically start at $3,000 to $5,000, and usually only to good or excellent credit borrowers. If there is a bank or credit union you’re interested in, check the minimum credit score requirement and loan amount available before you apply.
You might have more luck if you apply to a local credit union. Vancity in BC, for example, can offer small loans starting at $100.
Online lenders are the primary source of installment loans for bad credit. To help you find the best bad credit installment loan to suit your needs, follow these steps:
There are several direct lenders offering online installment loans in Canada. Of course whenever you enter the online lending space, you’ll want to be careful that you’re working with a legitimate lender. To help you out, we’ve curated a list of reputable online installment loan lenders in the table above, which includes some loan broker platforms. Here is a sample list of installment loan providers who are direct lenders:
When you’re searching for a bad credit installment loan in Canada, ask yourself these questions to compare lenders:
While searching for $2,500 personal loans, you’ll see lenders using the terms “interest rate” and/or “APR,” which stands for annual percentage rate. Zero in on the APR, which will show you the true cost of your loan, because it includes the interest rate plus other fees you need to pay. Sometimes a loan doesn’t have other fees. In this case, the APR is the same as the annual interest rate. Compare personal loan rates in Canada.
You’ll need to figure out how long you want to take your loan out for and find lenders that can accommodate your needs. Ultimately, a longer loan term will make your monthly payments cheaper, but you’ll end up paying far more interest over the life of the $2,500 loan, especially if the interest rate you’ve secured is high because of bad credit. A shorter term will have higher monthly payments but will cost you less.
Online lenders have varying eligibility requirements, so you’ll need to make sure you’re applying for installment loans you fit the criteria for. Check if the lender has a minimum credit score requirement or a minimum monthly income to qualify before proceeding with your application. Keep in mind, some lenders won’t have these eligibility requirements and will judge applications on a case-by-case basis.
Consider any extra fees like admin fees (fee to process your loan), late payment fees, NSF fees and any other charges.
Look for a lender that offers flexible terms, including early repayment without penalties and the option to rearrange your due date if needed.
Make sure the lender you apply with can get your loan amount to you when you need it. You can get a bad credit installment loan as soon as the same day if you apply online. Learn more about emergency loans.
The monthly payment and cost of a $2,500 personal loan will vary greatly, depending on the interest rate you secure, how long you may take to repay the loan and if there are any additional fees you need to account for.
Here’s an example of how much a $2,500 installment loan may be, with different APRs and loan terms at play.
| 12.99% | 19.99% | 29.99% | |
|---|---|---|---|
| Monthly payment | $432.59 | $441.29 | $453.86 |
| Total interest paid | $95.57 | $147.77 | $223.17 |
| Total cost | $2,595.57 | $2,647.77 | $2,723.17 |
| 12.99% | 19.99% | 29.99% | |
|---|---|---|---|
| Monthly payment | $84.22 | $92.90 | $106.12 |
| Total interest paid | $532.02 | $844.26 | $1,320.15 |
| Total cost | $3,032.02 | $3,344.26 | $3,820.15 |
As you can see, you’ll pay less overall if you get the shortest loan term and lowest APR. How long it takes you to repay the loan matters. A $2,500 loan with a loan term of 6 months and a higher APR of 19.99% or 29.99% will cost less than a $2,500 loan with a loan term of 3 years and a lower APR of 12.99%.
Once you have an idea of the APR you’re eligible for, aim for the shortest loan term possible with monthly payments you can still manage.
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You’ll usually need to meet the following criteria to qualify for an installment loan:
Most lenders will require a credit check if you want to take out a $2,500 personal loan. Lenders who don’t do credit checks will shift their focus on your ability to make repayments. You can show that you have a steady, recurring income by providing bank statements from recent months or Notice of Assessments from your last few tax returns.
Many lenders who don’t require credit checks often cater specifically to people with poor credit. Be aware that these lenders typically offset the increased risk of lending to bad credit borrowers by charging higher rates and fees.
Some lenders offset risk by requiring collateral, which means you could end up losing assets if you default on your loan. An example is a car title loan. Before getting funding, make sure you fully understand the terms of your loan and are comfortable with your ability to repay.
Dive deeper: No credit check loans in Canada
Installment loans are a worthwhile option if you’re looking for a smaller financing amounts, like a $2,500 loan, to pay one-off expenses. Overall, however, they usually come with higher interest rates, smaller loan amounts and shorter terms than traditional personal loans.
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