Vacation Loans with Bad Credit in Canada

Vacation and holiday loans are offered by many financial institutions in Canada and come in different varieties. Unsecured and secured loans are available, based on factors such as the amount required, income, credit score, and others. Many providers offer loans to cover travel expenses such as leisure, food, hotel stays, flights, and more. Whether you are planning a short trip, your honeymoon, or a family vacation, there are different options to look into.

Secured Loans

This is an option for persons with fair and bad credit who are considered high risk by banks and other providers. Applicants are asked to provide collateral such as а vehicle or another valuable asset. The main benefit for customers is the lower interest rate compared to unsecured loans. A short-term vacation loan is a second option to consider provided that you are not going through credit counseling, bankruptcy or consumer proposal and are a permanent resident. Applicants qualify provided that they have been with their current employer for a period of at least 3 months. Only persons who receive pensions or are employed qualify for a loan: https://www.lifeoncredit.ca/bad-credit-personal-loans-in-canada/

Customers are asked to provide a provincial ID and proof of income. They must have an active bank account as well. Loans vary in amount, with some providers offering up to $7,000. The repayment period can be as long as 60 months but again, this depends on the financial institution.

There are lenders that specialize in vacation loans with bad credit and advertise up to 98 percent approval rate. They usually require collateral in the form of a home, mobile home, or vehicle. If you offer your home as collateral, providers require insurance. If it is a mobile home, then it must be insured and paid off in full. Applicants must show proof that they have no outstanding loans. The same goes for vehicles. Only cars that are up to 8 years are accepted. Other assets you can offer as collateral include land and trailers. Basically the loan is based on the asset you offer as collateral and not on your credit score. Depending on the asset offered, the amount can vary and can be as high as $15,000. Once you get approved, the approval will include important details such as the terms, schedule, monthly payments, amount, etc.

Another option is to apply for a secured personal loan and use the money to cover travel expenses. Big and small banks in Canada offer personal loans and advertise no prepayment penalties, flexible repayment schedules, and fixed rates. Some providers feature secured loans of up to $30,000 with a term of up to 60 months and affordable payments. With other providers the term is shorter (up to 35 weeks).

Other Options

Besides secured financing, there are other options to finance your trip or vacation, including credit cards and personal lines of credit. You may want to apply for a rewards card that features welcome bonuses and airmiles points. Toronto-Dominion, for example, features a travel Visa card that goes with rewards points. Points can be used toward accommodation, flights, and travel purchases. When applying for a travel card, there are some requirements to meet, for example, a household income of $100,000 or personal income of at least $60,000. For some applicants it is hard to meet the income requirement. A line of credit is a second option to secure financing for your vacation. The main benefit is that borrowers are free to draw on the line multiple times. The downside is that an unsecured line of credit is more difficult to qualify for with bad credit.