bad credit

Summer is already here, and you probably wonder if it is a good idea to go on vacation if you are in debt. Well, this depends on how much you owe, your monthly payment amounts, and whether you plan a short trip to the countryside or a long summer vacation overseas. This also depends on your income and expenses, the number of family members, and other factors.

When Vacation Is Not an Option

In some cases, vacation is not an option, and you may want to think of other ways to have a good time. This is the case when you have:

High-interest debts
Multiple debts with large outstanding balances
Seasonal or part-time job
Unstable income

If you have to add more debt to go on vacation, then it may be better to change your summer plans and put off your trip. If you have paid vacation days, on the other hand, this is definitely a plus. In any case, if going on vacation is a source of stress and you are in a precarious financial situation, it may be better to put off your trip. There are other questions to ask yourself before you make a decision, and one is how quickly you want to get rid of your debts. If you want to repay your debts within a short period, then going on a short vacation or putting off your trip makes more sense. If you have a 25-year mortgage with affordable payments, you don’t have to wait for 25 years to go on vacation. If, on the other hand, you have a payday loan with a short term of 1 – 2 months and a very high interest rate, then it is best to pay it off first. If money is in short supply and you go on vacation, you may incur an extremely high interest rate. This will only make things worse.

Obviously, to go on vacation, you should save enough money for plane tickets, accommodation, travel, leisure activities, dining, car rentals, and anything else. By charging purchases on your card you will spend a lot on interest charges. Interest charges add up if you only pay the minimum and you will end up paying dearly. This is especially true if you hold a high-interest credit card, whether a specialty or standard card. At the same time, if you have a travel credit card, you may want to redeem your points for airfare and accommodation to save money. Many travel credit cards feature complimentary welcome bonuses, rewards points to redeem for travel expenses, affordable travel packages, discounts, room upgrades, and a lot more.

Budget Travel

Hostels

If your monthly payments are reasonable, travelling on a budget is one option to consider. If you don’t mind staying in hostels, this will save you a lot of money. Hostels are inexpensive compared to other accommodation options such as cottages, rental homes, resorts, family hotels, etc. What is more, you can choose from different types of hostels such as boutique or luxury hostels, eco and design hostels, party and surf hostels, and others. It all depends on your budget, preferences, and destination. Some hostels even offer free food such as BBQ, baked goods, instant coffee, milk, a choice of cereals, and a lot more. If you choose a hostel that offers free breakfast, you will save more. If breakfast is not offered, then you can have a big meal at lunch. Many budget restaurants offer lunch specials for cheap. Another idea is to shop at food courts, stores, and markets near closing time which is when you will find deeply discounted food items.

Check short-term rental homes as well. Some rental homes are quite affordable, especially those that are away from busy locations. Many short-term vacation homes have a fully equipped kitchen as well. Plus if you travel with a friend or companion, you can split the costs.

Camping

If you have camping gear or you can borrow from a friend or relative, this is also an option to consider. You may also buy used camping gear and equipment. You will need camping equipment and essentials such as:

Pillows
Sheets
Sleeping bags
Tent
Thrash bags
Aluminum foil
Campfire grill
Dish pan
Cutting board
Can opener
Folding table
Folding chairs

Don’t forget to bring your first aid kit with you. Pack things such as your sunscreen, bug repellant, bee sting kit, cotton swabs, roll bandages, splinting materials, antiseptic wipes, personal medications, and anything else you can think of.

Book in Advance to Save Money

Book air travel, bus travel, hostel or hotel accommodation, and train journeys well in advance. This will save you a lot of money. It is best to book at least 1 month in advance because prices tend to go up. Usually prices go up the closer you get to your departure date or trip. To save even more, you may want to consider going on vacation during low season and off-peak season when hotels and flights are cheaper compared to peak season.

Choose a Budget Destination

If you have outstanding balances, it is best to choose a budget destination such as India, Vietnam, Cambodia, Sri Lanka, or Honduras. Check low-cost airlines which serve major hubs and airports. The main benefit is obviously the low price of tickets. On the downside, low-cost carriers offer fewer amenities compared to standard airlines. Budget destinations such as Sri Lanka, Cambodia, and others have plenty to offer – affordable accommodation and food, breathtaking nature, beaches and palm trees, tea and coffee plantations, waterfalls, lakes, mountains, temples, and more. An air-conditioned room equipped with amenities, Wi-Fi, dining facilities, spa and a swimming pool can cost you as little as $50 – $60. In fact, some hotels feature rooms with a view of the garden or beach and a private hot tub and sauna for as little as $50, with superb breakfast included in the price. Other budget destinations include the Dominican Republic, Argentina, Greece, Bulgaria, and Hungary.

Opt for a Cruise Vacation

One alternative is to choose an inexpensive cruise. The price of a cruise usually includes different dining options for snacks, dinner, lunch, brunch, and breakfast, your stateroom, amenities, waterslides, pools, and evening shows. The price also includes room service, youth and kids’ programs, a fitness center, lounges, entertainment and live music. Non-alcoholic and alcoholic beverages are usually not included in the price and so are specialty restaurants, photos, shore excursions, and video games. The same goes for tips and service gratuities, laundry services, beauty salon services, and spa treatments. If you have children, check whether kids under the age of 18 sail free.

Saving Money While on Vacation

There are other ways to save money while on vacation to avoid overextending yourself and adding more debt. If you plan a vacation at home, you may want to shorten it. Why not pick a desired location to spend a few days with family, friends, and loved ones? Just choose an affordable location and make it a weekend-long trip to visit places of interest, attractions, and nature wonders. Choose a location nearby or within a 3 – 4-hour drive to save on gas. This way, you will also have more time for leisure and fun activities. Instead of doing local trips, you can visit friends or family to spend time with them. If they are willing to host you, you will save on accommodation as well.

Getting a loan after a personal financial crisis may seem like it’s impossible. If you have had to file bankruptcy or experienced a personal crisis that hit you hard financially, you probably feel like there’s nowhere in Canada to turn for a loan. The good news, though, is that you’re wrong! You actually have a multitude of options for bad credit loans in Canada.

How is it possible?

As you do your research on loans, you will find that there are plenty of available loans for people with bad credit. There are some lenders who are more willing than others to take a chance on bad credit personal loans. There are also different types of bad credit loans that reduce the risk for the lender, rendering them more willing to loan you the money you need.

You may be new to Canada and trying to make your way without an established credit history in this country. Or you may have gotten overwhelmed by a medical or other crisis that constricted your finances and caused your credit score to drop drastically. In either case, you might be desperately in need of funds to get you back on your feet—and all that at a time when it seems hardest to qualify for a loan.

That’s why bad credit personal loans are the answer for you. They are designed specifically for people in your situation, and some of them even have guaranteed acceptance. You may find that the interest rate is higher or the conditions different than they would be if you had better credit, but the fact remains that you can get a loan!

You will find that loans for bad credit come in many shapes and sizes. Here’s a basic break-down to help you navigate the confusing landscape of loans!

Secured Personal Loans

A secured loan is one that lets you offer an asset as collateral, essentially pledging that asset to the lender as assurance that you will pay back the loan. Common secured loans include car loans (for which the car itself is the pledged asset) and mortgages (for which the home is the promised item).

Secured loans come in all shapes and sizes, from the pawn-shop transaction (in which your pawned property is held as assurance on the loan) to purchasing a house. If you already own your home, you might be able to take out a second mortgage against the equity you have in the home. You might be able to take out a line of credit against property you own. If you aren’t a home-owner, you can consider taking out a loan against the title of your car, or even pawning a valuable asset like a firearm or jewelry.

Unsecured Personal Loans

An unsecured personal loan differs from the secured loan in the fact that it lacks collateral. If your credit is poor, you are less likely to qualify for an unsecured loan because the lender will consider you a greater risk, and will most likely want collateral to back the loaned money.

One unsecured loan for which you might qualify, however, is the student loan. In the case of a student loan, the lender looks at what the loan is buying—essentially, a higher level of education and (presumably) increased earning potential. Whether you intend to attend a trade school or a university, the credentials you earn will result in an increase of income, enabling you to pay off the loan once you finish school. Most student loans have the advantage of not requiring any payments until you have completed your schooling.

Unsecured Credit Cards

You may not have thought of it in the light of a loan, but that’s essentially what credit cards actually are. They provide access to a line of credit that can be used at any time, in any amount up to the established credit limit.

When you purchase a five-dollar sandwich with your credit card, you are borrowing those five dollars from the credit card company; they have just bought your lunch for you, and you don’t owe them anything back until the due-date on your monthly statement. At that point you can pay off the full balance, in which case you have borrowed their five dollars without even paying interest on the loan. Or you can pay a portion of the balance, and begin owing interest on the remainder.

As with an unsecured loan, you might have a more difficult time qualifying for an unsecured credit card if your credit is poor. You might consider applying for credit cards issued by retail stores, which sometimes have a greater “tolerance” for bad credit. A department store wants to lure you into their store to shop there, which you are more likely to do if you get rewards from their proprietary card—and that means they’re more likely to give you a card than some of the big companies that specialize exclusively in credit cards.

Secured Credit Cards

Like a secured loan, a secured credit card uses collateral to offset your bad credit. When a bank or credit card company issues you a secured credit card, you will make a deposit to an associated account to which you don’t have access, except through the use of your card. If you deposit $500, then that is your spending limit. You can make purchases in stores or online, and you can get cash from ATMs with that card, up to the monthly amount that equals your deposit.

The obvious down side to a secured loan is the fact that you have to come up with that deposit up front. If you’re looking for a loan because you’re in need of cash right now, then you probably don’t have the resources to open this type of credit account. But remember that you’re still going to have access to the money deposited, through use of the card. You can put $500 down as a deposit for that card, then turn right around and pay $500 on a bill or car repair or needed purchase.

The huge benefit of using your money this way is that you can begin to rebuild your credit. Make your minimum payments on time, and you are creating a track record of “timely payments” that will reverse the downward spiral of your credit rating.

Home Equity Line of Credit (HELOC)

The HELOC is a form of secured loan in which you borrow money and use your home (or at least the equity you have in your home) as collateral. If you take the value of your home (let’s say $200,000) and subtract the amount you still owe on the home (we’ll say $180,000), the difference of $20,000 is the equity you have in that home. Essentially, it’s how much of the home you have already paid for. Even though you already have a mortgage on the house, you may be able to apply for a line of credit on that equity.

Some people choose to refinance their existing mortgages for a larger amount, in order to use the extra funds for remodeling or paying unexpected car-repair bills or some other purpose. If you’re canny about it, you might even end up with a lower interest rate than what you’re locked in to with your original mortgage.

Installment Loans

An installment loan is a loan that comes with a payment plan—a certain number of payments, each for a certain amount, spaced out over a certain amount of time. The interest rate for an installment loan is generally locked in when the loan begins, and the interest that will be paid over the life of the loan is included in the payment amounts.

If you are negotiating an installment loan in Canada, consider looking for one that will allow you to make extra payments at times when you have the resources to do so. An extra payment (or an extra amount added to your monthly payment) will go entirely toward the principle, which is the remaining amount of the original loan, without the interest included. By paying down the principle, your loan will diminish more quickly, and you will not only pay it off early, but also end up paying less interest overall.

This type of loan is often available through banks and financial institutions, or you can search for online installment loans for bad credit in Canada.

Payday Loans

A burgeoning business in Canada is that of payday loans. These are unsecured loans in the sense that you do not need to provide a car title or other form of collateral, but they do require proof of a steady source of income. The lender is forgoing the requirement of collateral to assure your payment because you are able to show that you will have the resources to repay the loan when you receive the next paycheck.

Because there is no collateral attached to the loan, payday lenders are assiduous in assuring themselves of your earnings, as well as your other financial liabilities. Your application will include proof of your income for the last few months, as well as disclosure of your regular bills and any other payments to which you are committed. The amount of your loan will be determined by that combination of figures; specifically, the lender is unlikely to loan you more than you would be able to spare from your next paycheck after you have paid your fixed expenses and bills.

Generally speaking, a payday loan will be due in full on the date of your next paycheck, and the interest rates tend to be very high. If you’re in a jam and need cash between paychecks, this can be a lifesaver, but some people end up in a worse jam if they find themselves accruing high amounts of interest if they are unable to pay off the loan in time.

Title Loans

Title loans are a form of bad credit car loans in which the lender takes the title of your vehicle as collateral on the loan. You can often borrow more than you could get from a payday loan, because they have the collateral of your car, but you do have to make sure not to fall too far behind on your payments if you don’t want your car repossessed. The interest rates on these loans are often very high, but they can be an option if you don’t have a regular paycheck, or if you need money quickly and in a higher amount than the payday loan will offer.

Other Options to Consider

Depending on your situation, you might find some additional alternatives for getting the loan you need. If you’re having no luck with financial institutions (or if you’re hoping to avoid the high interest charged by some of them) you might consider asking a friend or family member if they will loan you the money they need. With a promise of some interest, not to mention the chance to help out a friend, they might be willing to oblige.

Another option to consider for personal loans in Canada would be a co-signer, if someone close to you (and with a better credit score) is willing to vouch for you on the loan.

How to get a Bad Credit Loan

You can apply for bad credit loans in person at an institution offering payday loans or title loans. You can also look into online loans in Canada, and apply conveniently from home. Most online options will transfer funds directly to your bank account or prepaid card as soon as your loan application is approved.

In most cases you can see your money the same day, whether applying online or in person. Just because you have a bad credit rating, there’s no reason to suppose that you can’t get that loan you need.