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Lendit-FinancialSerious credit problems don’t necessarily disqualify you from a mortgage.

If you want good rates, however, you’ll need a prime (“A”) lender to approve you.

The challenge is, “A” lenders want to see re-established credit before they’ll consider an application. As a rough rule of thumb, that means two years of perfect repayment history, with at least two or more accounts.

There are various ways to obtain those two accounts. The most common is with a secured credit card (like Home Trust’s, Peoples Trust’s, or TD’s).

Lendit Financial offers a second type of option. It’s called the Lendit GIC Investment Loan.

With the GIC Investment Loan you make monthly payments. Those payments are then reported to the credit bureaus. After a period of perfect repayment (of the GIC Investment Loan and all other accounts), people generally see a noticeable improvement in their credit score.

In return for providing this service, Lendit charges 12.99% interest on its loans. That’s not cheap but it’s less than a credit card, commensurate with the borrower’s risk, and is offset by GIC interest. (In addition to paying interest, you accrue GIC interest ranging currently from 2.6% or 3.2%, depending on the term you pick.)

“Virtually everyone is approved,” says Lendit CEO Michael Wendland.

Lendit currently offers these term/amortization options:

  • 3-year ($2,300 loan) with $78/month payment
  • 3-year ($3,200 loan) with $108/month payment
  • 5-year ($5,500 loan) with $126/month payment

Wendland says the larger the loan, the bigger the effect it has on your credit rating. The 5-year $5,500 option is offered because “some A lenders want more than $5000 re-established out of bankruptcy,” he says.

Other things to know:

  • A $300 “administration fee” applies to Lendit’s loans (This is relatively reasonable given the fees charged each year by certain secured credit card companies)
  • Payments are automatically debited from your bank account on the due date each month
  • At the end of each term you receive the proceeds of the GIC that is placed in your name. This often serves as “forced savings for a down payment,” says Wendland.
  • This program is available in every province except Quebec.
  • Lendit is one of the “only lenders in Canada that can lend before bankruptcy is discharged,” according to Wendland.

Rob McLister, CMT

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