Car Loans Canada

Getting an auto loan can be a mind-boggling experience due to confusing terms, add-on products, and high pressure sales techniques. All these can make the application process more difficult and cause long-term financial difficulties. For these reasons, it is wise to know the best places to shop around, together with the most lucrative offers. If you are eager to learn about the major providers of auto loans in Canada and their leasing terms, read on.

Getting a Car Loan in Canada is Easy

At a first glance at least, it seems incredibly easy to get a car loan in Canada. In fact, some lenders have specialized primarily in dealing with customers with a tarnished credit score, with some even promising to give you money if you have recently filed for bankruptcy. You can apply for financing in virtually all provinces and territories of Canada. Most dealers in the country have based their marketing strategy on the following pillars – fast and easy approval (usually within two business days), high approval rate (up to 94 per cent), minimum paper work (almost all providers offer online application forms), and a minimum down payment or no down payment at all. car keys

Application Process

As a rule, if you apply for a loan with some of the big chartered banks in the country such as the Royal Bank of Canada, the Bank of Montreal or the Toronto Dominion Bank, you will get the best interest rates on your credit, combined with reasonable application fees and APR. However in the typical case, you will need an impeccable credit score as to get access to the best rates. Truly, there are dealers that specialize in lending to customers with, say, ‘imperfect’ credit scores. Their goal is to help the customer get approved and benefit from the substantial interest rates afterwards. Therefore, they are interested not as much in the customer’s current credit score, as in facts such as for how long he or she has been working for their current employer, how long they have lived at their current address and, last but not least, how much they make per month and how stable their income is.

Points to Consider

It is important to look at the term of the credit, the interest rate, and the amount required in the form of down payment. The term indicates the period over which the amount you borrowed is to be paid in full. Remember that the longer it takes to repay it, the higher the interest rate. The latter stands for the percentage you will be charged for borrowing and will be determined by your credit score. Finally, the down payment stands for what you can pay today. The larger the sum is, the less you will pay later on.

Auto Loans as a Way to Rebuild Credit Score

Even if you cannot instantly qualify for the best rates available on the market, this should not discourage you from applying for financing. Remember that obtaining a credit is the best way to rebuild your credit score after bankruptcy. Also, the fact you’ve got an auto loan with a substantial interest does not mean that you are stuck with it for the whole term. Rather, you should make your monthly payments on time for a year or two until your credit score improves and then apply for refinancing with a dealer that offers better rates. It is as simple as that.