Most people with bad credit think that they should hold off their plans on buying a car until their score has improved. But what if you need a car right now? Would you let your credit score prevent you from getting a vehicle? Well, you shouldn’t. There are tons of lenders in Canada that can help you with your dilemma. In fact, the best way to quickly raise your credit score is by applying for a car loan. Moreover, you might think that it is too risky taking on a big financial obligation but the thing is, you don’t have to spend too much on a bad credit car financing. This article will give you effective tips on how to look for a lender that will give you instant approval on a car loan that is light on your budget
Here in New Car Canada, we provide auto loans for everyone regardless of credit situation. And the thing is, we have made car financing very easy and affordable so that you can raise the bar on your credit score. We want to help everyone get behind the wheel of their new car as soon as possible.
Request a Copy of Your Credit Report
Some people immediately assume that they have bad credit just because of late payments without even looking at the official copy of their credit report. Just to be sure, secure your own copy from Equifax or TransUnion. Upon looking at your report, take note of the factors that really dragged your score down. Many factors can impact your credit score, it’s not just about having delayed payments on your credit history. Other factors include:
- Credit mix
- Type of credit
- How you use your credit
- Number of credit accounts
- Length of your credit history
Now that you know the factors involved, you should work on improving these aspects so the next time you get a car loan, you can enjoy incredible perks such as zero percent interest on any car you want financed.
Looking Around for Lenders
Spare some of your time to visit a number of lenders so that you can compare their corresponding prices. Of course, auto loan lenders’ rates vary so it is up to you to choose the right lender. If possible, request for an APR so that you will have an estimate on what you are actually paying per year. New Car Canada offers very competitive rates for those who are looking for a bad credit auto loan.
Look for a Cosigner
If you know someone that is willing to pitch – in the better. A cosigner is someone that is willing to help pay the remainder of the loan if in case the primary borrower is no longer capable of doing so. This will help solidify your approval despite your poor credit since your lender will see this as a reduction of risk that he is taking on you. To add, it is crucial that you choose a cosigner that has a good credit score and is financially capable of co-financing your loan.
Bringing a Down Payment
If you recently got promoted and have saved up a little cash, consider making a down payment on your vehicle. This will show your lender that you are financially capable of paying your loan and that you are really committed in finishing the duration of your loan. In addition, your total debt is also decreased since you have are putting a down payment on your vehicle. This can really save you a lot in interest payments. Moreover, the recommended amount of down payment is 20% of the purchase price of your chosen car, this is to cover the initial loss of value or depreciation. If you don’t have that amount, paying a down payment is still better than choosing not to.
Choose the Right Loan Duration
Before making things official, consider your options first. Short term loans are demanding in terms of monthly payments (high monthly payment) but overall it will save you considerable amount of money in interest payments. On the other hand, long term loans are indeed light on your budget (lower monthly payment) but you are actually paying a lot in interest. Consider these facts before committing to a loan term.
Pick a Car that You Can Afford
If you have a family, choosing a minivan is much more practical than a sports utility vehicle (SUV). Yes, both can accommodate a number of people but usually, SUVs are much more expensive than minivans. Also, given that a bad credit car loan is more expensive than a standard type of loan, you should choose a car that is relatively cheap but can still give you what you need. Besides, if you can successfully pay off this loan, you can upgrade your ride to a better one once your credit score has improved. And as previously mentioned, having a fully paid car loan in your credit history is the fastest and easiest way of significantly boosting your credit score.
There are tons of ways in order to secure a bad credit car loan. Moreover, getting a bad credit score is quite common especially due to sudden job layoffs or expensive hospital bills that needs to be paid right away. What’s important is you get back up on your feet and start rebuilding your credit. Take action today by filling out our very simple online application form and get instantly approved on any car you want!
We provide free service in 8 provinces, Ontario, Nova Scotia, New Brunswick, PEI, New Foundland, Manitoba, Saskatchewan, and British Columbia. We service everyone from Toronto, Ottawa, London, Hamilton, Mississauga, North Bay, Thunder Bay, Sudbury, Sault Ste. Marie, Barrie, Oshawa, Brampton, Kitchener, St. Catharine’s, Niagara Falls, Belleville, Windsor, Bracebridge, Gravenhurst, Collingwood, Orillia, Peterborough, Nepean, Cornwall, Kingston, St. Johns, Saint. John, Moncton, Winnipeg, Brandon, Red Deer, Calgary, Edmonton, Saskatoon, Regina, Kamloops, Victoria, Surrey, Kelowna, Vernon, Prince George, Nanaimo, Fort McMurray, Banff, Moose Jaw, Prince Albert, Swift Current and the rest of Canada. Our dealer network is one of the largest in Canada and always provides free finance to own quotes.