Most of us don’t have 30 or 40 grand sitting in our bank accounts, and a third have less than $15,000. Considering the average car costs three times that, many Canadians must finance their vehicles. Financing is another task, and having a not-so-stellar credit score can make it challenging. Here’s what you need to know if you’re in the market and looking for bad credit car loans.
Bad credit car loans work like regular car loans, allowing you to borrow money from a lender to finance a vehicle. The key difference is that you’re applying with a less-than-ideal credit score. Having bad credit might pose challenges in qualifying for the loan, and it often results in higher interest rates, making the overall cost of the loan more expensive.
The positive news is that despite having bad credit, you have various options for finding the right car loan in Canada. Here are some of the top sources for bad credit car loans:
Dealerships
Car dealerships are a common choice for individuals with bad credit seeking car loans. Many dealerships are willing to work with individuals of varying credit standings, increasing the likelihood of securing a deal.
Private Lenders
If the dealership isn’t offering favourable terms or interest rates, exploring private lending could be viable.
First, figure out a budget by considering your monthly expenses, like rent and utilities. You can also check online sites like CarEvo.com, fill out their forms, and see if you’re pre-approved.
If you prefer local dealerships, talk to them about your budget. Online loan companies and reputable car dealers like CarEvo will assess what you can afford and provide suitable offers.
When comparing offers, consider factors like car details, loan terms, payment frequency, and income. Find the monthly payment that fits your budget.
Once you decide on a lender or dealer, gather and submit documents like proof of income, bank details, driver’s license, address proof, and assets/liabilities proof to secure the loan.
Car loans aren’t just for people with excellent credit scores. If your credit isn’t perfect, it doesn’t have to stop you from getting a new car and the loan to pay for it. Just follow our steps, keep an eye on your money situation, and you can purchase a vehicle that fits your budget and situation. At CarEvo, we work with big lenders in Canada to find you the best used car loan rates in Canada and terms for your car loan, even with a bad credit history.
