Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Getting car loans in Canada does not have to be hard. If you cannot self-finance your new car you have basically 3 options: bank or credit union loan, personal loan from a private lender, or a loan from family and friends. Sounds easy, right?
That is what this ultimate guide to your best car loan in Canada is for. It makes it easy to get the best car loans in Canada.
Auto or personal loans are not just for new cars. A quality used car is also worth the investment.
Looking for something that’s safe, fuel-efficient, and that will last you more than a few years? Chances are it’ll have a significant price tag. A car loan proves extremely useful, if not necessary.
The good news is that there are a ton of lenders and dealerships across Canada that can give you an affordable car loan. You just need to know where to look.
An auto loan is not the same as a personal loan. However, you can use both to finance your car purchase.
When you secure the loan with a car, you take out an auto loan. You can only use the money on the car. The car guarantees the money.
A personal loan is not tied to the asset you are buying. This is an unsecured loan. You can use the money for anything.
Essentially, a car loan helps you finance a vehicle over several years using divided installments. This breaks the cost of the car plus any accumilated interest into smaller monthly payments. The car becomes more affordable because you won’t have to shell out tens of thousands of dollars at once.
Nonetheless, there are many different costs and fees to pay after you’ve been approved. These costs can include but aren’t restricted to your:
A down payment is usually optional, depending on where you apply. However, most experts recommend that you put down at least 10% – 20% of the vehicle’s final asking price.
A down payment is a good move when financing a newer or more expensive model.
A larger down payment reduces the amount and repayment time of your debt. Plus, it can also help you qualify for a lower interest rate. Moreover, it informs your auto dealer know you’re a serious buyer, so they may offer you a few extra perks.
Interest is what lenders and dealerships charge in exchange for you borrowing from them. The rate you end up paying can fluctuate depending on the lender, what kind of vehicle you’re financing, and how strong your finances are. There are also two types of interest rate you may encounter:
Your loan term and the size of your payments add up to the total cost of your car. After all, your vehicle’s advertised price won’t actually be its final cost, once you factor in fees and interest.
For instance, a longer term and small payments are more affordable at first, you pay more interest and fees overall. Larger payments are harder on your budget, but typically help you pay off the car faster. Either way, you should be careful not to take on a repayment plan that you cannot handle.
There will also be several fees included with your car loan, which vary by where you apply and the conditions of your repayment plan. For example, traditional lenders, like banks, often charge for administrative services, such as loan origination.
If you apply for in-house financing through a dealership, you may also encounter fees for documentation, licensing, and pre-delivery costs. Do these add value to the car? No. You can try to get the dealer to waive them.
In some cases, these are one-time fees to be paid when your term ends, in others, they are applied on a per-payment basis. Ask your car loan provider for a price quote before you sign any contracts.
Amount | Interest | Term(Months) | ||
![]() | $500 - $50,000 | Up to 46.96% | 12 - 84 | Learn More |
![]() | $500 - $35,000 | $29.99% – 46.96% | 9 - 60 | Learn more |
![]() | $500 – $10,000 | 12.99% – 39.99% | 9 - 36 | Learn more |
![]() | $5,000 - $40,000 | Varies | 12 - 72 | Learn more |
![]() | $7500 - $59,995 | 3.95% + | 12 -96 | Learn more |
![]() | $5,000 - $45,000 | 4.90 % - 29.95% | 36 - 72 | Learn more |
![]() | Varies | 11.9% + | 12 - 84 | Learn more |
![]() | Up to $50,000 | Varies | 12 - 84 | Learn more |
![]() | Up to $50,000 | 8.99% + | 12 - 72 | Learn more |
Luckily, there are many places in Canada where you can apply for car loans. Each of these lenders have different benefits, drawbacks, and approval requirements, so be sure to compare them properly prior to applying:
These days, there is an increasing number of car loan transactions conducted online.
In fact, almost every subprime auto lender now has a webpage where you can create an account, apply, and make payments. Alternative lenders can be a good option because they often have easy requirements. Borrowers with bad credit and low incomes won’t have as much trouble qualifying for a subprime auto loan in Canada.
If you’d prefer a more traditional approach, many banks and credit unions can also offer you vehicle financing. Some borrowers prefer financial institutions because they are generally more secure and offer better rates than alternative lenders. However, drivers with weaker finances and credit may find it difficult to get approved.
There are also thousands of dealerships that offer in-house financing, where you pay them directly and avoid having to apply for a loan. Like alternative lenders, car dealerships will usually have less restrictive approval requirements if it means making a sale but can charge slightly higher rates.
As mentioned, every lender and dealership has its own loan requirements. However, there are a few personal and financial details that you’ll have to provide to qualify for the best car loan. These typically include:
Although your credit score may be less significant for some lenders and dealerships, they can check your credit report. That is why you fill out a credit application. The stronger your credit is, the easier it will be to get approved for a car loan with a decent interest rate and repayment plan.
Remember, getting approved for the best car loan is all about your financial health. The more chance you have of making payments on time, the better the result. As such, it’s important to prepare yourself by taking the following measures:
What if your finances or credit aren’t good enough? You can strengthen your application by finding a stronger borrower to cosign it. A cosigner gives your lender a way to protect their investment. The cosigner becomes responsible for your payments if you cannot pay.
Just be careful: Your cosigner’s finances and credit could be negatively affected if they become responsible for your car loan but they also can’t make payments.
Cars come in all shapes, sizes, and costs. If you want the best deal on your car loan, here some extra tips to help you find it:
Loans Canada can help make your search easier. Whether you’re looking to finance a new or used car, we can connect you with the right lenders and dealerships in your area.
Rating of 5/5 based on 2 votes.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Don’t pay until March with this offer from our partner, Fairstone.* Ends January 31st.
New Offer! Get up to $2,000 cashback + a $50 bonus on signing up. Conditions apply.
Earn an average 5%¹ cash back at thousands of partners and at least 0.5%² cashback guaranteed.
With KOHO’s prepaid card you can build a better credit score for just $10/month.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.