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Many New Brunswick inhabitants need access to a car to go about their daily activities. Unfortunately, reliable cars don’t always come cheap, which is where a good car loan can definitely come in handy.
With the right car loan, you can purchase makes and models of all kinds in New Brunswick, such as:
- And plenty of other brands!
Need a New Brunswick personal loan instead? Take a look at this.
How Else Can a Car Loan Help Me in New Brunswick?
Good question! Car loans aren’t just beneficial because they make newer cars more affordable. They also are helpful in a ton of other ways. For instance:
- As a credit building/improvement tool. The more timely, complete car payments you make, the better it is for your credit score when your dealership or lender in New Brunswick reports your activity to Canada’s credit bureaus (Equifax, TransUnion)
- To reduce the cost of your next car. Under certain circumstances, it’s often possible to “trade-in” your current car for another. If your car has some value, your dealership might deduct that value from the price of your next car. What happens if you want to trade in a car that’s not paid off? Find out here.
- To buy a hybrid or an electric car. Speaking of trade-ins, it might be time to reduce your fuel consumption by switching your gas-guzzler for something more practical. However, green cars can be pricey, so a car loan can be a perfect payment method.
- To reduce your stress. While car costs can be a pain, having the option of a car at your disposal can give you some much-needed peace of mind.
What is a Vehicle-Title Loan and How Can it Benefit Me?
If you’ve already paid off the full balance of your current vehicle, whether it was by car loan or otherwise, it’s possible to use your vehicle title to benefit you even further. While this option depends on your lender’s policies in New Brunswick, it can be a good way of accessing installment-style loans of varying amounts, especially when you have bad credit.
Here’s what would happen:
- You’ll get your car inspected through your dealership or mechanic in New Brunswick, giving you it’s approximate value in today’s car market.
- If your car does have a decent enough value to qualify, your lender will grant you a loan of a similar amount, using your vehicle title as collateral, similar to your other assets (house, real estate property, etc.).
- Be careful! Your lender now owns the rights to your vehicle temporarily.
- You’ll then have a specific period during which you’ll pay back your loan through scheduled payments (installments).
- If you make all your payments on time, your loan term will eventually conclude and your vehicle title will be returned. If you miss too many payments, your lender might repossess and sell your car to regain part of their loss.
- If all goes well, however, you can use your vehicle title loan for whatever expenses you need, all while building and improving your credit.
Check out this infographic to compare purchasing a new car vs. a used car.
Why Does My Credit Matter?
Since any car (new or luxury models especially) can cost a pretty penny, your dealership or lender in New Brunswick needs to confirm that you have the financial fortitude to pay them back in full and on schedule.
So, during the application process, they’re likely to examine your:
- Credit (report, score, history, rating)
- Gross monthly/yearly income
- Employment history
- Current debts
Your credit report and credit score (ranging from 300-900) are particularly important because they showcase how you’ve been handling your other credit products (credit cards, loans, mortgage, etc.)
Good Credit (score of 650 or above) can lead to:
- Higher chances of approval for newer and/or more expensive cars.
- A lower interest rate for your scheduled payments (saving you money over time).
Bad Credit (score of 620 or less) can lead to:
- Lower chances of approval for any type of car.
- A higher interest rate for your scheduled payments (costing you more over time).
- More necessity for compensation, such as:
- A larger down payment
- A co-signer
While you can certainly find New Brunswick dealerships who will offer you a car loan even with your bad credit, you can potentially save money when you improve your credit with these helpful steps:
- Build a history of responsible debt payments – By paying off all your other credit accounts (credit cards, lines of credit, etc.) on time and in full, you’ll be raising your credit score.
- Fixing errors in your credit report – A single error in your credit history caused by a payment that wasn’t reported properly can cause serious harm to your credit score. Review your credit report (free once per year with Equifax or TransUnion) and dispute such errors to rectify the situation.
- Use less of your available credit – Even if you have to use cash or debit, staying as far below your credit card limit as possible should boost your score. Use less than 30-35% of your available credit for the best results.
- Avoid hard inquiries – Every time a lender pulls your credit report to determine the likelihood of you defaulting on your loan, a notice of “hard inquiry” gets added to your credit history. These types of credit inquiries lower your score by a few points and remain in your profile for several years. Too many hard inquiries not only damage your score, but it also makes you look irresponsible like you’re being denied for credit by a bunch of other New Brunswick lenders.
Can I Use a Car Loan For Recreational Vehicles in New Brunswick?
Cars and trucks aren’t the only types of vehicles you can access with these types of loans. Depending on your lender/dealership in New Brunswick, you can also get approved for:
- Trailers, mobile-campers, etc.
- Boats, jet-skis, etc.
- Motorcycles, all-terrain-vehicles, snowmobiles, etc.
Need a short term loan in New Brunswick? Check this out.
Is it worth paying off a car loan early?
I have a low credit score. Can I still qualify for a car loan in New Brunswick?
Can I refinance my car to get a lower monthly payment?
How Can Loans Canada Help New Brunswick Drivers?
Here at Loans Canada, we can help you gain access to loans of all kinds, including solid car loans. Just contact us and apply today to be linked up with the right sources for all your credit product needs!