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.
As long as it’s reliable and cost-effective, a car can be a major commodity. After all, walking, public transit and taxis are not always options, especially when you’re carrying groceries, taking a road trip or trying to get to work. So, if you’d like to add some convenience to your life, a new or slightly used car could be just what you’re looking for.
That said, financing a car can definitely come with expenses, one of the largest being your down payment, which can be hard to save up for.
When you finance a car with a loan, a down payment is a specific amount of money that you give your lender upfront to purchase your vehicle, separate from your monthly installments. Although it can be a lot of money to fork over, there are several reasons why you and your lender would benefit from a down payment:
To see the best results, most experts recommend that you make a down payment of at least 10% – 20% of your vehicle’s final price and it can be difficult for some drivers to save up that much cash in time. Thankfully, there are plenty of lenders and dealerships in Canada that can offer you a car loan with zero down payment.
In that case, your financing plan will function the same way as a traditional car loan, only you don’t pay anything upfront and you may end up with a longer repayment term. You can either borrow a lump sum of cash from a lender to purchase your car immediately (and repay them over time) or do in-house financing through a dealership.
Pros | Cons |
No upfront costs (all interest and fees are dispersed among your loan payments) | It can cost more to finance (if you have a longer term and larger loan payments) |
You can buy the car now, instead of later (no need to save up extra money) | You can end up with negative equity (diminishing the resale value of your car) |
Any money you don’t spend can cover other expenses (fuel, insurance, etc.) | Higher interest rates apply (larger loans are more risky for the lender/dealer) |
You won’t be risking your own finances by draining your savings | It takes longer to gain positive equity (you must consistently maintain your car’s value with repairs, upkeep, etc.) |
Approval is based on your income (higher income = better loan conditions/rates) | It can be harder to qualify for good loan conditions and rates |
Since you won’t be putting any money down on the car loan, your odds of approval will depend on other personal and financial factors, such as your:
Since a car loan can involve a significant amount of money being passed around, it’s essential to be prepared for the application process before you take the leap. Although every lender and auto dealer has a different way of approving their clients, there are a few personal and financial documents that almost all of them will check:
If your credit score falls within the bad range (300 – 600), it’s probably because you’ve had debt problems in the past, such as multiple missed payments, a case of a stolen identity, or even bankruptcy. No matter the cause, bad credit can make it much harder to get approved, particularly for a large car loan with no down payment.
There are a few different ways to qualify for a bad credit car loan without having to make a down payment, including but not limited to:
While a large down payment can make it easier to get approved for good loan conditions and interest rates, it can put a lot of unnecessary stress on you and your bank account. However, there are plenty of lenders and auto dealers in your area that can offer you a car loan with no down payment and Loans Canada can help you find one.
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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