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Who is Car Loans Canada?
Car Loans Canada has been working with Canadians for over 10 years, to help them get behind the wheel of the right vehicle. Their easy to manage online application allows consumers to apply anywhere at any time. Car Loans Canada matches applicants with a network of dealers and lenders so both their financial and vehicle needs will be met. Whether you’re looking for a new or used vehicle and regardless of your credit situation, Car Loans Canada can help.
How to Qualify For Auto Financing With Car Loans Canada
Unlike most personal credit products, a vehicle-based loan can add up to a relatively large sum of money for the average lender to dish out. Because of that, it may be somewhat harder to qualify for financing if you don’t have outstanding finances and a decent credit score.
Fortunately enough, Car Loans Canada’s approval requirements may be slightly more lenient. In fact, they state that over 50% of their clients are borrowers who have imperfect credit and lower financial health.
Nonetheless, there are a few things that you may need in order to get pre-approved for financing through Car Loans Canada, such as:
- A steady source of employment for at least 3 months
- A gross monthly income of $1,700 or more
- Proof of your age (18+), driver’s status, and Canadian residency
- An address that matches the one on your driver’s license
- A sizeable down payment
You may also have to submit to a credit check and present copies of the following personal/financial documents:
- Valid driver’s license
- Most recent pay stubs and bank statements
- Most recent T4 slips and tax filings
- VOID cheque or pre-authorized payment form from a Canadian Bank
Essentially, the more qualified you are to handle your future payment plan, the more credit and better car loan conditions you can access. Offering a respectable down payment can also go a long way toward reducing the overall cost of your auto loan debt and securing a lower interest rate.
While Car Loans Canada does accept clients who are self-employed or have less-than-perfect credit, the best loan conditions are traditionally earned by having strong finances. If your financial health isn’t stellar, you might also want to contact them to ask if you can offer collateral or get someone to cosign your application.
Where and How to Apply With Car Loans Canada
Similar to many present-day lending networks, Car Loans Canada has a website where prospective customers can apply for financing any day of the week. For more information, you can also contact them by email, telephone, or live web chat (services may vary based on their business hours).
Currently, Car Loans Canada accepts clients from the following provinces:
- British Columbia
- New Brunswick
- Newfoundland & Labrador
- Nova Scotia
- Prince Edward Island
According to their website, it will only take a few minutes to fill out an application for pre-approval, which will be quickly sent to more than 300 different lenders that they’ve partnered with across the country.
Once you’ve been approved, your funds should be deposited directly into your bank account within one business day, although wait times may be somewhat longer if you apply outside of their designated business hours. They might even be able to set you up with in-house financing options through specific dealerships.
Features You Can Access Through Car Loans Canada
As previously mentioned, Car Loans Canada is less of a traditional lending institution and more of a network that refers drivers to various lenders across the country. They can also provide you with other services, such as insurance packages (through Sonnet) and free credit score monitoring.
However, they do provide a few details about the vehicle loans they can connect you with. Here are a few features these loans may offer up:
- Cash amounts of $7,500 – $59,995 (some prime lenders may offer more)
- Interest rates from 0% – 29.99% (average is 3.9 – 8%)
- Repayment plans of 12 – 84 months (longer terms may be available)
- Flexible payment frequencies (weekly, bi-weekly, monthly)
You can even enter your down payment amount, as well as the trade-in value of your current vehicle into their loan calculator to get a better price quote.
Possible Costs To Be Aware Of With Car Loans Canada
Remember, Car Loans Canada’s main goal is to refer you to various lending institutions and vehicle financing options throughout the country. As such, the overall cost of your particular loan will vary greatly depending on what type of vehicle you want to buy, how strong your finances are, and what province you live in.
Nonetheless, there are several basic costs that any borrower might be subject to once they’re approved for their car loan, including but not limited to:
- Loan principal
- Interest (fixed or variable rates)
- Administrative fees (loan origination, etc.)
- Dealership fees (for in-house financing)
- Defaulting penalties (for late, short, or missed payments)
- GST, HST, and other taxes (based on your province)
Always keep in mind that a car loan is a significant financial responsibility to take on, no matter how much money you borrow or what vehicle you end up buying. So, before you finalize your loan with Car Loans Canada, make sure to get a proper price quote and factor your potential payments into your budget to be certain you can afford them.
After all, the car you purchase can also take a huge toll on your bank account and credit report, especially if you default on too many payments. In fact, going into loan default can result in vehicle repossession and further unmanageable debt problems.
Car Loans Canada: FAQs
It’s no secret that a car loan of any size can have an impact on your financial health. This is why it’s important to make sure you ask the right questions, both of yourself and your potential lender, before taking on this type of debt.
What Kind of Car Best Suits My Lifestyle?
Choosing the right vehicle to finance is not always a quick or easy process. Actually, a lot of time and research should go into your final decision. During your search, don’t forget to consider these factors:
- Whether you can afford a new or used model
- What problems your particular model may experience over time
- How much you’ll have to spend on repairs, fuel, insurance, etc.
- How much you might pay for your vehicle vs. how much it’s truly worth
- How rapidly your model depreciates in value (if you want to sell it)
- How reputable your potential lender is
- How trustworthy your vehicle provider is
- What you’ll be using the vehicle for
- Where you live (rural vs. urban environments)
- How long you’ll be in debt for and how pricey your loan payments could be
What Problems Can Bad Credit Cause?
One good thing about applying with Car Loans Canada is that they can refer you to an auto lender that accepts clients who have bad credit (a credit score of 300-600). Although approval is possible, you’ll be considered a riskier client, especially if you have a history of defaulting on your previous credit products.
So, not only will you receive a hard inquiry on your credit report following the credit check, but lenders will be less likely to approve you for a large loan at an affordable rate. Instead, loans will be smaller, more expensive, and have stricter repayment terms.
That said, any loan payments that you complete will gradually elevate your credit score, as long as you’re working with a lender that reports to at least one of Canada’s major credit bureaus (Equifax or TransUnion).
What Are The Advantages of Applying With Car Loans Canada?
- You’ll have access to a wide range of vehicle options
- They can connect you with hundreds of different lenders and interest rates
- They offer multiple services that are now available in 9 provinces
- Good financial health can help you earn favourable loan conditions
- Responsible loan payments will improve your credit
What Are The Disadvantages of Applying With Car Loans Canada
- ‘Cooling-off’ periods are not possible (cancelling your loan without penalty)
- Many different costs will be included during the vehicle financing process
- Poor financial health can make your loan conditions unappealing
- Their services aren’t available in all provinces or territories
- Getting approved and finding your vehicle can take some time