Let’s say you own a truck driving company and are looking to add to your fleet. Or, maybe you’re looking to start a business and need a truck. Unfortunately, getting a large delivery truck, semi, or a big rig isn’t as easy as getting a Honda Civic or minivan. With that in mind, here is everything you need to know about getting approved for a large truck loan in Canada.
How much car can you realistically afford? Find out here.
What Type of Trucks Can I Get Financing For?
When it comes to choosing which type of truck you want, you’ll have what might seem like an almost endless number of options to go through. There are semi-trucks, box trucks, dump trucks, tow trucks, flatbeds, and the list goes on. With so many options, how do you choose which one to select?
Really, the type of truck that you get depends on what you need it for. A person who is looking to become an owner-operator of a long-haul truck driver will have different needs than someone just looking to do some moderately sized local deliveries. The price of the truck will also differ depending on things like the size, age, mileage, etc. Generally, the heavier a truck is, the more expensive it will be and the stricter the requirements of the loan or financing might be.
As far as financing goes, there is the option to lease your truck instead of purchasing, but it is generally a better and less complex option to simply get the loan and pay for it.
How Do I Qualify for a Truck Loan in Canada?
Speaking of getting the loan, let’s finally dive into how to qualify for (and get) a large truck loan in Canada. As we mentioned earlier, it is not as easy as simply getting a loan for a standard vehicle.
The largest reason for this is that banks typically won’t offer you a loan to purchase a large commercial truck. This is mainly because trucking companies have a high failure rate for new companies, this means that banks and other traditional financial institutions often feel that it is too risky to provide loans to these types of borrowers.
Choose an Alternative Lender
However, that isn’t a big deal for most people as there are several other ways to get loans nowadays from local lenders and online lenders. As far as how to qualify for a truck loan in Canada, it will largely depend on which type of truck you are getting a loan for, as well as which lending company you are going with. Most lenders likely have their own rules and regulations as to what you need to do to qualify. However, there are a few general factors to consider to make sure you give yourself the best chance of being approved.
- Have enough for a downpayment saved. The amount will, of course, depend on the total cost of the truck you are trying to purchase.
- Of course, you will likely need to prove you are legally allowed to drive these trucks (or have drivers who can).
- Also, the mileage and age of the truck shouldn’t be too high.
- Having a high credit score can also make it easier to not only qualify but also to potentially get a better deal.
Again, these will vary depending on which provider you go with, so just do your best to be an attractive option as possible.
Bad Credit Truck Loans in Canada
While having a bad credit might hinder you a little bit, you are still able to get a truck loan with less than desirable credit. There are plenty of lenders out there who understand and will potentially be willing to work with you.
While the interest rates might be higher and the terms might be a little more constricting, there is a good chance you will still be able to get the loan you need. If you are still struggling, getting a co-signer to help can be a good way to qualify, but finding a suitable person willing to take on the risk isn’t always easy.
Getting a loan for a truck that is quite expensive is a huge deal and you want to make sure you are prepared for it, so look to improve your credit in the months before getting the loan if at all possible, as it will likely give you a better chance at success.
Already Own a Truck? Use It To Get a Loan
If you’re struggling to secure a loan to help grow your business, you can use a truck that you already own as collateral. This is called a truck title loan. These types of loans can not only help you get a larger loan but can also help you get a better rate.
What essentially happens is that the lender will take the title of your truck and use it to protect themselves in case you default on your loan. This is a great way to make yourself a more attractive applicant for a loan, but it can be risky, so make sure you consider all options and ensure you won’t miss payments or default on the loan.
Of course, there are some requirements to be able to secure a title truck loan and use a vehicle as collateral.
- You must own a big rig or similar large scale delivery truck that is in good working condition
- The truck that is being used as collateral cannot have any liens on it
- You must be 100% finished paying for the truck
If those are all good on your end, you will be able to take advantage of a truck title loan.
Benefits Of A Truck Title Loan
A truck title loan is a great option for all truck owners looking to take out a loan. Should you decide to apply for a truck title loan you’ll be able to take advantage of the following benefits;
- Lower interest rate
- Approval rates are usually higher
- Larger loans are available
- Because it’s secured, lenders are typically less interested in credit scores
Purchasing a New Truck or Big Rig?
While getting approved for a large truck loan in Canada might seem like an intimidating venture, it really isn’t all that much more difficult than a regular car loan. Sure, it is more expensive and there are rules, but as long as you buy within your budget and ensure you make the payments on time, you shouldn’t run into any sort of a problem. If you’re interested in applying for a truck right away, we can help! Fill out an application below.