How to Get Bad Credit Auto Loan in Ontario, Canada
How to Get Bad Credit Auto Loan in Ontario, Canada
Posted on August 10, 2023
You’ve probably been assuming for far too long that getting an auto loan with bad credit in Ontario, Canada, is impossible. Well, that’s quite far from the truth. While borrowers with good credit scores enjoy some of the best auto financing deals from most financiers, more than one million Canadians with bad credit have viable options to leverage.
But here’s the starting point: find the right auto financing lender that meets your specifications. In addition, familiarize yourself with how to get ready for auto loan sourcing to fast-track the loan approval process.
Ready for bad credit auto loans in Ontario? This article expounds on what you need to know and essential considerations that come in handy. So let’s dive right in!
First Up: Know Your Credit Score
Your FICO credit score is a number used to determine your creditworthiness. It’s generally between 300 and 900. The higher the score, the easier it is to have your car loan application approved. Scores from 600 to 900 are perfect for auto financing.
The score primarily depends on your credit and payment history. Unfortunately, a bad credit score negatively impacts your financial life, and many lenders won’t allow you to access their auto financial support.
Here’s the good news, despite blemishes in your credit history that push the score below the most recommended range of 600 to 800, you can still apply for bad credit auto loans. But how do you do that? Next!
Steps on How to Get Bad Credit Auto Loans
Are you frustrated because some lenders are unwilling to grant you auto financing? Here is how you can go about it in a few steps:
- Improve Your Credit if You Can
Acquiring detailed copies of your credit reports in Ontario, Canada, is easy. First, ensure you have the reports ready before making a significant move. After that, start improving your credit score by paying all your bills on time and reducing your debts. This might take a lot of your time and effort, but it helps if you’re not in immediate need of a car. - Know What You Can Afford
Almost all lenders require a down payment, which goes directly toward the purchase of the vehicle. The remaining amount is paid monthly based on the agreement with the dealer. Most lenders will approve your loan application in Ontario when you stake a higher down payment because of reduced risks.
But first, find out the amount of money needed as a down payment. The amount increases with the car’s value. Opting for a high-value vehicle will require you to pay significant monthly payments. It can be costly for most people with other expenses like insurance and upkeep. You’ll have to weigh your options keenly. - Prepare for Pre Approval
After submitting all relevant details to the lender, they will review the documents and confirm the loan you qualify for and the vehicle you can comfortably afford. You can still use the pre-approval letter to negotiate a better purchase price. First, however, you’ll need Canada’s bad credit score lenders with bad credit scores. - Sourcing for Bad Credit Auto Loans
In the current auto financing marketplace, there are several lenders, each embracing different terms of practice. For instance, auto loan borrowers can choose banks, auto microfinance institutions, online auto financing lenders, or dealerships. Are you spoilt for choice? Primary research will help you make a sound decision.
But let’s save time for you. Over 60% of Canadians now prefer online auto purchases, and the trend won’t slow down anytime soon. And do you know what that means? You probably guessed it right—online auto financing is now the perfect choice for bad credit loans.
All you need is the best lender, a good internet connection, income and personal details, and a few minutes of your time—you don’t have to break a sweat. - Where to Find Bad Credit Auto Loans in Canada
Now that you’ve seen how your credit score affects your auto financing efforts and the ideal steps to follow for loan pre-approval, getting bad credit auto financing should no longer stress you. Unfortunately, most lenders still have strict loan approval terms.
And that’s where Auto 401 financing comes in; to offer 100% credit approval and favourable auto financing terms to aspiring car owners, even with a bad credit score. This will help you own your dream car fast and guarantee a boost in your credit score.
Get easy car finance even with bad credit, no matter which city you are living in, Ontario.
We Make Auto Financing Easy