Whether you are in the market for a new car or currently have a car loan, interest rates have never been lower, so now would be an ideal time to explore all of your options and save money on a car loan in Hamilton.
I already have a car loan
One of the most common misconceptions that consumers have, is that if they already have a car loan, they are somehow locked into that loan forever.
You can refinance your Hamilton car loan to a lower rate. One of the most common reasons that car refinancing is not discussed is because of depreciation. When you buy a new car, it loses a tremendous amount of its value due to depreciation.
In a normal market, what you owe on the car is usually more than what the car is worth, so refinancing may not make sense.
The pandemic has caused a spike in the demand for cars, so your car may be at par value with what is owed, this means that you could refinance to a lower rate and not have to pay anything out of your pocket.
Whether you are applying for a new car loan, or refinancing your existing loan. You will need to qualify for the loan, based on the current underwriting requirements.
How to qualify for a car loan in Hamilton
Your credit score is the first and most important thing that lenders will focus on. If your credit score does not meet the minimum requirement, your application would be auto-rejected.
The current minimum credit score is 680, but even if your score is lower than that, you should apply to see whether you qualify for a different interest rate than prime.
There are lenders who specialize in providing loans to borrowers with credit scores below 680, we will show you how to access them in a bit.
We touched on the importance of having a good credit score. Having great credit helps you save money, but your income is what lenders are really interested in reviewing.
Lenders use special formulas when determining the maximum loan they will approve, this is usually 40% of your gross income. You will need to be able to provide documentation that proves your income, bank statements and salary slips are usually sufficient.
How to Save Money on a Car Loan in Hamilton
We touched on what it takes to qualify for a car loan in Hamilton, we now are going to show you how to access the best car loans.
You may think that the Internet is the best place to access the most competitive car loans, but that is not true. Your best source to save money on a car loan, is by going through a local car dealership.
Not every car dealership has the most competitive terms, the only way to know is by finding out if the dealership focuses on prime or subprime customers.
Now that you are armed with this information, you should be able to get an amazing car loan, just move fast before interest rates start to rise. The Bank of Canada, is going to start raising rates in 2022, so you need to start reviewing your car loan options now!
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!