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How to get a car loan in Canada when your credit sucks

How to get a car loan in Canada when your credit sucks

Posted by on May 25, 2022 - Archived under Uncategorized

There is no shame in admitting it; your credit sucks; most of us had experienced times when we didn’t have the money to meet our financial obligations and had to avoid calls from collection agencies.

 

Now your financial situation has improved, but your credit is not where you need it to be, especially if you want to buy a car.

 

We will show you the steps to get a car loan, and no, we are not going to suggest you get a co-signer; while that is an option, there is a better way.

 

No non-sense credit building strategies that work

 

Your credit-building strategy needs to start somewhere; the initial step is to sign up with both TransUnion and Equifax; they have free credit services that will give you access to your credit report.

 

After you have access to your credit report, you need to scour it over to find out which accounts are either past due or in collections.

 

Some so-called experts say that paying an unpaid collection may hurt your credit score, and it could initially, but when you pay the collection, your credit score will start to improve.

 

Another upside of paying off the collection is you are showing prospective creditors that you are taking responsibility for your finances.

 

While you are paying off these collections, keep all of your other accounts current and sign up for preauthorized payments, so you never miss a payment again.

 

Sorting out your finances

 

Rebuilding your credit takes some effort, but anything worth having in life will take effort. You need to work out how much cash you have available for your car loan.

 

Most car loans in Canada range around $500 per month, but that depends on the term and interest rate being charged.

 

Since we have established your credit sucks, a good portion of your monthly payment is going towards interest, so you will not qualify for a brand-new car loan; your best option is a used car.

 

Write down your total monthly income, and then subtract all of your current expenses. This will give you a good indication of what you can afford.

 

If there is not much cash left over after the car payment, you need to reduce costs or take on new income sources.

 

For example, you could work a sideline hustle which can boost your income and give you some valuable business experience.

 

You cannot get a car loan on your own

 

To secure a car loan with bad credit, at least in Canada, you need to work with a car dealership.

 

However, you do not have to go far out of your way; there are dealerships in your area that specialize in providing car loans to borrowers with bad credit.

 

After you meet with the dealership, they will go over your file and give you suggestions on how to improve your credit.

 

The dealership already knows all of the lenders, so they will pick the one who is most likely to approve your car loan.

 

Now that you know how to get a car loan with bad credit, why not contact the dealership today?

 

Click here to get approved for your next great new car loan in Canada online today! we have a team of credit specialists ready to help you find a car suited to your needs and will work with you no matter your credit score. 

 

For any questions or concerns, please don’t hesitate to contact us here! 

 

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