Permanent residents in Canada who need a car loan are in the right place. As a permanent resident in Canada, we have put together the steps you will need to take to secure a car loan.
While this may sound like a complex process, it is pretty easy to follow, and you can usually get approved for a new car right away.
Do you have established credit in Canada?
When did you become a permanent resident? Canada is heavily reliant on immigration to keep the economy going. If you are a brand-new immigrant, you may not have established credit which creates some unique challenges.
It does not mean you cannot get approved for a car loan; you will need to work on building your credit score as quickly as possible.
To get a preferential interest rate, your credit score should be over 680. Not sure whether you make the cut? You can access your credit score and reports for free by signing up with TransUnion and Equifax.
Consider it a good habit to keep a constant watch on your credit score, this way, you can spot identity theft before any real damage is done.
The quickest way to build up your credit score
You can do a few things to build up your credit score fast. Start by reducing the sheer amount of debt you are carrying.
By lowering the amount of debt you are carrying to less than forty percent of your total available credit, your credit score is going to improve.
Another simple way to raise your credit score is to make your debt payments on time, all the time.
This habit of paying your bills on time will establish a repayment track record which plays a pivotal role in your overall credit score.
Having a solid enough income for the new car loan
You will need to determine whether you can afford to buy a new or used car. Inflation has caused prices to increase, forcing you to pay more to get the car you truly want.
Most traditional auto loan providers will not issue a car loan if your debt-to-income ratio exceeds thirty-five percent.
With fears of a recession looming, lenders are being extra cautious, so you need to make sure that you have enough room in your budget to cover the new car payment.
The best way for PRs to secure a car loan in Canada
This is not something you should attempt by yourself; what you should do is contact a dealership in your community, one that has a track record of working with other PRs like you.
The dealership understands that you may not be familiar with how car-buying works in Canada.
The dealership will get you approved for the best deal and have you drive home today in a new car.
What you need to do is contact the dealership today and get the process rolling; with each passing day, the odds of interest rates going up increase dramatically, so you need to buy your new car 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!