Getting car loans in Canada with bad credit is not as difficult as most people think. However, factors such as the amount of debt, the duration of your current employment and income earned come into play here and can affect how easy it will be to be financed. It is important to note that some lenders can take advantage of your situation to rip you off. Therefore, you need to explore all avenues before settling on an auto financing deal. Take note of these guidelines if you are looking at car loans with bad credit.
Ensure that you are pre-approved and settle for a dealer
It comes without saying that individuals looking for bad credit car loans will part with high-interest rates. However, some prices can be considerably sensible compared to others. That's why you should seek car loans approval from different lenders.
To evaluate the car dealerships accepting people with bad credit, check out for posters, billboards from dealership and radio commercial. Some dealerships can process your credit application online and get you pre-approved. Also, try and check with your credit union or bank. Your financial relationship might warrant them to approve you.
Have documents to showcase good credit risk
If you are headed to a dealership to discuss financing of your car loans in Canada, you should take with you supportive documents. This will enable the dealership to confirm your identity and that you have a job. Among the key areas of evaluation includes whether you make timely payments. Also, they will need contact addresses of both friends and family just in case you default to pay your car loan with bad credit.
Stick to your price range
A lot of people know how much they can spend a month on bad credit car loans payments. However, some tend to despise the bigger picture. If you qualify for a 20,000 dollar mid-size sedan shouldn't mean that you have to buy it. If you scale down to a compact design worth 15,000 dollars, you'll free up cash to help you use on insurance, gas and other bills.
Don't consider a trade-in
Some dealership will offer clients with bad credit a chance to trade-in their vehicle for another one without increased monthly payments. This might be tempting but understand that you are adding more debt to your subsequent car loan.
The best way to scale up to a decent ride is to refinance your current car loan with bad credit at a lower interest rate. You should then stick out to the car loan till the initial car is paid for. By the time you go for your second car, you should be in a higher credit tier.