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Tips to Buy a Car During a Consumer Proposal

Tips to Buy a Car During a Consumer Proposal

A consumer proposal can help a person facing financial hardship get back on their feet, but it comes at a cost, specifically your credit score, as our Guelph auto loans team explains.

 

When you enter into a consumer proposal, your creditors are required to take a massive reduction in the amount of money they are owed. Your credit score will drop down to 400s or lower.

 

If you need to buy a car, you will need to complete your consumer proposal before you can legally take on any new debts, including a car loan.

 

Presuming you have completed your consumer proposal, it is time to start working on your credit score.

 

Actionable credit rebuilding tips

 

Your credit score is really low when you are discharged from your consumer proposal.

 

Start by signing up for a Capital One secured credit card.

 

Everyone is guaranteed approval because you have to deposit money into the card, the money that is deposited works as your credit limit.

 

This is not a prepaid credit card but a real functioning credit card.

 

When you use the card, you will receive an invoice each month which must be paid on time.

 

If you make the payments on time, your credit score will begin to increase.

 

After you receive this secured credit card, you should sign up for a few others, so you have a variety of different tradelines. The more tradelines you have, the higher your credit score.

 

Do you have enough income to service a car loan?

 

While you work on rebuilding your credit score, you should take a closer look at your finances.

 

Do you have enough income to pay the car loan?

 

We all want a new car but do you have roughly $1,000 per month that can go towards a car loan and the operating costs that come with it?

 

Since you just completed a consumer proposal, you should not have any unsecured debts eating up your disposable income.

 

No more than 40% of your income should go to servicing your debts; if you are spending more than 40% of your income, you need to reduce your debts or increase your income.

 

There are many different sources of sideline income you could take advantage of, like working as an Uber driver; you just need to select the opportunity that is right for you.

 

The best place to get a car loan after a consumer proposal

 

You are taking the right steps to rebuild your credit but still need a car today.

 

The best option is to go through a local car dealership; the local dealerships will be able to get you approved for a car loan, even if your credit score is low.

 

The most important thing the lenders focus on is your income and whether you are earning enough to pay your debts.

 

Once the dealership understands your situation, they can go to bat for you and negotiate the most competitive car loan.

 

We have covered what steps you must take when trying to get a car loan after going through a consumer proposal, so why not contact the dealership today and schedule a test drive.

 

We’d love to help you buy a car during a consumer proposal. Simply fill in the form below and we’ll get back to you ASAP or see our selection of used cars at our Burlington dealership. 

 

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