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Finding a Cambridge Car Loan with Bad Credit

Finding a Cambridge Car Loan with Bad Credit

If you have credit challenges but need to buy a car, you know how difficult it can be to qualify for a loan. The good news is you will be able to get a Cambridge car loan with bad credit but you need to move fast as inflation is working against you

 

Inflation has driven up the costs of everything including cars. These higher prices are compounded by a shortage of new and used cars in Canada, as our Cambridge auto loans team explains.

 

Assessing your credit

 

Take a few minutes and look up your credit score on both TransUnion and Equifax.

 

Most lenders use both of these credit reporting agencies. You could have a great credit score with Equifax, and a bad one with TransUnion.

 

You need to review the credit reports and if you notice any mistakes, have those mistakes addressed by filing a dispute through the proper channels.

 

It takes time to rebuild your credit, it could take a few months but it will be worth it. While you wait for your credit score to improve, you need to start looking for subprime car loan providers in Cambridge.

 

Prime vs subprime lenders

 

Examples of prime lenders would include banks that can access the Bank of Canada.

 

These lenders focus on borrowers that have great credit and very stable income, since these borrowers have the best credit, they enjoy the best interest rates.

 

Subprime

 

These lenders do not have access to the Bank of Canada, so they need to raise capital by going to investors and asking them for deposits. Since these lenders deal with credit-challenged borrowers, the investors want a higher return because these investments are riskier.

 

Another reason why lenders have to charge a higher interest rate is their operating costs are higher than banks because the banks enjoy an economy of scale.

 

Since the banks aren’t able to charge high-interest rates, they need to underwrite a larger number of loans to generate a profit for the bank.

 

Having a stable income

 

While your credit score may not be perfect, your income can make a world of difference. Lenders will give you a chance if you have a substantial income that is stable.

 

Prospective lenders need proof of income, if you are working more than one job or are self-employed, you will need to show present your bank statements for the last 6-12 months. The lender needs to determine what your average monthly income is and whether your income is consistent.

 

Accessing subprime lenders

 

This is the trickiest step because most of us believe the Internet is the best place to find subprime lenders. The best way to find a Cambridge car loan with bad credit is by going through a neighborhood car dealership.

 

These dealerships already have access to all of the subprime lenders in Canada. The dealership will be able to secure a competitive quote and also show you how to rebuild your credit.

 

You now know how to buy a new car with subpar credit, it would be smart to head over to your local dealership today.

 

We’d love to help you find the perfect car loan. Simply fill in the form below and we’ll get back to you ASAP! 

 

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    Categories: Auto Loan

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