Car Loans After a Consumer Proposal: How To Get Approved Fast

There is a tremendous amount of misinformation online about how to find car loans after a consumer proposal in London Ontario.

If you need to buy a car, then stick around, and we will give you the information you need to make the right decision.

How a Consumer Proposal Impacts Credit Score

Credit scores range from 300 to 850, depending on which credit reporting agency you are using.

When a consumer proposal is registered, all of your creditors take a financial hit; these creditors agree to take a payment considerably lower than what you agreed to when you signed up for the credit facility.

At the end of the consumer proposal, your debts are cleared, but your report will have derogatory remarks from the creditors because they were forced to receive pennies on the dollar.

Your credit score will be very low, so no lender is going to give you a loan for a car until you start rebuilding a positive payment track record.

When trying to rebuild your credit, the initial step is opening up multiple tradelines: Capital One and Koho both offer secured, credit-rebuilding credit cards and installment loans. Click here for some more quick tips on rebuilding credit.

You should sign up with them as soon as possible and make your payments on time. It will take a few months before your credit score moves up, but it will increase.

Defining Your Car-Buying Budget

Once you have worked on your credit rebuilding needs, the next step is to define your car-buying budget.

We all would love to drive the most luxury cars in the world, but you need to have the budget to pay for it.

Auto loan providers in Canada will not approve a loan if your debt-to-income ratio is more than 40%.

If you earned $10,000 per month, the maximum amount of debt you can service would be $4,000.

You will be paying a high-interest rate on this particular car loan, so the maximum loan you receive will be lower than someone who has good credit.

Where to Finance a Car Loan After a Consumer Proposal

You have taken proactive steps to improve your credit score and budget, but these steps will take some time before you see results, and you need a vehicle right away.

There are lenders who can help you, but you need an intermediary to access these lenders.

The way you access these loans is by working with a car dealership in your area.

These dealerships know all of the lenders across Canada and will select the lender that is going to provide you with a fair deal.

Remember that this car loan is not forever; once your credit score improves, you can refinance the car loan to a lower interest rate or buy a different vehicle.

You need to contact your local car dealership and start going for test drives. After going for a few test drives, you will be able to pick the vehicle that is best suited for your needs.

The sooner you reach out, the sooner you can start enjoying your new car.

If you're ready for a car loan in Southern Ontario, we'd love to help with that! simply fill in the form below to get started.