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Financing a Car Loan in Waterloo while Self Employed

Financing a Car Loan in Waterloo while Self Employed

Do you want to secure a car loan in Waterloo while self employed? Then, you are in the right spot.


There is a growing number of Canadians who are self-employed and face challenges when it comes to financing. Our Waterloo car loan team are going to cover some of the most common challenges and what steps you must take to overcome them.


Most lenders are not set up to underwrite self-employed applicants


The lenders who issue car loans set up their underwriting processes with a particular type of borrower in mind, one that is traditionally employed.


Employed borrowers usually get paid a wage, so all the lender needs to look at is the borrower's monthly income and their credit score; once those two variables are keyed into the system, it will make a credit decision.


Self-employed borrowers do not have a predictable income, at least not when compared to employed borrowers.


Prospective lenders can ask borrowers to provide you with banking statements and income tax assessments for the last couple of years.


This is used to confirm your income is stable and what your average monthly income is over a year.


This is great if you have been in business for a few years, but if you just recently started your business, then the lender will be less likely to issue a Waterloo car loan, at least not a large enough one to cover the price of a brand-new car.


Your credit score plays an even more important role


As a self-employed borrower, prospective lenders are going to pay even closer attention to your credit score.


For example, to access a prime interest rate, you need a credit score of 680.


Still, self-employed borrowers will need a 720-credit score to get the same interest rate. This may not seem fair, but these are just some of the challenges that self-employed borrowers are going to face.


Most self-employed Canadians use their credit cards to pay for business expenses. This is common, but it can impact your credit score.


When you carry too much debt, it weighs down your credit score which drives up your borrowing costs.


This is you must do everything you can to keep your debts under control, or you will not be able to get a car loan.


Where to find competitive self-employed car loans in Waterloo


If you want to access the most competitive self-employed car loans, you will not be able to find these lenders on your own; the lenders who provide self-employed loans cannot be found online.


Instead, you must go through a local car dealership that has a track record of helping self-employed borrowers like you get a car loan.


The car dealership is able to shop around and find you a good deal, even if other lenders have told you no in the past.


You can get a self-employed car loan, but you need to move fast and contact the dealership soon; the longer you wait, the harder it will be to secure a car loan, so contact the dealership today.


We’d love to help you find affordable car loan in Waterloo while you're self employed. 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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