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Guide to Find a Car Loan after a Consumer Proposal

Guide to Find a Car Loan after a Consumer Proposal

If you are looking for a car loan after a consumer proposal you are in the right place. Our Cambridge car loans team are going to give you some tips on what steps you should take to rebuild your credit and buy a car at the same time.

 

The first and most important question we must ask before we can proceed is whether you are official out of the consumer proposal?

 

Suppose you are still in a consumer proposal, legally.

 

In that case, you cannot take on any new debts without signed permission from your insolvency trustee, so you need to wait until officially discharged.

 

Start rebuilding your credit right away

 

After completing your consumer proposal, the outstanding debts would be wiped clear, but they would have derogatory remarks inside your credit report and stay there for up to seven years.

 

You must start working on rebuilding your credit; it will not improve by itself.

 

One effective way to start rebuilding your credit is by signing up for a secured credit card issued by HomeTrust.

 

Capital One also has secured credit cards, so you need to sign up for as many of these secured products as possible.

 

These credit cards work just like a conventional card, but you must deposit funds into the account; those funds are used to secure the card and work as your credit limit.

 

The more money you deposit into the account, the more credit you will have available.

 

Every month the credit card company will send an invoice that you should pay on time every month.

 

As you make the payments on time, the banks will report your activity to TransUnion and Equifax, which will help boost your credit score.

 

This is the simplest way to rebuild your credit score, but it will take some time before you see substantial results.

 

Make sure you have enough room in your budget for a new car

 

While you are working on rebuilding your credit, you should take a look at your budget.

 

Inflation in Canada has reached an all-time high of 5.1% per month, and that is growing at a rapid pace. You will need to allocate extra cash to offset these increased costs.

 

The average monthly payment on a new car is over $500, so you need to factor that into your budget.

 

Most lenders are unwilling to issue loans to borrowers whose debt-to-income ratio exceeds 35%; you should have no issues staying below this threshold since the consumer proposal wiped out your debts.

 

Where to get a Cambridge car loan after a consumer proposal

 

Something that you can do while working on your credit score is contacting a local car dealership.

 

The dealership will be able to find lenders who specialize in providing loans to credit-challenged borrowers. These lenders will be able to give you a competitive offer and, in a year or so, you will be able to qualify for prime interest rate car loans.

 

Now that you understand how to buy a car after a consumer proposal, you should contact the dealership today.

 

We’d love to help you find the perfect car loan after a consumer proposal in Cambridge. 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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