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Understanding car financing in Milton

Understanding car financing in Milton

 

Figuring out your finances can be a stressful time.  Not everyone has a good understanding of credit scores, interest rates, loan terms, down payments, bad credit financing… and that’s ok!  We’re here to sort through some of the terms and help you find the perfect vehicle for you.

First things first: knowing your credit score is vital to determining what kind of loan you’ll be able to get.  Generally speaking. Your credit score tells lenders how responsible you are when it comes to paying your debts.  If you are someone who always makes payments on time and doesn’t run up multiple lines of debt, then you likely have good credit.  If you’re just starting out in Milton, you may have no credit history, therefore no credit score for lenders to check.  You can find your credit score at sites like Equifax or TransUnion.

Once you’ve found out your credit score, you can start to plan your budget.  If you fall into the category of “sub-prime” (score below 660), your lenders will be limited.  Most traditional lenders (banks) won’t approve loans for people with sub-prime scores.  There are lenders who specialize in just that (you may have seen dealerships advertising “bad or no credit financing”).

These institutions are able to supply loans to people with lower credit by charging higher interest rates than a traditional lender.  In the end, you’ll pay a little more for your car, but making your payments on time every month will improve your credit score in the long run!  That means you’ll qualify for lower interest rates down the road.

A great way to determine your car payments is to use a car loan calculator.  Most of the banks have free versions on their sites that consider your ideal loan amount, term length and interest rate to show you what your monthly payments will be.  A handy tool to have on your side.

You can get pre-approved for financing with Car Nation Canada Direct, and when you know how much you can spend, browse our selection of vehicles to find the right fit!

Categories: Auto Loan