St. Catharines Bad Credit Car Loans
How to Get St. Catharines Bad Credit Car Loan Approval
It stinks to have bad credit. You must take out specialized "subprime" loans, which typically have extremely high interest rates, because you cannot be authorized for prime lending rates. However, there are still options for obtaining a low-interest St. Catharines car loan while having bad credit. We will demonstrate!
Preparation is Key
Do your homework: You should make sure you are knowledgeable about St. Catharines bad credit car loans before speaking with anyone about one. You'll need to conduct a little study in this area. You still have options, and you don't want to be taken advantage of, even though you won't have access to the best loans in Ontario. Many lenders, like ourselves, focus on customers with bad credit!
Learn about all of your alternatives. Examine those choices, making note of your favorite's. Have a backup plan at all times in case your first decision doesn't work out. However, we advise against applying for too many loans since each application you submit could result in a hard credit inquiry from the lender or dealership, which could lower your credit score. Here is more information on credit inquiries.
Figure out your budget: Figure out how much you'll be able to afford to pay every month using our car loan calculator. It will give you a good estimate on what kind of budget you'll have when looking for St. Catharines car loans with bad credit. If you have a trade-in or have money for a down payment, remember to factor those into your calculations!
Check your credit report for errors: Before you start looking for St. Catharines bad credit car loans it's important to know what your exact credit score is and make sure you don't have any errors on your credit report. Your credit report is going to give you a detailed list of all your unpaid debts, active lines of credit, and missed payments. Errors are actually more common than you might think and can really harm your credit score. Fixing those errors could be a great head start to financing a large loan.
You can check your credit report for free every 6 months either online via Equifax or TransUnion, or delivered to your door by calling one of these numbers: (Equifax: 1-800-465-7166, TransUnion: 1-800-663-9980).
Documents Needed for a St. Catharines Bad Credit Car Loan
Proof of employment: Most (if not all) lenders will need you to prove that you have a history of steady employment so they can assure you'll be able to have a steady flow of income. Bring your most recent paychecks or pay stubs.
Proof of income: You'll need to prove to lenders that you can actually afford to pay off the car loan every month, so you'll have to provide bank statements and details of your current debts and properties.
Driver's license and proof of email address: This is an obvious one, but nevertheless you'll need to prove that you're legally allowed to drive in Ontario. You also need to confirm your residency via a bill that shows your address (such as a utility or electrical bill).
6 Tips to Help You Get Approved
Get pre-approved (online): Numerous online merchants and physical dealerships, including us at Car Nation Direct, offer online pre-approval through a straightforward form. The benefit of online pre-approval is that you can quickly compare options and shop around.
Consider buying used instead of new: In Canada, there is a sizable secondhand automobile market. You are therefore more likely to find a used vehicle loan in St. Catharines if you have bad credit.
The majority (if not all) of the features you'd find in a brand-new car will be there in a used car that is only a few years old, and it will be less expensive! Additionally, you won't have to worry as much about depreciation when you buy a used automobile, which is typically a major concern for those who buy new.
Get a co-signer: Even while you can still be accepted without one, it is significantly simpler to finance St. Catharines bad credit car loans when you have a co-signer. Someone you can trust, such as a friend or relative, who consents to co-sign for the loan is referred to as a co-signer. In essence, the co-signer will pay the debt if you are unable to.
Because co-signers reduce risk and guarantee timely repayment, lenders adore them. For additional information about co-signers, click here.
Save for a down payment: Bad credit results in substantially higher interest rates (see image below). For this reason, it's crucial to put aside as much cash as you can for a down payment on your next vehicle. To find out more about easy methods to save money, click here. In St. Catharines, the more money you put down, the smaller the loan you need to repay and, thus, the lower the interest rate you will have to pay.
Remember you can still negotiate: Even though you may be dealing with a low credit score, you can still bargain! In reality, when looking for a bad credit St. Catharines car loan, negotiation is crucial to ensuring that you aren't being taken advantage of.
Preparation is the key to any negotiation's success. You'll be more assured while dealing with the lender the more informed you are about your circumstances. Show the lender a better offer from a competitor if you've seen one; they may match it or even outdo it to get your business.
Move on if the negotiations are unsuccessful. There are many lenders out there who are interested in your company.
Don't give up: If you've been declined a St. Catharines car loan or can't seem to work out a deal your happy with at first, don't give up! There are so many great lenders out there willing to offer you a good deal and earn your business. Keep shopping around and eventually you'll find a loan you can be happy with.
3 Ways to Finance St. Catharines Bad Credit Car Loans
The Dealership: This is of course one of the most popular locations for those looking for St. Catharines bad credit car loans. Most dealerships are ready to work with anyone, so there is a strong chance they can assist in closing a sale. However, because of your poor credit, some dealerships may try to take advantage of you, so it's vital to be aware of the bargain they're offering you and, if you can, shop around to make sure you aren't being taken advantage of.
Banks: If you have bad credit, banks may not be able to lend to you very often and we always recommend to head to your local dealership first, but it is still worthwhile to try if you're running out of options. Try contacting the local banks and credit unions. Explain why they should grant your request for a car loan in support of your position. Even if the outcome is unsuccessful, at least you will have explored all of your possibilities.
Private Lender: Going the private lending route could be a good alternative if the dealership and banks are unwilling to work with you or won't provide you an interest rate or arrangement that you believe is fair. There are countless private loan choices available, but they are undoubtedly frequently riskier than obtaining a loan from a trusted business, website, or dealership. If you decide to apply for a car loan from a particular lender, it is crucial to conduct thorough due diligence on them.
How Car Loans Improve Credit Score
Your payment history accounts for about 35% of your credit score, thus late payments substantially hurt your Ontario credit score. You will be remembered for any late payments you made for the following ten years, but you may start erasing those memories by making sure you don't miss any more. Payment automation is strongly advised.
Credit is an odd thing because, despite what you would believe, having no debt does not improve your credit score. On the other hand, having too much debt also lowers your score, so you need to balance your "credit utilization ratio" carefully. This basically compares the amount of credit you have available to you to the amount that you are really utilizing.
You want this number to be less than 30% but greater than 0% in that nice comfortable range for the greatest results.
The Alternative of Improving Credit Score
We'll tell you upfront that the best course of action to take here is to work on rebuilding your credit. However, you might need a car loan right away and improving your credit isn't really possible in the short term. It's a slow process that happens over time as you build positive credit history. if you're not in a rush and have time to fix your credit score, click here to get started.