Question 1

How can I get a car loan with bad credit in Canada?

Accepted Answer

Getting a car loan with bad credit in Canada is possible thanks to poor credit auto financing. Not every lender will be able to help you if you have a poor credit score, but there is still a good range of options to choose from. Bad credit auto lenders have experience with consumers with bad credit; typically their terms rely on higher interest rates, collateral against the loan, or a large down payment. Some lenders will look at your income level rather than your credit score, while others may be able to approve you if you have a cosigner.

Question 2

What credit score do you need to get a car loan?

Accepted Answer

One of the most important factors in approval for a car loan is your credit score; most Canadian lenders have a minimum credit score threshold of 550 for their car loans. However, borrowers with a score lower than this can still find approval for a car loan, often through a bad credit auto loan. Bad credit auto financing is geared towards those with a poor credit rating, and typically relies more heavily on income level and loan terms than on credit score. For example, borrowers may have to pay a higher interest rate, or put down a larger down payment, to gain approval for the loan.

Question 3

Can I get a car loan with a credit score of 500?

Accepted Answer

A credit score of 500 may make finding auto financing difficult, but you may still be able to get a bad credit car loan. Your chances are better if: you save a large down payment; you can find someone with a good credit score to be your cosigner; you are able to provide collateral.

Question 4

How much do you have to put down on a car if you have bad credit?

Accepted Answer

There are plenty of options out there for car loans for people with bad credit, and some of these rely on the borrower having a sizeable car loan down payment. Typically, a down payment of 20% or more can help improve your chances of loan approval, even with bad credit. However, not every bad credit loan relies on this; some lenders will still approve bad credit borrowers even with zero money down. These lenders may ask for some form of collateral, or, depending on the size and term of the loan, they may charge a higher interest rate.

Question 5

What is the average interest rate for a car loan with bad credit?

Accepted Answer

Bad credit car loan interest rates can vary widely, but the average rate for Canadians is 7-20%, with the higher end of that spectrum applying to those with worse credit scores. However the terms of the loan can greatly affect the interest rate; for example, the longer the loan term, the higher the rate.