Bad Credit Truck Loans, Financing & Leasing

The Canadian trucking industry is expanding all the time, and drivers are always in demand. But some of those interested in joining this community might have difficulty affording it. Trucks are expensive, and if you’re purchasing for yourself you will almost certainly need financing.

Many traditional truck loans have a minimum credit score requirement that rules out anyone with a low score or a chequered financial history. Fortunately though, there are bad credit loan providers which work specifically with Canadians with lower credit scores. Smarter Loans has compiled a directory of these providers (below) so you can peruse your options, compare providers and read their terms and customer reviews.

If you see a loan or provider in the table below you like, click on their name for more info, or click on “Apply Now” to get your loan application started. Or, allow us to help: pre-apply with Smarter Loans and our team of experts will analyze your application and match you with the best provider for your circumstances.

We can help connect you with the top bad credit truck and trailer financing providers in Canada.

Pre-Apply For Truck & Trailer Financing

Top Bad Credit Truck Loans, Financing & Leasing Providers in Canada

Interest Rate
12 - 120 Months
$15,000 - $1 Million
Starting at 8%
3 - 24 Months
Starting at 7.99%
3-24 months
$5,000 - Unlimited
Starting at 2.5%
2 - 10 years
$5,000 - $500,000
4 - 12 months
$5,000 - $500,000
Starting at 7.99%
6 - 24 Months
$5,000 - $50M
Starting at 7%
5 - 96 months
$2,500 - Unlimited
Starting at 3.9% - 34.9%
3 - 240 Months

Understanding Your Credit Score

What is a Credit Score?

Every consumer in Canada has a credit score that is based on information in your credit report. This credit report is essentially a record of your financial trustworthiness, and combines how long you’ve had credit, how much credit and debt you have, how often you make debt payments, information on late and missed payments, early payments, bad cheques, and so on. These factors are combined into a number that ranges from 300 to 900.

Credit Score Ranges

  • 300-599: Poor
  • 600-649: Fair
  • 650-719: Good
  • 720-799: Very good
  • 800-900: Excellent
Source: Equifax

Why Your Credit Score Matters

Credit scores are an important part of your financial identity, and help lenders, creditors, businesses and banks assess their willingness to do business with you. The lower your score, the higher a financial risk you are perceived to be. This may mean it’s harder to get a loan, and that it becomes more expensive to borrow. Conversely, the higher your score, the easier you will find accessing financial products.

The average credit score in Canada is 650; Quebec has the highest number of people with excellent credit scores, and Nunavut has the highest number of people with poor credit scores.

How Your Credit Score Impacts a Truck Loan

As your credit score is used as a litmus test of your financial risk, it can have wide ranging impacts on your loan options. Bad credit can mean:

  • Higher interest rates
  • Shorter loan terms
  • Harder to get loan approval
  • More paperwork required 
  • Longer application processing times
  • Larger downpayment required

Buying a Truck With Bad Credit

If your credit score is less than 600, you may run into some of the difficulties mentioned above. And as trucks are a big ticket item and require large loans, your credit score can become even more critical.

Bad Credit Lenders

Bad credit lenders fill the gap in the market left by traditional lenders. There are plenty of hard-working Canadians who have less than perfect credit, but who still need financial help, and these specialist providers cater solely to this demographic. These lenders have experience working with higher risk borrowers; their eligibility criteria are less stringent, their application processes easier, and their approvals process more forgiving. They may however charge higher interest rates than other lenders, to offset the greater risk.

How Do Bad Credit Truck Loans Work?

A bad credit truck loan is a lot like any other truck loan, in that it is secured against the vehicle being purchased, and the term usually ranges from a year to seven years (on average). The loan is available upon approval as a lump sum, and the repayments consist of principal plus interest, at whatever rate you agreed to. Loans can have either variable or fixed interest rates; there are also sometimes associated fees (such as application fees, loan origination fees, late payment fees, etc.)

How Can You Use a Truck Loan?

You can use a truck loan to purchase any kind of truck, including:

  • Highway Trucks
  • Tow Trucks
  • Semi-trailer Trucks
  • Box Trucks
  • Flatbed Trucks
  • Garbage Trucks
  • Light Duty Trucks
  • Heavy Duty Trucks
  • Concrete Transport Trucks
  • Dump Trucks
  • Flatbed Trailers
  • Dry Van and Enclosed Trailers
  • Refrigerated Trailers
  • Reefer Trailers
  • Lowboy Trailers
  • Step Deck Trailers
  • RGN Trailers
  • Conestoga Trailers
  • Side Kit Trailers
  • Specialized Trailers

Applying for a Bad Credit Truck Loan

Applying for a bad credit truck loan is easier than ever thanks to online application processes. You can compile and submit all of your documents online, from the comfort of your home, without delay or inconvenience. Generally speaking, most lenders will require the following from you upon application:

  • ID
  • Proof of age
  • Proof of Canadian residency and address
  • Information regarding existing debt levels
  • Information regarding income and assets

Once this information is processed to determine the borrower’s likely approval status, there are then some specific truck-related details that will help determine the loan terms and what an individual borrower qualifies for. These factors include:

  • Type of truck and intended purpose
  • Value of the truck
  • Size of downpayment (if any)
  • Type of truck vendor

Why Use a Bad Credit Truck Loan?

Bad credit truck loans have their pros and cons, just like any financial product.

Their advantages include:

  • Accessibility
  • Versatility
  • Quick approvals process

Their disadvantages include:

  • Higher rates
  • Potential for exploitation by predatory lenders

It’s also worth noting that a bad credit loan can help you to build better credit for the future, by accessing a loan and then making payments on it as directed. This will build up your credit score over time. However, if you fail to make payments, then this has the adverse effect.

Choosing the Right Loan For You

Choosing the right product for you starts with finding a reputable lender. Check out past customer reviews to see what others have said, and always read the fine print of any loan agreement to ferret out possible issues. After you have found lender(s) you are sure of, check eligibility criteria to ensure you meet them. Then all you need to do is compare terms to find the most affordable and practical loan for your circumstances. Remember to take into account:

  • All fees
  • Payment schedule
  • Interest rate
  • Downpayment requirements
  • Collateral requirements
  • Loan term

Improve Your Chances

If you are struggling to qualify for a truck loan, there are some options that may make loan approval more likely. These include:

  • Borrowing less (for example, by purchasing used)
  • Putting down a larger downpayment
  • Getting someone to co-sign the loan
  • Providing other collateral
  • Making a trade-in

Leasing vs. Owning

You can also consider leasing a truck, if purchasing one is too expensive or not an option for you. Leasing allows you access to a truck, so you can use it for work, and also means you can start creating a history of regular payments, which over time will help improve your credit score.

Some leases include repair or maintenance, which can be a significant help if operational costs are a concern. Depending on the truck company, leasing might also be more financially attractive – although it is important to remember that leasing means you do not and will not own the truck, regardless of the number of payments you make on it. This is potentially both a positive and a negative: you won’t own it, but that means you don’t have to worry about depreciation or selling it at a later date.

Frequently Asked Questions About Bad Credit Truck Loans

What is a bad credit truck loan?

A bad credit truck loan is a loan to help a consumer with bad credit (a credit score of less than 600) purchase a truck.

How do I qualify for a bad credit truck loan?

Qualifying for a bad credit truck loan is not as hard as qualifying for a regular truck loan. You must be age of majority, a Canadian resident, and be able to show ID, proof of address, and usually some financial information. The type of financial records you must show to qualify for a loan varies by lender, but often includes income information.

What are the benefits of a bad credit truck loan?

The benefits of a bad credit truck loan include accessibility (versus traditional loans which have stricter eligibility requirements), versatility (sometimes allowing flexible payments and allowing a greater range of loan terms), and a quick processing time.

How much can I borrow with a bad credit truck loan?

The amount you can borrow with a bad credit truck loan depends on a number of factors, including your exact financial circumstances (credit score, income level, existing debt levels, size of downpayment if any, and so on) and the details of the truck you’re purchasing (age, value, type, purpose).

What kind of truck can I buy with a bad credit truck loan?

You can buy almost any kind of truck with a bad credit truck loan, from a small delivery truck to a garbage truck, to a semi-truck. You can even buy a used truck!

Can I still get a bad credit truck loan with a bankruptcy on my record?

Yes, it is still possible to get a bad credit truck loan if you have experienced bankruptcy in the past. Bad credit lenders have experience with consumers who have had past financial difficulties, and while they may charge a higher interest rate or have other, stricter loan terms, their approvals process is much more forgiving than traditional lenders’.

Do I need a downpayment for a bad credit truck loan?

It is not a requirement to have a downpayment for a bad credit truck loan, although having a downpayment can result in access to loans with better terms.

What’s the average interest rate for a bad credit truck loan?

Interest rates for bad credit loans vary widely, and depend on many factors (including your exact financial circumstances). The average range is from 7% to 20%.

How can I be sure I’m using a reputable bad credit lender?

There are predatory lenders in Canada who try to exploit bad credit borrowers with punitive terms and unstable products. To be sure you are using a reputable lender who won’t do this, always check their terms and conditions, read past client reviews thoroughly (including the bad ones!), and do some due diligence on how long they’ve been in business and whether other companies recommend them.

Written By Smarter Loans Staff

The Smarter Loans Staff is made up of writers, researchers, journalists, business leaders and industry experts who carefully research, analyze and produce Canada’s highest quality content when it comes to money matters, on behalf of Smarter Loans. While we cannot possibly name every person involved in the process, we collectively credit them as Smarter Loans Writing Staff. Our work has been featured in the Toronto Star, National Post and many other publications. Today, Smarter Loans is recognized in Canada as the go-to destination for financial education, and was named the “GPS of Fintech Lending” by the Toronto Star in 2019.

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