Almost everyone has to take out a loan from time to time to cover the costs of large purchases like homes and vehicles. Truck loans are particularly popular, with thousands of Canadians looking to buy trucks each year.
Most people simply don’t have the cash saved up to buy a truck outright, so they turn to financing options. Typically lasting anywhere from a couple of years all the way up to six years or more, truck loans are perfect for those looking to purchase all types of trucks from light duty to heavy duty.
Unfortunately, while many Canadians do have good credit scores, there are still plenty of people struggling with bad credit. Your credit score is the biggest factor that comes into play when applying for a truck loan, so those with bad credit scores can encounter a lot of difficulty.
Bad credit loan providers will look beyond your credit score. They’ll take various additional factors into account and look at each case on its merits. If you have a poor credit score, you’re much more likely to get approved by a bad credit loan provider than a standard truck loan provider, so this is generally the best option to take.
When deciding whether or not your truck loan application can be approved, most loan providers will simply look at your credit score. They’ll make a quick and easy judgement based on that number alone. Bad credit truck loan providers, however, will look at several other factors, including:
Net Income – If you can show that you’re consistently earning enough money each money, even with bills and other outgoings, to cover the cost of your loan repayments, this will put you in great standing with a loan provider
Employment – Being able to prove that you’re in work and have been employed for a reasonable period of time or have a secure contract is another big factor for bad credit loan providers.
Assets – If you already have savings in the bank, bonds, or other assets to your name, this will also put you in a more favorable position for a successful bad credit truck loan application.
We’ve seen that it’s perfectly possible to get a truck loan with a poor credit score, but there are clearly some pitfalls to watch out for along the way. When you apply for your truck loan, consider all of the information listed and laid-out above, as well as the following factors:
The Value of the Truck – Naturally, applying for a credit loan for a brand new, high value truck is going to be trickier in general than if you’re buying a cheaper, used model. Consider your own needs, or the needs of your business, when identifying the ideal truck and choose accordingly.
The Condition of the Truck – While a used truck will be cheaper in general, and therefore easier to get a loan for, it may also be more prone to breakdowns. A poor-quality truck could prove highly costly in terms of repairs, so be sure to get an expert appraisal and only buy a truck from a dealer you can trust.
The Loan Provider You Choose – Choosing the right loan provider is essential. As mentioned above, there are plenty of lenders out there who prey on people with bad credit, so it’s very important to do your research, compare lenders, compare all the details, and make the right decision for you.