Today bad credit has become common place in Canada since the financial crash in 2008. Most banks are reluctant to lend to people with very bad credit, but that does not mean you cannot get approved for a loan. Without a doubt, a good credit score is necessary to make use of a loan, either for a car or a home, with favourable terms and conditions. But even if you do not have a good credit score, you can get bad credit car loan, however interest rates will be substantially higher. On a positive note, bad credit car loans or no credit car loans can be a great opportunity to improve your credit score, and eventually, to refinance the no credit, bad creditcar loan with favourable terms.
Because of past financial problems it can be difficult to get approval for an auto loan. But then, if you have a steady income and you want to improve your credit score, then one of the best options is to go for bad credit car loans or no credit car loan. You need to speak to a reputable broker, so you know the options available. Be sure to bring financial documents such as bank statements, payroll, etc, which would give the no credit, bad credit broker a clear idea of your financial situation and the amount that would be able to pay each month. There are bad credit car loans with no down payment available in Canada.
Whether it’s a bad credit loan or a no credit car loan, interest rates are bound to be higher. However, you can take heed of the fact that, after making regular payments for a while, you can always go to the option of refinancing to lower interest rates. Moreover, with the assistance of a broker, the chances of finding a better deal are high if you search for them. If you finally decide to go for a bad credit car loan, be prepared to pay initially higher interest payments and don’t be surprised if your asked for a large down payment
The large down payment reduces the amount you pay each month, giving you the option of paying less each month. Usually, the repayment period of a car loan is 72 months for a person with good credit. However, the repayment period could be less for a person with very bad credit, and this period ranges from 48 to 72 months. Learn about car loans for people with bad credit is going to be useful.
If you have a very bad credit but still want a longer payment period, with a moderate interest rate and lower initial payment, then a co-signer is needed. Get a family member, may be parents or spouse, who has a good credit score co-sign the loan document. Having a co-signer, the bank gives a guarantee that their money is not lost and at the same time gives the opportunity to improve their credit ratings. How parents co-sign the loan application is particularly useful for students as they have a great opportunity to build a good credit score by making regular payments on time.
So there are several options if you want to go for a bad credit, no credit car loan, but remember to make payments on time, so you can have better benefits later. Before signing on the dotted line, remember to go through and understand the terms and conditions, so that you know how much you are expected to pay.