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Car Loans with Bad Credit Canada

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How bad is your credit? Perhaps it’s not as bad as you think. If you enter a car dealership without knowing your credit history is at your mercy. Basically you can say what they want and it will cost you when you reach a high interest rate. Some car dealers are on you and tell you your score is lower than it is, justifying why the interest rate is so high. Firstly most people know that your credit score. Do not rely on credit reports because they give you your score. The money you pay for a full report including the score will be lower compared to what you may end up paying in excess of interest in being ignorant. is a service that will give the 3 results.

You must run your credit report. There may be some things there that will greatly affect your interest rate. Some bad credit can be corrected. First, get rid of bad defects can doubt. Close all open credit cards do not need or use. Pay or pay their credit cards. Do not blindly apply for a loan and refused to obtain or get a high interest rate due to factors beyond our control. If your score is less than 620 is a high-risk buyer will have to pay higher interest rates. Each lender has their own definition of what constitutes a high risk borrower.

Apply online for a loan first.

There are many lenders who finance high-risk buyers. It is in your best interest to get approval before going to the dealership to buy. This way you know exactly what interest rate you will pay. The seller does not do what is best for you and you may end up paying more than necessary. Shop around as rates vary from lender to lender.

Dealer for financing.

It is okay to use the dealer for financing, provided they are prepared for their tricks. Have a copy of your credit report in hand so that you can not lie about your score. Learn about the current loan rates and let them know they will not accept a higher rate. Be prepared to get up and leave if their demands are not met. Most dealers have access to many lenders and if pressed hard to shop the best rate. A place to find the interest rate on cars is Just because you have bad credit does not mean to be bullied into accepting a deal that is not happy with. Just say no thanks and go to another dealer.

Here is a list of questions to ask when the business office:

1. What is the precision (to the penny) price I’m paying for the car?

2. What is the total amount being financed

3. What is the amount of money I am paying by credit (financial burden)?

4. What is the exact amount of each payment?

5. What is the total number of payments? Do not get sucked into a loan of 6 years to get your payment lower.

6. Very important! Is this agreement depends on getting subsequent approval of the funding of a third? Note the “object of financing” clause in the contract. This is where you nail. send you home with an agreement approved and referred to call you several days or weeks later to inform you that the financing fell and can not get the rate quoted but found a lender to cover the loan at a rate higher. Make sure the agreement is approved by the lender before you leave the lot. If there is any question, tell the dealer you’ll come back and put the car in which everything is resolved.

7. Is there a prepayment penalty if I pay the loan early?

We advise you to get your car loan online and take it to the dealer. This allows you to focus on the selling price of the car instead of the monthly payment. You can also use your online approval as leverage against the finance office of the dealership. If you can beat your loan approval you can consider for funding.

Buy Here Pay Here, as a last resort.

They have tried all lenders and have been denied. Have you looked at your credit report and find out why they are being denied? At this point you must decide how badly you need a car? There is one last way to get a car. There are many “Buy Here Pay Here” dealers so do not get strong armed into a car that meets your needs. Be very careful that you are buying a used car or quality can end up with a piece of garbage that is in the shop on the road. Many small dealers buy auction cars unwanted wholesale can not be in very good shape. You have the option to leave any dealer who is trying to sell a piece of trash a mile high. There are plenty of large distributors that sell quality used cars that offer domestic financing. Always explore your options before signing anything. You should avoid any dealer who is offering a 20% + loans. You should expect to pay about 18% or less.

Bring appropriate documentation to expedite the process. Most dealers want the following steps to process a loan with them. Have the following items in the folder to your arrival at the dealership. Driver’s license, proof of auto insurance, financial information (bank information and credit card), Social Security number, references, proof of employment and pay stubs, proof of residence, phone bill or current utility bill or other), and a down payment. We recommend that you call the dealer first to get a list of exactly what they need.

Find out what type of payment you make? Do you have to deliver the payment or making a payment by phone or online? What is your late payment policy? If you are late on a payment not want to wake up and find the vehicle has been recovered during the night. Do they sell low quality vehicles of a mile? It is in their interest to sell quality cars, but there are sellers out there selling garbage. Do they report to credit bureaus? You want your good credit with them to be reported to help build your credit score back up.

Repair and improve your credit!

Bad credit can be arranged. It takes time but worth the effort. Although it is possible that a high-interest loan today, if you work hard on improving your credit your auto loan is much lower. Beware of credit repair companies that promise to fix your credit fast. If using a credit repair company makes sure they are trustworthy.



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No Credit Car Loan in Canada

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Buy a car with no credit or bad credit presents some serious challenges. Most people need a car for work and life and many who need to finance the purchase of a car. If someone is trying to buy a car and has not established a credit history or have a total credit delinquencies and nonperforming loans, are eligible for a car loan can be difficult.

Car buyers with no credit or bad credit often require the use of some clever techniques financing by the buyer at the dealership or used car lot. The aim of someone with such a problem is due to the purchase and financing of a car you can afford and start building or rebuilding a credit history. As you move through life, creating a credit history good car you can buy more cars in the future with better conditions.
Buying a car without credit

The buyer no credit is usually a young person who has a few bills and credit can only be established for a credit card and cell phone bill. If the buyer has recently graduated from college, getting a car loan is likely to require a guarantee on the loan. A guarantor is a person with established, good credit that the bank also held responsible for repayment. A parent or other close relative is often the collateral for the loan of someone first car.

The recent college graduates may qualify for special discounts and financing at the dealerships for most major automakers. Refer to the manufacturer’s website or call a local dealer and ask about programs for recent graduates. Different manufacturers may offer discounts and low down payment loans or leases.

It is important for the car buyer with no credit to get a job. Be prepared to bring pay stubs to prove your employment and income. The money for the down payment will be easier to get approved for a car loan. Note that only a debit card and a cell phone does not mean you have a credit and finance industry car, you are often seen as a “ghost” or a person with no credit.
Buying a car with bad credit

Bad credit car loan for Creative CommonsIf Flickr Kerembeu21 you have a job and some money to use as a down payment, you can get a car loan for most people in bad credit situations. Car dealers, new and used, will have access to lenders who make auto loans to people with poor credit histories. The point to remember is that the buyer bad credit is somewhat at the mercy of the lender not the person of the dealer’s finance, which usually will do everything possible to find a buyer with bad credit in a vehicle.

The key to financing a vehicle to the buyer bad credit is the loan to value ratio. The lender does not want to finance more than they can sell the car for at auction if it has to be recovered. The choice of cars for a poor credit applicant is limited to new vehicles with large discounts that can reduce the amount of the loan, or used cars that the dealer owns less book value. The payment money may also reduce the loan to value and open the options available for cars.

A dealer who is active in poor countries credit car sales to know what cars and what financing a buyer can qualify for based on your credit history. A buyer in this situation has little room for negotiation and the best option is to shop several dealers and see that you put together the package more attractive.

An endorsement does not help with a bad credit buyer. A car dealer wants to sell a car for everyone who visits the dealership. bad credit buyers have problems at the dealership, which often can be solved in a limited number of ways. The buyer should note what the dealer is able to offer and decide whether the car up to the amount of payment and monthly payments are acceptable.

Buy a car with no credit or bad credit is possible, but be prepared for either a very high rate, in the longer term to reduce monthly payment obligations or the possibility of obtaining an endorsement.

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Sub Prime Car Loans Canada

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Special Finance is the fastest growing segment in the automotive financing market
Until very recently, the term “sub-prime” was essentially unknown outside the circle of lenders and dealers or brokers involved in the financing business. Even many of the customers who benefited from  sub-prime loans probably did not recognize them by that name. But things have changed. The term has now gained front-page status, albeit with a somewhat negative connotation, as a result of its association with the collapsing housing market in the U.S.A.

That negative image is both unfortunate and misleading, however. “Special Finance,” which includes sub-prime financing, is an integral and significant part of the automotive financing business, and any dealer not taking advantage of it is leaving sizeable sums of money on the table. Many dealerships have now recognized that customers with poor credit are not necessarily bad customers, and that they represent a very lucrative market.

Understanding the terminology
Automotive financing sources in Canada now offer a broad range of credit products geared to risk. But understanding the mix of terms and characteristics applied to those products can be confusing and frustrating when trying to find the best fit for your customers.

The term Special Finance encompasses all credit groups other than prime, and credit products available through Special Finance companies usually offer tiered pricing programs, risk-adjusted for customers with varied credit histories. Sub-sets within the Special Finance market include non-prime and sub-prime customers, which are progressively higher risks than the near-prime customer.

Years ago, difficult access to sub-prime financing was a deterrent to dealers’ involvement with such business, but that is no longer the case. Several prominent lenders, including AmeriCredit Canada, HSBC, Travelers, VFC, and Wells Fargo provide ready access to such loans, right on your computer screen.

The market is huge, but different
According to VFC, from 20 to 30 percent of Canadian consumers do not meet conventional bank credit requirements. Based on 1.7 million new-vehicle sales and 2.5 million used-vehicle sales annually in Canada, that means that over 800,000 units are being purchased by non-bank customers. Furthermore, that number is rising as consumer bankruptcies, divorces, and layoffs increase, and prime lenders tighten their credit criteria.

Taking advantage of this opportunity gives dealers access to both a broader and a growing base of consumers. But it is important to recognize that it is a different market that requires a different approach in both attracting and selling to these consumers. It is worth taking the time and making the effort to understand those differences – a task with which any of the aforementioned providers can readily assist.

According to interviews with dealers, conducted by VFC, customers approach vehicle purchases with distinctly different behaviours, depending on their credit position, which necessitates correspondingly different sales processes, as follows:

The “Vehicle Sale” –
Mainstream bank customers typically look at consumer reports, “for sale” publications, the Internet, and other media, when looking to buy a vehicle. Their purchase process and sales experience is focused on the vehicle and their ability to obtain financing is generally not an issue.

The non-bank customer shopping via this sales process is usually considered a near-prime customer, and has the mindset of a bank customer. Keeping the credit process similar to a prime borrowing experience is very important and the interest rate should be close to prime.

A near-prime turndown becomes difficult to close in this process as it often involves a higher rate than the customer anticipated and can sometimes involve switching vehicles.

The “Credit Sale” –
This customer is typically concerned with monthly payments and getting approval, and that process takes precedence over selecting the vehicle itself. Both non-prime and sub-prime customers are best handled using the credit sale. They are typically driven to dealerships through advertising that acknowledges people with poor credit and offers financial sources for them. In may cases these customers have already experienced problems with the “Vehicle Sale” process and have identified themselves as non-bank customers.

Understanding the different sales processes and the non-bank credit products available gives you the ability to find the best fit for your customers. Typically franchise dealerships have catered to the Vehicle Sale process but a growing number are opening Special Finance departments that focus on the Credit Sale in order to attract and increase sales from the diverse credit groups shopping in today’s market. With that infrastructure in place you can then target your advertising to those customers.

How it works
Having obtained all the relevant information from the customer, a dealer can originate transactions over one of several web-enabled finance portals to access the auto finance programs offered by Special Finance lenders. Applications are typically credit-adjudicated within minutes, with approvals returned via the finance portals. Documents can then be printed and executed by the customer without ever leaving the dealership environment.

That ability to close the deal almost instantly is a major benefit of today’s streamlined financing processes. The speed at which you can put a deal together will often determine whether or not a sale will close.
Once a customer has decided on a vehicle, the opportunity to take it home immediately is an exciting option that he or she was probably not expecting. That fact alone can often alleviate small doubts the customer may be experiencing. The “if I could… would you” closing technique works well in this situation and could keep you from losing a customer.

One of the most common reasons non-prime customers do not close after being approved is that, once they realize that financing options are available to them, they become “shoppers.” If that happens, there is a good chance they will be talked out of the purchase by a friend or spouse, or find a better deal somewhere else.
The ability to provide “spot deliveries” – deliveries that occur on the same day as the customer’s first visit to the dealership –  typically helps lead to higher closing percentages and bottom-line profits, but there is an associated risk. It is essential that business managers have a thorough understanding of all your non-prime lender’s requirements and processes.

Business managers must be diligent in verifying proof of income. Lenders usually require a current pay stub, and have specific income requirements that need to meet debt service ratio guidelines. Placing a quick call to the customer’s employer to confirm current employment, and requesting a copy of the previous year’s T4 are additional steps that can to limit your risks. It is important for all parties, including the customer, the payments remain affordable and within the lender’s program guidelines.

No matter how careful you are, you cannot be infallible. There may be information you could not have known at the time of delivery, based on what the customer gave you, and in some cases you may have to request that the customer return the vehicle. This possibility should be addressed with the customer before delivery to prepare him or her for potential problems.

The bottom line
The Special Finance market is simply too big for most dealers to ignore. But it is a different market, with a different customer and a whole host of potential pit-falls. It must be learned and approached with the full knowledge of how it works and how to minimize any associated risks. If you do that, and ensure that your front-line personnel are fully trained in the nuances of that business, you will almost certainly enhance the results on your bottom line.

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No Credit Leasing Canada

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How to get a new car lease when the consumer has a less-than-perfect credit history, a low credit score, has a high debt-to-income ratio or No Credit at all!

The problem typically reveals itself when a consumer attempts to lease a car and the dealer pulls his credit information from Equifax or Trans Union, which is a numerical representation of the consumer’s entire credit history, and finds the score is too low for the best lease rates?

This kind of consumer is considered a “non-prime” borrower. Recent problems in the lending industry have made it more difficult now for non-prime borrowers to find loans and car leases.

Non-prime leasers may not be able to take advantage of special promotional lease deals offered by car makers. These deals have special low lease rates and are typically advertised as only being available to “well qualified” customers. To be “well qualified” means having a good credit score, a steady income, and no excessive debt.

People with no credit, bad credit will usually have an easier time leasing than buying.

The reason is that leasing is considered by Banks to be a higher risk than buying with a loan due to the fact that a down payment is often not required and that the outstanding amount owed on a lease nearly always exceeds the worth of the vehicle for most of the lease term, which is a result of low monthly payments.

If the leaser (“lessee”) defaults or misses payments, a lease company stands a greater chance of losing money if the car must be repossessed.

High debt loads can also be a problem. If a credit applicant’s outstanding debts are relatively high when compared to their income, lease companies may not be willing to let that person add more debt, which increases the probability that they will have problems paying in the future. Even with a good credit score, excessive debt can be a problem getting a lease.

To lease a car with a bad credit or no credit score may require that the customer pay a higher interest rate (lease money factor), make a larger down payment (cap cost reduction), or pay an up-front refundable security deposit — or all of the above.

Leasing customers who find themselves in trouble making payments should work with the lease company to get payment relief. The earlier you contact them, the better your chances of getting help.

Do anything to keep making payments and prevent repossession. Even voluntary lease repossession can seriously damage your credit rating for up to six years.

Lease credit requirements can vary between different dealers, banks and finance companies. Therefore, it pays to shop around for the best deals when you have poor or less-than-perfect credit.

In the current economy, it is more difficult to get approved for leases and loans with American car companies — Ford, General Motors, and Chrysler — than with foreign car makers, such as Toyota, Nissan, and Honda, Suzuki who still have plenty of cash to lend.

Auto Source Financial works with you directly to obtain a No credit, Bad Credit Lease in Canada. We have special lenders who over look past credit issues and lend on your ability to service the payment. This means it’s not about your past issues but more about your ability to make the payments.

For more information about Car Leasing for New Immigrants or Foreign Students in Canada visit Auto Source specializes in all make leasing and Car, Truck and SUV loans for people with No Credit, Bad Credit too!

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