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How to Avoid High Interest Car Loans in Bronte

How to Avoid High Interest Car Loans in Bronte

Household debt levels in Canada are on the rise, one of the main reasons for this increase is Canadians buying cars they cannot afford. If you are in the market for a new car, you have to exercise discretion to avoid getting yourself in over your head financially speaking.


Our Bronte auto loans team has some practical tips to avoid high interest car loans when you’re shopping for a new car.


Subprime auto loans


These loans are designed for borrowers who have credit scores below 620. They may have a stable income but have not demonstrated an ability to pay their bills on time.


The lenders who provide these loans do not advertise online but tend to work directly with dealerships throughout Canada.


The dealerships who sell used cars understand that some of their customers fall under the sub-prime classification and instead of turning these customers away, have aligned with lenders who can help make the car buying experience more pleasant.


Finding the right dealership


Not every dealership works with sub-prime customers so you need to do some homework to try and locate the dealerships that do, they usually advertise by saying they “work with all credit profiles” or something similar.


When you have a shortlist of dealerships that offer Bronte sub-prime auto loans, you will need to complete an online application and then meet up with a representative from the dealership.


The representative from the dealership will need to better understand your circumstances and why you are having credit challenges.


There is a substantial portion of the population that is experiencing credit challenges, especially since the onset of the pandemic, so you are not alone.


You may initially feel apprehensive about discussing your finances with the representative but bear in mind they are there to help you buy a car. These individuals have seen all sorts of credit profiles, so there is no reason to feel shy.


Fixing your credit issues


The sales consultant will be able to provide you with some tips that will help you increase your credit score which will in turn allow you to more easily avoid high interest car loans. If you haven’t checked your credit score, you can get it for free from one of the top two credit reporting agencies.


Credit scores do change monthly, so you need to keep tabs on your score to make sure you are trending in the right direction.


A very simple way to raise your credit score is to always pay your bills on time. Try setting up a reminder on your phone or leaving a sticky note on your fridge to pay your bills before the actual due date.


You need to allow a few business days for your payment to “post” on your credit account.


From sub-prime to prime in no time at all


What some people have done, is take a sub-prime auto loan and make their payments on time for at least one year. After the first anniversary of your Bronte auto loan, your credit score should have improved and you would qualify for a prime loan at more competitive interest rates.


If you followed the suggestions we have outlined, you will be able to buy a car. While sub-prime loans may not be affordable over the long term, if you are in a pinch and need a car quickly then sub-prime is the way to go.


When you’re ready for a car lease or loan, get in touch with the Bronte auto loan experts at Northway Ford for great deals on auto finance.


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Categories: Car Loan

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