How to get a Car Loan while in Debt in Binbrook
How to get a Car Loan while in Debt in Binbrook
Posted on January 10, 2022
Most of us, let’s face it, the majority of us are in debt. We need debt to live in Canada, from student loans, credit cards to our homes and cars.
If you want to have anything, you are going to need financing to make it happen. Our Binbrook car loans team are going to discuss how you can get a loan when you are in debt.
Not all debt is the same
Some people will say that all debt is bad, while owing money can lead to stress if not kept in check. There are debts that are beneficial and others that are downright nasty.
An example of a bad debt would be credit card interest or a payday loan, you are paying a high interest rate for something that is not providing you an ongoing benefit.
If you have a mortgage or a Binbrook car loan, you are enjoying the benefit of the purchase on a regular basis.
Your home provides shelter and your vehicle lets you go places and work more efficiently. The vehicle could also be a source of income if you use it for work, which a growing number of Canadians are doing.
Assessing your debts and credit score
Get a free copy of your credit report from Equifax and TransUnion today. You need to itemize all of your debts and begin paying down the smallest balance as quickly as possible. This is to get you in the habit of paying off your credit card debts.
The immediate benefit of paying down these smaller debts is your credit score will start to rise plus you save money on interest charges.
Total income versus total debts
Write down your total monthly income and then subtract all of your regular monthly debt repayments including rent/mortgage.
If you have more than 40% of your income left over, then you can afford a new car loan, if you don’t have at least 40% of your income, you will need to pay down some debt.
Securing the lowest possible interest rate
Even if you are carrying a significant amount of debt, you can still get a good interest rate.
The reality is, interest rates have never been lower, so even borrowers with bruised credit are able to save money.
Where to access competitive car loans in Binbrook
Something that may surprise you, the best source of car loans if you are in debt, is your local car dealership.
It may seem old-school since most consumers do their shopping online. But, the car dealership has evolved and adapted to provide top-notch service, even during the pandemic.
What gives the dealership a competitive advantage aside from having an impressive inventory of new and used cars to buy, is their access to wholesale car lenders.
The lenders you see advertising online are going to be quoting you retail interest rates but your dealership can get you wholesale rates, there is simply no comparison.
The best decision you can make today is reaching out to the local car dealership and reviewing the options that are available to you.
When you’re ready for a car lease or loan, get in touch with the Binbrook auto loan experts at Northway Ford for great deals on auto finance.