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The truth about bad credit car loans in Kitchener

The truth about bad credit car loans in Kitchener

If you are having credit issues or had credit issues in the past, you know how difficult it can be to get a car loan in Kitchener.

The major lenders seem to only want borrowers with perfect credit and great income, if you don’t check all of their boxes it is like you don’t exist.

With interest rates at all-time lows and a hot car buying market, even if you have bad credit you can get a car loan and we will show you how.

The mindset of a Kitchener car loan underwriter

The underwriters that provide car loans have targets they need to hit to keep their job and earn bonuses.

While these underwriters approve and decline loans, they have to be careful, if they approve a loan that goes into default it makes them look bad and could cost them their job.

The first thing that lenders look at is whether you have a track record of making your payments on time. Your credit report will show whether you have made your payments as agreed. If you have missed your payments, it helps to have an explanation as to why that has happened.

Perhaps you lost your job due to the pandemic or experienced health issues that prevented you from working.

By providing an explanation it shows the lender that you are fully aware of why you are having credit issues and mature enough to take responsibility for it.

Understanding the importance of a stable income

The lender will also focus on your income. It has a material impact on whether you are able to get a car loan approved. If you have a credit score under 680 but substantial income that can be verified, prospective lenders will give you a chance.

Since the onset of the pandemic, most Canadians have been unsure whether their job and income is secure, if you work in an industry that is pandemic resistant like healthcare then your odds of getting the car loan approved are much higher.

Seeking professional help

You will not be able to get a car loan with bad credit on your own, you need to contact car dealerships in your area. The dealership already has relationships with all of the lenders in Kitchener who specialize in bad credit car loans.

Once you have filled out the application, the dealership will review and let you know which lenders would approve your loan and at what interest rate. The interest rate you will pay is going to be higher than what a borrower with a 680 credit score would pay.

While the interest rate today is higher, it is not set in stone. If you follow the advice given by the dealership credit expert, you will qualify for a prime rate car loan in a year or two.

What you need to do is call your local dealership and schedule a meeting to speak with them about your car buying needs. The dealership is there to help you and by following their advice, you will be able to get a car today.

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

Categories: Car Loan

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