When you want to purchase a vehicle to bring an end to all your transport issues, you start visiting dealerships to see what they have to offer. At the same time, you go online to see which vendor gives you the best bang for the buck.
However, if you are like most of the Canadians in the country, you know you can’t afford to pay the entire amount for the vehicle in one go. A better practice is to take a car loan with the perfect monthly payments which fit your budget.
As you start approaching banks, you realize that they take a look at your credit score, before considering your loan application. Due to this reason, you begin to wonder, what should be the ideal credit score, to be eligible for credit from financial institutions.
Ideal credit scores for a car loan
In most cases, it becomes essential to have a credit rating above 700 to get low rates of interest on your new car loan. For used vehicles, banks don’t mind lending to those whose score is above 650.
You can still get a car loan
Even if your credit score doesn’t fall in between these figures, it doesn’t mean you can’t take a car loan. The only downside of a poor rating is the increase in monthly payments, as these financial institutions think it is the only way to deal with the risk.
Luckily, several lenders throughout Canada are ready to work with consumers whose credit scores are less than ideal. They understand that every individual’s financial situation is different, which is why they are willing to bring down the interest rates for their car loans. Whether you have no credit or bad credit, they will look at other factors that determine your ability to repay the loan.
Make sure you go through all your options, before picking one which suits your requirements. Keep all the necessary documents in a single place, so that you can submit them when required. Also, take a closer look at the contract and go through it with a fine-tooth comb before you sign the papers.