A Word Of Advice From An Industry Leader: The Finance Manager At Peel Car Sales
Our clients may qualify for a zero down payment, regardless of good or bad credit. Most lenders require a down payment of 10%-20% to lower their risk, so that In the event of repossession of the vehicle by the lender, the lump sum payment brings the actual value of the car much closer to the financed amount. However, our clients usually get approved for zero down payment, but with higher-interest rates, because of the added risk to the lender. It is in the best interest of both parties to secure a short term loan so that it is paid off earlier and the cost/risk of borrowing is kept low.
A low-interest rate can be pursued on all our high-end cars, because of their newer models, year and condition. Other factors that come in play are the term of the loan. For instance, a less than average credit score can secure a low-interest rate if the client chooses a shorter term, and vice versa.
Lenders also factor in job stability and monthly income, therefore clients may be eligible for low-interest financing by our lenders if they fall into a high-income bracket and have continuous employment history. An important factor to consider is the average age of your credit. New credit does not necessarily mean good credit. This is a common misconception as usually new credit is often reflected in a good score. However, newly established credit must first build age and credit depth in order to really qualify for low-interest rates. Best practice in new credit cases is to start high and establish credit longevity along with pristine repayment history to truly qualify for the best rates and terms available.
An auto loan is an excellent way of improving your credit score on Equifax and Transunion. If you enter into an auto loan agreement; ensure you’re making payments on time and in full. On a second note, If you have a lot of credit available (credit cards/ line of credits) that will have a positive impact on your credit score.
Lastly, if you have any outstanding debt (and are unable to pay it right away) the quickest fix is to contact the lender and arrange a repayment plan and present that at the time of your credit appraisal. Sometimes, a paid outstanding debt might appear erroneously as unpaid. Therefore, you have to monitor your credit and request the credit bureau to remove any false marks on your credit report.
Our lenders understand that Canadians and Permanent Residents finances can take twists and turns. Therefore, The minimum requirements to apply for a bad credit car loan are active employment and earn a passive income. Secondly, In order for our Canadian and Permanent Resident clients to increase the odds of approval, they are required to lower the lenders’ risk by making a down payment. The down payment lowers the total financed amount.
Consequentially, lowering the loan payments and making them more manageable for our clients. It also helps secure a lower interest rate with our lenders. For our Non-resident status clientele, we offer in-house financing and lender leasing services to get you started on your journey. Higher down payments (average of 30-40%) are usually a requirement in order to qualify but are offered on an open loan basis in order to help you pay off your loan as fast as possible with the least amount of interest paid.
Gladly, private lenders affiliated with Peel car sales, unlike the major financial institutions consider your maturity to financial freedom when qualifying you for a car loan during, or after a consumer proposal. Documents conceived by your LIT (Licensed Insolvency Trustee) articulating your proposal to repay any unsecured debt in lump-sum at lower interest rates during the extended period proposed must be presented to the lender to determine that you have a manageable debt to income ratio and no debt exceeding $250,000.
Upon completion of the consumer proposal, the completion certificate and all supporting documents must be presented upon the request of the lender in order to qualify for a consumer proposal car loan.
The process of getting an auto loan, after filing for bankruptcy at Peel car sales is pretty painless, and you won’t have to wait years, instead the only waiting period involved is equivalent to the time the lender takes to contact and obtain certain information from your bankruptcy trustee, regarding your finances. But you have to understand and be realistic that you will not qualify for the same terms and interest rates, you would have qualified for otherwise.
It is essential to monitor your credit and rebuild your credit by making on-time monthly auto loan payments because your credit score will improve after 6 to12 months and you can refinance at a lower interest rate.
Rejected for a car loan? 60% of the clients that get approved for financing at Peel car sales have already exhausted all other options. Shopping from car dealerships and car loaning companies for a car loan has an adverse effect on your credit score. Each credit inquiry is considered a hard inquiry and, regardless of the 15-45 days shopping spree will impact your credit score. Therefore, at Peel Car Sales we like consent!
Of the common reasons for a denial, improper filing of your credit application on the portal is common in Canada. At Peel Car Sales we make sure all your information is in line with the guidelines set by our lenders. We only ask relevant questions required by our lenders and based on your answers determine which lender will give you the best approval- Banking and Private Lending 101. We will appreciate if you wish to contact us for a free finance consultation without affecting your credit score. So that you are lead in the right direction when purchasing the car of your dreams.
The duration, nature, and income of your job are some of the reasons you might be denied a loan. We determine which class of cars on our lot is the right fit for your income to expenses ratio and your debt load compared to your income ratio and guide you accordingly. For example, a client saving $800 a month after deductions might be willing to afford car loan payments of $600. The same theory applies to a client already having credit card debt and personal line of credits. The debt load on these existing revolving and fixed installment debts compared to the income a client earns is also a key determinant of whether he will be approved for his car loan. For example, a cumulative payment for credit card and personal line of credit of $10,000 compared to a $60,000 income per annum represents your financial position. Debt to income ratio of 16.67% shows fairly good financial health.
We specialize in all types of credit. No credit situations are not uncommon for us. We may persuade lenders to lend you money for a car based on other documents. We can work together and propose other documents to prove as evidence to lenders that you can be held accountable for your loans. Proper payment of your utility bills, etc on time and banking statements can be used to determine your money managing skills. Adding a co-signer is a viable option at this point to increase the likeliness of an approval. It is also recommended to start borrowing either by applying for a credit card or a personal line of credit to build your creditworthiness to lenders.