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Bad Credit Car Loans in Ontario, Canada | Toronto, Mississauga, Brampton

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How to get a Car Loan with Bad Credit in Canada?


The decisions you made yesterday can easily affect the choices you can make tomorrow when applying for a loan, applying for a job, renting a vehicle or applying for rental housing. Those situations call your credit score into play and can impact whether you are approved or denied. High credit scores appeal to lenders, who see those folks as low risk. Less than perfect credit can determine the interest rates and credit limits that you're approved for. In competitive housing rental markets, it can also mean the apartment, condo or house goes to the tenant with the better credit history. Ouch. In Canada, credit scores range from 300 (lowest score, or just getting started) to 900 points (the highest possible score). Canadians average in around 650, which qualifies them for standard loans. Drop any lower than that, and you may have trouble qualifying for new credit. With the average credit score in Canada on the sub-prime brink (a customer who can't qualify for prime rates), credit applications can be a frustrating, time-consuming and sometimes demoralizing process. Fixing your credit rating may feel insurmountable if your score sits below the average. How do you rebuild credit when you're told over and over that the best way to build your credit is to have revolving credit, which is hard to get with a low score?


For those with stellar credit scores, walking into a bank, other financial institution or dealership in pursuit of an auto loan is relatively low-stress. If you're among the Canadians with low or no credit history, it just isn't that simple. You want a decent vehicle with payments you can manage-easier said than done. The good news is, there are lenders who actually specialize in poor credit loans. They help people with bad credit get approved for a vehicle that fits budget and lifestyle needs. As you pay back a creditor, your personal credit history is rebuilt. To qualify for a low credit loan, a person has to earn about $1800 each month before taxes or deductions (i.e. CPP, EI, etc.).


    Here's what that looks like broken down in terms of income structures:

  • Hourly wage: At least $10.50 per hour for 40 hours per week, or equivalent
  • Weekly: At least $420 per week (before deductions)
  • Bi-weekly: At least $845 every two weeks (before deductions)
  • Twice per month: At least $900 twice per month (before deductions)
  • Monthly: At least $1800 per month (before deductions)

If you're still worried about qualifying, don't despair. Meeting these minimum requirements isn't necessarily an all-or-nothing scenario. You might be surprised to learn that some car financing lenders will even offer loan options to people who earn their income from government programs. Whatever your money situation may be, options do exist for obtaining loans from alternative lenders. If you're struggling with no or low credit, know that car financing isn't completely out of reach. Some tips for a stress-free path to financing a car with no or low credit:

1. Create a Savings Plan to Prepare a Down Payment

Start saving. A down payment on your future car loan will definitely increase your chances of being approved for financing. It'll also help reduce the total amount you'll owe on that overall loan. Down
payments help to lower your monthly payments, leaving you breathing space to deal with other credit owing (credit card, mortgage, student loans, etc.). That down payment might just be the factor that
helps you turn your financial life around longer-term. The more you can save, the easier it will be to make each of your payments on time. Open a savings account and get started!

2. What IS Your Credit Rating, Anyway?

It may surprise you, or it might not, but a great many Canadians have no idea where they stand financially. They don't know their current credit score, and an alarming number of people never even
glance at their credit card statements. If you don't have a clue where your own finances stand before applying for auto financing, it's a great idea to do some sleuthing. Know what's up with all accounts in
your name. Find out your credit score today by contacting TransUnion, Equifax or Credit Karma. Take a good honest look at the money you owe to all creditors, measure what you earn each month and start
budgeting. This will help you to determine the amount you can afford where a car loan is concerned. If you hate the b-word (budget), learn to love it to stay golden with your savings and debt management.
Having this information before you walk into a dealership or auto financing institution gives you an edge: you'll know exactly what you can and can't afford.

3. Shop Around for Lenders and Loan Providers

There are all kinds of lenders and loan providers out there-don't jump at the first one you see on the web. Buying a big-ticket item like a car demands preparation and research, and that includes the
financing end of things. Not as much fun as thinking about heated steering wheels and sunroof options, but it needs to happen. Plenty of auto loan facilitators offer help to low credit car buyers when it comes
to affordable and reputable financing, but all loans were not created equally. Compare terms among various lenders and see which company offers what you need. The number one priority is to keep it
manageable. Do your pre-dealership research until you find loan providers that specialize in subprime lending. They have the best access to legitimate lenders with the best rates and terms.
With clear knowledge about your financial reality in hand, and with a sufficient amount of advanced research done regarding your financing options, there is no reason why you can't obtain a car loan in
Canada. It may mean that you need to save for a little longer for a down payment, but your patience will be rewarded. If life's demands (location, employment, family needs) require you to obtain a reliable
vehicle sooner, seek out a specialist who understands no to low credit and be honest about what you need and what you can manage.

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    Privacy Statement

    As a valued customer, we want to ensure that your private information is kept private and only shared with those companies that are authorized by yourself or that are allowed or required by law. This document explains our privacy policy, gives you reasons why we ask for the type of information we do, and if we do reserve a right to share information with non-affiliated third parties, lets you "opt-out" of our reservation to do so. Please take a moment to read this entire policy.

    Collection of Information
    The purchase of a motor vehicle requires considerable accumulation of non-public personal information. For example, if we sell or lease you a vehicle—extending credit to you at your request—we will receive information from you in order to determine your creditworthiness. We may also obtain information from a credit reporting agency. We may also obtain information from third parties such as employers, references and insurance companies.

    Some of the information we obtain from you may be required by provincial or federal agencies, such as the Department of Motor Vehicles or the Canada Revenue Agency. This information may be required even if you were to pay cash for your vehicle. Examples would be a driver's license or social security number.

    Protecting Your Information
    We safeguard nonpublic personal information according to established industry standards and procedures. We maintain physical and electronic safeguards that comply with provincial and federal law. We restrict access to non-public personal information about you to those employees and outside contractors who need to know the information to provide goods or services to you. We prohibit our employees and agents from giving information about you to anyone in a manner that would violate any applicable law or our privacy policy.

    Information Sharing
    Unless we have indicated our desire to share your non-public personal information with non-affiliated third parties (by checking the box in the section below), we share information:

    A) For everyday business purposes, such as to process transactions, maintain account(s), to respond to court orders and legal investigations, or to report to credit bureaus.

    B) For the purposes of processing a sale or lease transaction at your request or authorization, such as submitting information to third party financial institutions that may be requested to take an assignment of the contract, or verifying insurance coverage information.

    C) When using outside service providers to help us provide you with products and services. Before providing information to our service providers, we enter into contractual agreements prohibiting them from disclosing or using the information other than for the purpose for which it was disclosed.

    D) With "Affiliated" companies. Companies that are affiliated with us include any company that controls us, any company that we control, or any company under common control with us.
    I am interested in purchasing or leasing a vehicle and request that my Consumer Credit Report be obtained, at no cost to me, in order to help determine the types and extent of financing which may be available to me.

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