When you buy a
car in Canada, it’s important to know what the cost of the car loan is going to
be. There are a lot of factors that go into the cost. Knowing how you can alter
those factors can be advantageous to get the best possible deal.
Know the Factors
A variety of
factors will be used to determine the cost of your car loan. While you may not
be able to do anything about the interest rate that a lender will give you, there
are plenty of other things that you can control.
The first thing
to look at is the cost of the car itself. Over the past few years, new car prices have
skyrocketed. You will want to be cost-conscious of what vehicle you get. If
there is the opportunity to take advantage of rebates and incentives at the
dealership, you should do so.
lenders will provide you with different interest rates and terms. Buying new
versus used will impact these terms. For example, short term loans are more
commonly offered with used cars, though the APR is going to be higher. Knowing
the pros and cons of each will allow you to decide whether you want to buy a
new car versus a used one.
You also need to
know what your credit score is. When you have a better credit score, more
lenders are willing to work with you. This is because you have proven that you
are financially stable. More lenders will be ready to take a risk by offering
you a higher car loan and reward you with a lower interest rate. If you have a
low credit score, certain lenders may not be available to you. Additionally,
you may have to pay a higher interest rate as a penalty.
you have a low credit score, you will want to do everything you can in order to improve your credit score prior to
applying for a car loan. There are a number of ways to make some improvements
in the span of 3 to 6 months.
Be sure not to
make any new applications. Filling out credit card applications can drag your
credit score down because it makes you look desperate for credit.
Pay off any
small balances and close the accounts so that you don’t have too many open.
Also, be sure
that you make all payments on time so that you can show your creditworthiness.
Now that you
know what goes into a car loan, you can choose to compare rates so that you
know whether you’re getting a good deal or not. If you take the first loan
available to you, it may not be the best loan terms. By using a site to apply for a car loan, you can see
how different interest rates will affect your monthly payment.
power when it comes to getting a car loan in Canada. Knowing what goes into
your car loan will allow you to make adjustments in order to get better terms.