By John Hayden
Bad credit is a major issue when it comes to securing car loans, and the reason is obvious. People with low credit scores in most cases won’t be given loans by lenders due to the risk involved in paying it back.
For this type of situations, a cosigner with a perfect credit score and a steady income is required to sign in as an assurance that the loan will be paid off if the borrower fails to do so.
So, what do you do if you have a bad credit score, can’t get a cosigner to vouch for you and want to get a car loan?
It’s challenging to get a loan in Canada if you have a bad credit score and can’t get a cosigner. Here are a few tips that can help you secure a car loan without a cosigner.
Review your credit report
Study your credit history to know if you are eligible to obtaining a car loan. A credit score below 500 is unacceptable by most -if not all lenders unless you provide a cosigner. An alternative to this is to search for lenders that work more with poor credit borrowers. Such lenders will have better options for you than regular ones.
You should also consider building your credit score. This isn’t as easy as it sounds, but it’s not impossible. Consider taking secured loans –this should help you build your credit score faster than conventional loans.
Make a bigger down payment
Getting a loan without a cosigner looks bad to lenders, but a bigger down payment can change their mind. If it takes you two jobs to save up enough money to make a significant down payment, then do so. The bigger the down payment, the better it is, as this will guarantee lenders that you will pay back.
Income matters
Most auto loan companies that don’t ask for a cosigner will need proof of your income before you qualify for a loan. Your current paycheck and the amount of money in your account can get you a loan without a cosigner. The minimum required is an income of $10.50 per hour, $1800 per month and $21600 per annum.
Lastly, it is crucial that you remain sincere when filling out auto loan forms. Lying will only make matters worse if you’re caught.
Remember – there are millions of Canadians in your exact situation! Not everyone has established credit or family and friends who are willing to cosign. Review your personal credit report, save your cash and find the best lender before agreeing to any terms.
To get more information about obtaining a car loan without a cosigner do fill the form below and we will help you get started in owning your dream car.
