Most of us in Alberta rely on our cars as our primary source of transportation. In a growing city like Edmonton, we need a way to get around the vast land of our province. At the same time, in recent years, the global economy has struggled and many people have found themselves out of work. As a result, many Albertan’s have found themselves unable to pay off their bills or to pay them on time. This can cause marks on our credit score which can harm our ability to gain credit in the future. For instance, if you need a car loan but have bad credit, you may be worried about how to find one in Edmonton. Not only will you be worrying about the level of interest you’ll have to pay but you may even worry if you’ll get approved all together.
What does it mean to have bad credit?
Across Canada, credit bureaus log information about our credit history – our ability to pay off our obligations on-time and quickly. There are a range of factors that companies use to decide if they should approve your request for a car loan in Edmonton or not. This includes the vehicle you selected, information included in your credit file, applicant information such as employment and income data and the down payment you’re able to make. If you have bad credit, this is typically related to your credit history – where you have exhibited a pattern of missing payments or paying off your debts late. Loaning you additional funds can be deemed risky if you haven’t taken your financial commitments seriously in the past. At all costs, you should try to avoid falling into the “bad credit” category as it will provide you with fewer options when it comes to financing a car.
That being said, in this day-and-age, bad credit loans in Edmonton are still available. You should be prepared that you may have to payer a higher interest rate than those with better credit ratings. However, you should still be able to get approved.
Here are 3 pointers on how to find a car loan in Edmonton even if you have bad credit:
#1 – Knowledge is power
First and foremost, you should not assume anything about your credit status. It is important to know where you stand before you hit the auto dealership. Although car dealers are itching for your business, they also want to make as much money as they can from you. In Edmonton there are plenty of car firms that are offering 0% financing but typically this only applies if you have a very good or excellent credit rating. The best thing to do so you can set your expectations correctly is to get a copy of your current credit score. If you find out that you do in fact have a bad or poor credit rating, at least you can take the right steps to lower the annual percentage rate (APR) that’s offered to you. Also, if you don’t absolutely need a new car, you can also try to improve your credit score before you go into the dealership. Since credit scores are assessed every six months, you’ll have the opportunity to improve this before you seek out more credit for a new car.
#2 – Build up a down payment
Since many of us in Edmonton drive a lot, some of us just need a new car. First of all, you may not have a car now and need one to get to work; your existing vehicle may have broken down or your current car doesn’t satisfy your needs anymore. If you have bad credit, you should look to save up as much money as possible to reduce the amount of money you need to borrow. This will help you in getting approved and will help you reduce your payments over time. Remember that the more you ask for, the more you’ll have to pay every month. Since you’re likely to have a higher APR since you have bad credit, every dollar you put into a down payment will reduce the amount of interest you pay on it as well.
#3 – Shop around
One of the best aspects of looking for a new car – bad credit or not – these days is the range of options you have. You can compare car loans online and can also comparison shop on actual vehicle prices there too. Take the time to look online first even if you plan on buying your car at a physical dealership. Again, knowledge is power and knowing how much credit you should be able to get will help you when you’re negotiating at the dealership.
Remember that there are always options – even if you find yourself in a bad credit situation. Car loan companies in Edmonton realize that times have been tough in recent years and are developing ways to help. Consider these 3 points as you look for your car loan in Edmonton.