Don’t give up on finding a car loan if you’ve got a bad credit score. We speak to Cody Green from Canada Drives who tells us there are still a number of options for people who need a car loan but are finding it difficult to secure one from their bank or car dealership.
In life, it is inevitable that at one time or another we will need to borrow money to make purchases that enable us to pursue certain financial goals. However, what do you do when you have a poor credit score and are denied repeatedly from banks or other financial institutions for a car loan you so desperately need?
What many people don’t know is that there are actually companies that do provide loans to individuals with poor or even bad credit. Where these companies differ to banks or car dealerships are that they take into account the personal situation and address the credit needs of the individual on a case-by-case basis.
After recently speaking to Cody Green from Canada Drives, he helped shed some light on what options are available to borrowers with less-than-stellar credit scores. Also, he talked about the challenges people with no credit history can have – whether they are new to Canada or just starting out – and how they can obtain the car loans they need.
“A good portion of Canadians are having trouble these days buying the car they want at advertised 0% financing rates,” Mr. Green highlighted. Car ads help us shop around and build an idea of what we may want in a car but it also may set our sights too high on what we can afford. Typically only the individuals with the highest credit scores will be eligible for the 0% financing rates. When a credit situation takes a downturn, it’s often not just that people may have fallen into a poor credit situation due to bad financial behavior. Green mentions that most Canadians fall into this situation “due to being new to credit, going through a bankruptcy or finding themselves in credit issues following a divorce.”
Educating the Canadian Public
In our conversation, the one thing that came out the most was that many people with bad credit feel like there’s no hope and they won’t be able to secure credit at all for a car. This lack of awareness is one of the industry’s biggest issues and the reason why companies like Canada Drives spends most of their time focusing on education. Green notes that alternative sources of financing are available and even if you have bad credit, you are still likely to find a lender who will approve you for a car loan.
As a result, his company dedicates time educating clients about their options; he reiterates that “people think of it as all or nothing.” Maybe they think “I’ve made a mistake, so I won’t be able to get an auto loan”, and this is a very common misconception of many car loan seekers.
Building up your Credit Score
Not only can you look to other loan options to get the financing you require, these programs are also typically set up to help individuals who are struggling with credit issues to take the necessary steps to restore their credit history. Additionally, Green reinforces that Canada Drives offers this support to their customers as part of their company’s loan program.
In fact, many bad credit loan borrowers have been known to improve their credit by demonstrating that they can be consistent when making loan payments in the future, after securing their vehicle financing. “Setting up installment payments can really help to demonstrate that you’re able to pay on-time and that you’re meeting your commitments,” says Green. Installment payments are looked on quite favourably by credit agencies and lenders. Best of all, setting a monthly payment can also help you budget for the expense so you can plan ahead for the payment, making sure it’s paid every month on-time.
Do I Qualify?
“This is the first question asked by many of the people who contact us and the best way to find out is to initiate the process,” says Green. The process at Canada Drives starts with the easily accessible online loan application. On the company’s website, potential borrowers can apply for a loan and receive notice of their approval status, in only a short amount of time. Utilizing these online platforms can be very beneficial to borrowers, who want to avoid the hassle that they perhaps may encounter from going through the approval process at a financial institution.
Canada Drives doesn’t provide the actual loan but seeks out loans on your behalf from a range of lenders across Canada. This helps you reach a wider range of lenders in a fraction of the time. Once contacted by an affiliated lender, they will guide you in the right direction to determine how much you should be aiming to borrow and through the overall application process. Once approved, you will liaise directly with the lender throughout the course of your borrowing relationship.
What about the Interest Rates?
This is obviously a big question for those of us with bad credit – if banks and car dealerships won’t lend to us, what will we have to pay to get the privilege? Green suggests that “there is no general answer to this question” as most lenders will look at each individual situation and determine, how much credit should be available to them. They’ll also look at how much the individual is putting towards the vehicle a down payment, as well as the specifics of the loan agreement, including the length of the term. This is an important factor of the loan parameters, as it is tied to the amount of interest that an individual will have to pay over the term.
With that being said, Green also mentions that sometimes consulting with an alternative lender can mean that borrowers can qualify for financing that are even better than the banks will offer them. While this may sound surprising, it’s true and shows that finding the most alternatives can often be beneficial when it comes to large-scale purchases like a car.
Most Canadians require the use of a vehicle for a variety of reasons, whether to get to work or to run personal errands. Cody Green and the Canada Drives team sound committed to helping Canadians secure car financing for these day-to-day needs. Green’s work in helping individuals get a car loan and also in getting their credit scores back on track, serves a benefit for everyone on the path from poor to positive credit.
About Canada Drives
Canada Drives works with local dealerships from Coast-to-Coast to ensure that every customer regardless of bad credit or no credit has access to the auto financing they need. They have helped thousands of people from across Canada get driving the vehicle they deserve while maintaining the highest commitment to security, privacy and customer service.