Are you finding it a challenge to get a car loan? Perhaps your financial situation did not bode well in the previous years, preventing you from buying a car. Even though your finances have improved, your credit record is still has more than enough room for improvement.
If you live in Toronto, Ontario, you are not alone. The city itself currently has a $4.4 billion debt, although it is gradually paying it just like every other citizen. Although you may encounter difficulty trying to get financing for a new car, there is a possible solution: a second chance loan. Here are four pointers you should know about the loan before applying for one.
What the loan is
A second chance loan is exactly what the words say: being given a second chance to get a loan. This loan caters to people whose credit histories do not allow them to secure normal car financing. With this type of loan, you are able to get financing while you are repairing your credit.
How to qualify
You have to be at least 21 years old to qualify for a second chance loan. Naturally, you need a driver’s license as well. You also have to be gainfully employed for at least six months, and you must have a yearly income of $21,000 or more.
What to expect
There are high interest rates or monthly payments; however, a reputable dealership of used cars Toronto Ontario residents trust tries to give the most reasonable yet affordable one. Rates mainly depend on the equity position of the loan and your credit history. You may be asked to have either a co-signer with you or some kind of collateral as your commitment to pay your dues on time. The better your financial state, the better your chances of being approved.
How to apply
You first fill in a loan application form with any dealership of the used cars Toronto Ontario locals prefer. Your application is going to be reviewed, and you may even be questioned. The important thing is to show you are ready, willing, and able to pay your loan timely and fully.
If you truly want to get a car, you still have an opportunity despite a less-than-ideal credit situation. Fortunately, there are various dealerships for used cars Toronto Ontario has that offer second chance loans, providing assistance to ensure you get the best terms. You can read more about second chance loans at CreditSmartCanada.com.
Second Chance Loan Basics: 4 Things You Should Know