Several Canadians with bad credit or no credit score often face a difficult time getting approve for a loan. But you can avoid such problems as many new opportunities are on the horizon when it comes to bad credit car loans. There are lenders and car dealerships that help bad credit customers by providing them required funds. Here is explained in detail how you can get a bad credit car loan.
Are you thinking of borrowing money from major banks, credit unions or traditional lenders? Well, it is obvious that in this case your credit history is important.
Whether you are seeking a loan, buying a car, or applying for a mortgage, your credit score will determine whether or not you’ll get approval at crucial moments in your life. But if your credit score is bad, don’t worry, you can improve it. And in the meantime, you can still get help from other lending institutions that provide financial help to people even with bad debts.
Why People With Bad Credit Struggle To Get Approval For A Loan?
- Credit score
The credit score in Canada ranges from 300 to 900 points. A good credit score will definitely help you qualify for a loan from every institution. However, any score below 660 can make it challenging to get approve for a new loan.
It depends on particular institutions what average credit value they consider and a score below it will make the entire process frustrating for many people.
It may seem next to impossible to repair your credit when your credit is already bad. One of the best ways to rebuild your credit is by making regular payments on a loan to make lenders feel that you are reliable. But here’s the kicker; it is difficult to get approve for a loan because you don’t have a good credit and thus will not get a chance to prove it.
Having a great credit score means that you can simply go to any institute and get approve for a loan without any fuss.
But when banks say “no”, there are still easy ways to get money. There are lending institutions who specialize in helping people with poor credit, and they can help you get approve for a vehicle title loan that best suits your needs. With a bad credit car loan, you’ll not only get required funds, but also has the opportunity to recreate your credit history.
Some lending institutions also look at factors other than your financial history, such as your income. Typically, the minimum income for a person to qualify for an auto loan with a low debt is $ 1,800 each month before tax or deduction.
It is not necessary to meet the minimum income requirements to qualify for a car collateral loan. In fact, some lenders will also work with people who earn less than the required number and even with those who are in between jobs.
Things To Consider When Applying For A Car Collateral Loan
Here are few tips that can help you get approval easily even with the two points mentioned above.
If you prequalify online for a loan then it will not take more than 2-3 hours to get approval, the only condition is that you should complete their requirements. Now let’s have a look at the requirements of lending institutions for an auto title loan.
You can apply for a title loan if you have a fully paid for vehicle and it should not be older than ten years. A lien-free title paper is a must.
You should have a valid driver’s license. You have to provide a proof for legal age as per your respective province and also the proof of your permanent residence. Another thing that they need is the spare set of keys that work on all parts of the vehicle. Most importantly you should have a proof of registration and insurance of your vehicle in your name.
With these minimum requirements, you’ll proceed to the next step of vehicle inspection. The professional at the store will inspect your vehicle according to its working conditions and current market value. The equity is the maximum amount that you can borrow from the lending institution.
You may not be aware of the other benefits of getting money through this loan. You will get to use your vehicle even in the loan period. There are no prepayment charges for early payouts. Also, there are companies such as Bad Credit Loans Vernon that provide title loans at affordable and genuine interest rates. The monthly installments are so low that one can easily manage to pay them. The loan terms are long and can be up to 4 years.
After completing these requirements, you will get approval from the lender within no time. Then you can collect your money and drive away with your car.
This is all about title loans and it is up to you which option you want to choose to get required funds whenever you need.