When you’re in the market for a new car, one of the first things you’ll need to consider is how you’re going to pay for it. For many people, that means taking out a car loan. But before you start shopping for your new ride, it’s important to understand how car loans work. The interest rate on a car loan is determined by a number of factors, including your credit score, the length of the loan, and the current market conditions.
83 percent of Canadians own or lease a vehicle, and 81 percent of car owners felt it would be “impossible not to have a car.”
https://www.autoevolution.com/news/study-shows-most-canadians-own-cars-have-no-plan-to-ditch-them-water-still-wet-179532.html
There comes a time in everyone’s life when they really have to think about their credit score, especially if they’re looking into taking out a loan to finance a car. Your credit score is a contributing factor of your loan when looking to buy, repair, or upgrade your car.
“What should my credit score be to finance a car?”
“What is a good credit score for a car loan?”
These 2 are the most common questions we get, so we’ve decided to help you in this article. The good news is that it’s not that difficult to figure out, and there are a lot of options for you depending on your credit score.
Everything you should know about credit score for car loan
Why does the credit score matter?
Your credit score is determined by how diligently you pay your bills, keep your credit card balance within limits, and how often you apply for credit. In the simplest terms, your credit score shows how reliable you are in the eyes of dealers (to finance your car) or lenders (to give you a car loan).
What is a good credit score for an auto loan?
If you’re thinking about what is a good credit score to finance a car, here’s the answer: 660 or above, according to Equifax. If you’re around that range, most of your car loan applications can be accepted effortlessly.
According to the same source, if your credit score is between 725-759, it’s considered very good. Anything above that (725-900) enters the realm of excellence in credit score. As you can imagine, the better the credit score, the more beneficial the deal will be for you.
A well-managed and well-maintained credit score (good, very good, or excellent) will allow you to set foot onto a dealership’s floor and instantly have everyone trying to be at the top of their game to get you to buy your dream car from them.
There are some great options out there, but we can’t help but recommend Symple Loans’unsecured personal loans. Rather than taking out a loan that puts your vehicle up as security or locks you into a fixed term, you might just be better off with an unsecured car loan that you can pay back any time without fees or penalties.
To get the best value for your money, you can always go for faster, easier AND affordable loan options to finance your car, like Symple Loans.
What if you have a lower credit score?
If you’re a (permanent) resident of Canada wanting to get a car loan, you should know this: you’re actually not required to have a minimum credit score to get a car loan.
However, here’s what you should keep in mind:
- You have to find lenders that are willing to help
In Canada, there are several lenders who will help you get a car loan that fits your needs. LoanConnect partners with Canadian lenders such as Symple Loans, to provide their customers various options should they not meet their lending criteria. With this option Canadians have a variety of ways to finance their vehicle purchase or have the funds for major repairs.
- Higher interest rates
Lenders will consider that they’re taking a risk on you if you have a below-average credit score, so the less trust there is, the higher the interest rate.
If you want to get an idea of the possibilities you have with Symple Loans, check out our calculator to get a personalized rate in 2 minutes. You might just be pleasantly surprised.
What can you use your car loan for?
Once you get a loan, the fun begins!
With Symple Loans, for example, an unsecured car loan can be used for a lot of things, from down-payments to vehicle repairs:
- Buying a new or pre-owned car,
- Refinancing an existing car loan,
- Paying out a lease,
- Car maintenance and/or upgrades.
Well, there you have it! You now know what your credit score should be to finance a car, as well as the great options you have for car loans.
Use the Symple Loans Quick Quote to determine your loan rate, Apply Quickly and Easily Online, Get Approved, and DRIVE.
With Symple Loans, you can borrow up to $50,000 for your next auto purchase, choose loan terms up to 7 years, and have the flexibility to pay off the balance at any time without fees or penalties.
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