Updated: May 26, 2020
Looking to get approved for a car loan in Canada, but feeling overwhelmed with all the information that's out there? You are not alone. The process of buying a vehicle can feel incredibly daunting if you are new to the process. At Ribit, our goal is to help you to skip the hassle of wading through the boatloads of information, and get you to the fun part – driving away in your new vehicle!
So what exactly are the basic ins and outs of getting approved for a new vehicle in Canada? While the information isn't always easy to navigate, being familiar with a few key pieces of information can actually improve your chances for approval. Here are some things you need to know before moving forward in the approval process.
How do I get a car loan?
The first step to getting a loan for a vehicle is getting approved with a lender. This process can happen through a few different sources. You can apply directly with the dealership who will help you to fill in your application and submit it. Getting a car loan through a bank is an option too. However these two options tend to require multiple in-person meetings which can be inconvenient, and predominantly cater to those who have higher credit scores.
At Ribit, we offer a more convenient and flexible approach, helping you to fill in your online car loan application and get pre-qualified through our trusted network of lenders. These providers are better equipped than banks and dealerships in helping those with lower credit scores. Once your application has been approved, we'll connect you with the very best deal on your your dream ride.
What's the minimum credit score required?
While most pre-approval companies will tell you that they guarantee approvals regardless of your credit score to get you in the door, this is quite frankly not entirely true. In cases where the credit score is 650 or higher is the approval process is very straightforward. However, if your credit falls on the lower side, this doesn't at all mean that you won't be approved. There are other factors that come into play such as your income and the unique preferences of the provider. While in 99.9% of cases we will have the flexibility to get our clients approved, there are times when the terms are considered too steep to accept. If this ends up being the case for you, the Ribit team will walk you through the alternative ways of making it possible for you to qualify for better terms in the near future, such as increasing your credit score, saving for a down payment, or finding someone to co-sign.
How are my monthly payments calculated?
Your monthly payments are determined by a few different factors, including your credit score, your down payment, the type of vehicle you require, and the duration of your loan. To get a feel for what you might expect for your monthly payment, check out our free online car loan calculator.
What kind of information will I need to provide?
While requirements tend to vary between lenders, here are the most common things you can expect to provide:
Government issued ID
Must be the age of majority in your province or territory
Proof of Canadian residency
Proof of income
Proof of car insurance
Written consent to a credit rating check
Can I get approved while on EI, disability or social security?
When it comes to car loan approvals it is all about affordability. As long as we can show that you can make your monthly payments, we can get you approved for a car loan even when you are on EI, disability or social security in Canada. It's important to work with a service provider like Ribit that specializes in low income car loans. When applying, you will be asked to provide your proof of income from EI, social security or disability.
Can I get a car loan if I am a student?
Yes there are a variety of ways to get approved if you are a student. If you have a source of income, like a part-time job, this will certainly help. Other ways that can increase your chances are saving for a larger down payment, building your credit score, and getting help from a co-signer.
Can I renegotiate my rates later?
In short, YES! Renegotiating your rates after some time has passed making your payments and building your credit, is highly recommended. When you work with Ribit, you are assigned a representative who will work with you to make this happen. We'll even send you a reminder when it's time to renegotiate so that you don't miss out on getting your rates reduced at the earliest possible opportunity.
Get approved for a car loan in Canada today!
No matter what your current financial situation looks like, we are committed to helping you to get to where you want to go. Ready to apply? Fill in our quick and easy online car loan application. It only takes 5 minutes!