What is a car loan?
Taking out a car loan to buy a car means that the lender purchases the vehicle for you and gives you the opportunity to pay the full price over a period of years. In exchange, by paying interest each month, you compensate the lender services. Car loans in Canada very often use simple interest, which is calculated only on the principal and doesn’t compound increasing your balance.
It is also important to remember that the amount that will be paid each month may vary. The reason for this is that some car loans are paid down through amortization. In this case, you always pay more at the beginning than at the end of your car loan.
What are the most common types of car loans?
Simple Interest Loan: the interest rate is based only on the outstanding balance, and that gives the borrower the option to pay more than the standard monthly payment and thereby save on interest cost.
Pre-Computed Loan: all interest and principal payments are negotiated between the borrower and lender before the paperwork is signed. Payments are pre-calculated in advance, which excludes the possibility of early repayment.
What are the minimum and maximum terms for a car loan?
Most of the car loans in Canada are structured with 12-months increments. They last somewhere between two and seven years. Thus, depending on whether you are planning to buy a new or used car, you’ll find available loans between 12 months and 84 months. The average used car loan lasts between 36 months to 48 months, while the average for new car loan lasts between 60 months to 72 months.
What is better: Short-term car loans vs Long-term car loans?
There is no clear answer which type of car loan is better. Everything depends on the personal preferences of each borrower. A long-term car loan comes with an increased interest rate, meaning that your monthly payments will be lower, but in the end, your total loan cost will be higher. On the other hand, with the short-term car loan option, your monthly payment will be higher, but will also come with reduced interest and total overall credit cost.
What is the difference between a secured and unsecured car loan?
A secured car loans mean that the borrower offers the lender collateral or assets to secure the loan. In most cases, the car itself is used as collateral. Unsecured loans are the opposite, with no assets to recover in the event of default and with a higher car loan interest rate.
How it Works
Why choose CarLoans411?
Our customers choose CarLoans411 because we’re the most trusted and experienced company in Canada. We’ve helped thousand of Canadians including those with bad credit and no credit, find affordable cars, vans, trucks or SUVs.
Where is your office located?
You can find our main offices in Toronto, Ontario and Vancouver, British Columbia. We offer our services to hundreds of Canadian cities in all provinces, and it is more than likely that we have car dealer partners located near you.
How much will it cost me?
Our application process for the car loan is absolutely free! We work hard to provide you with the best service, guidance, and options available. You don’t need to commit to anything until you’re ready and have found a plan that suits your needs.
What kind of personal information do you need?
We ask our customers only for the information that we need to help you get approval, including basic information (first name, last name, date of birth), your location and financial circumstance. We do not ask for SIN # or anything too personal.
Do you take trade-ins?
Yes, of course. It’s possible to use your trade-in as a down payment or to help lower your monthly payments for a new or used car.
What are your terms and conditions?
You can find our terms and conditions here
. Terms can vary for each person depending on the type of information from their application.
Application and Approval
What are the minimum requirements?
You must be of legal driving age in the province that you reside in, and be a permanent resident in Canada. You also need to be employed for 3+ months, and make at least $1600/month.
How much money do I need for a car payment?
We have many $0 down options to suit your financial needs, and we do not require a down payment to get you qualified. Although, a down payment will decrease the amount you borrow and can shorten the loan’s term.
Do I have to do a credit check?
Yes, we’ll need to do a credit check for further processing of your application.
How much auto financing can I qualify for?
We understand that everyone’s financial situation is personal. After your application has been submitted, your dedicated dealer representative will contact you to discuss how much financing you qualify for. They’ll help you find the best solution to accommodate your average monthly budget.
Can you help me, even if I’ve been turned down for a car loan before?
Absolutely! Our partners have years of experience helping people get auto loans in Canada even if they have been turned down before, regardless of the reason.
How long does the process take?
You need less than three minutes to fill out our application. After submitting it, you’ll be matched with an experienced local dealership who’ll contact you as soon as possible. Depending on the day, it may take up to 24 hours for our partners to be in touch with you.
Can we be reached over the phone?
Our team of experts will be happy to answer any questions you may have. You can contact us at 1-855-712-LOAN (5626) from Monday to Friday 9 AM - 11 PM (EST) and from Saturday to Sunday from 9 AM - 9 PM (EST).
Vehicles and Payment Details
Do I get to select the car I want?
Yes, after matching you with our local partner, they’ll contact you to discuss which vehicles are available and assist you in picking the best for your needs and budget.
Where can I view your inventory?
- We have partnerships with hundreds of dealers across Canada, so we can’t provide you a single inventory with all vehicles since the choice is huge! Once you’ve completed the application, our partner will give you the access to their inventory and pick the vehicle that works for you.
What types of vehicles do you have to offer?
We provide car loans to virtually all types of vehicles including cars, vans, trucks, and SUVs. The choice may differ depending on the dealer.
What are the interest rates?
We don’t provide financing to the borrowers, so we can’t maintain average car loan interest rates. It will be calculated for each person based on several factors, including the term and amount financed.