Whether it is brand-new or used, getting a new car can be exciting. What’s not exciting is another loan payment. The realities are, most people will need a car loan. In this article, we are going to help you find a car loan with low monthly payments. We’ll share with you car loan lenders and discuss the types of car loans available.
There are so many things you have to think about when buying a new vehicle. First off, you need to research to find the right car for you. There are factors to weigh up, and one of the most important factors is the price and how you plan on paying for your new car.
If you’ve decided to go with a car loan, there are yet more decisions to make. Your budget for monthly payments (see car loans calculators), your down payment amount, together with the loan’s length, will determine the amount you can borrow. Part of making that decision will include looking at lenders and interest rates.
Everyone’s situation is different. The right car loan, lender, and interest rate you go with might not be the best for someone else. To help, we’ve found some of the best lenders that will help make car payments affordable. We even have sources for bad credit car loans too.
Low Interest Rate Car Loan Lenders
Canada Drives is an excellent lending option. Their website helps you find the right car loan for you. Factors they assess include your down payment and the type of vehicle you want. Other information they factor into the quotes is trade-in value, your budget, plus credit score. Other neat website features include live chat with a representative. They also have a visual inventory section.
Canada Drives offers annual percentage rates (APR) that vary between 0% to 30%. Factors like “new versus used” and credit score will affect the APR. Car loans are available from $5000 to $75,000. Car loan terms range between 12 months and 96 months.
Canada Drives started up over a decade ago, back in 2010. They have over 1,000 reviews and sit at an 8.8 rating with TrustPilot. You are bound to find the lowest interest rate available through this company.
CarLoans411 is the perfect place to go if you have no credit or bad credit, and you are looking for a car loan. It (pretty much) guarantees approval. A right choice for those with bankruptcy in their credit history. It also makes the perfect option for younger adults and new immigrants to this country.
Their fixed and variable rates vary depending on your financial status. They do not disclose the rates range on their website. The good news is that they have dealership partners all across Canada.
Car loan terms last anywhere from 12 months to 84 months. Much like the other companies listed, you fill out an online application. Personal information like your address, date of birth, and phone number will be required. Monthly income and housing costs are also needed to assess your loan options.
Once you submit everything, someone from CarLoans411 will call you to discuss lower interest and other options. You don’t require down payments or credit scores. With that said, all applicants must make at least $1,600 monthly.
Car Loans Canada
For over 10 years now, Canadians have relied on Car Loans Canada. They are a favourite thanks to their car loan low interest rate for a loan. One major plus is their pre-approval process. They have a huge network of dealers and lenders.
They have a form online that you can fill out. After submitting it, the company’s network presents you with a list of nearby dealers. They also provide a variety of pre-approved financing choices when it comes to a certain type of car.
They offer fixed interest rates from 0% to 29.95%. Meanwhile, their variable interest ranges from 3.95% to 8.95%. Their car loan terms are from 36 months to 72 months. You can get pre-approved right away after filling out the quick online form.
Car Loans Canada allows you to choose many options for vehicle loans. This makes it so much easier to set up your car loan. It also helps make sure you find the lowest interest rate possible for your car loan. They also can help out those with past bad credit or credit score issues. Previous loans such as a credit card you defaulted on can come back to haunt you. If you need a car loan and have bad credit from being late paying your credit card, you still may get a loan. Car loans/ low interest rate and other perks may not be an option with bad credit. Still, it is best to shop around for your auto loan.
LoanConnect offers you a wide range of lenders that will approve you for a car loan. You fill out a quick online application. Once submitted and reviewed, they will connect you with pre-approved car loan lenders.
LoanConnect offers car loan terms that range from 12 months to 60 months. Both fixed and variable rates are between 4.8% to 36%. The good news is there are no minimum credit requirements. Many LoanConnect clients have reported they received their car funds within 24 hours.
Canada Auto Finance
You can get pre-approved for a loan in seconds. All you have to do is fill out an online application. Canada Auto Finance links you to an authorized dealer in your area. You can also finance a private sale through their website. They offer other options like refinancing a current car loan. You are also able to arrange to finance with a non-network dealer.
The company positions itself as an alternative for those with bad credit. So, it is no surprise that you can only finance $5,000 to $45,000. Fixed interest rates range from 4.90% to 29.95%. Their variable loan rate is undisclosed.
There’s a good chance that you’ll pre-approved, even without a co-signer. Other things not needed are a down payment or a SIN. There are no application fees linked, as well. If you have a credit score of 625+, you should qualify. With that said, a monthly income of $1,500 is required.
Different Types of Car Loans
In Canada, there are a few different types of car loan options. We believe using the lenders and web portals we’ve suggested will give you the largest range of quotes, but there are other loan options to consider.
One is to arrange a loan through a car dealership. Another is to obtain either a credit line or a car loan from a financial institution. Then, there’s always the option of leasing.
A majority of car dealerships organize loans for you, directly with the lender. You can receive a loan right at the dealership. Your sales rep will help you with the application form. However, naturally, there are limited options, and they don’t offer loans for applicants with bad credit.
Dealers arrange car loan financing with one of the three below options:
- a financial institution (i.e. credit union or bank).
- the manufacturer’s finance division.
- a finance company that’s independent. potentially one that focuses on car loans.
If you don’t feel like going through the dealer, you can go through your own bank. Depending on the amount of the vehicle, you can either apply for a car loan or a credit line. You may be able to get a low interest rate on a loan. With that said, credit lines tend to offer the lowest interest rates.
If you have a great relationship with your bank, you might be able to negotiate a better interest rate with them. This may be easier than negotiating with a car dealer. Although there are times that dealers offer 0% rate promotions. It’s important to shop around. Even for low-interest rates!
There’s also the option of leasing. However, it’s not a form of financing. Think of it as a long-term rental. You still make regular payments to your vehicle. Leases generally last from about 3 to 5 years. When the lease ends, you can either buy out the car or give it back to the dealership. Buy-out amounts vary, depending on the condition of the vehicle. Interest rates are linked to leasing contracts and arranged through the car dealer.
Lease payments tend to be lower than car loan payments when terms are comparable. Still, there are extra fees that might be required. These include fees for potential damage to the vehicle. Plus, you pay fees if you go over your specified kilometres.
The Bottom Line
Buying a car is a big step. It may be your first vehicle or an upgrade. Regardless of your situation in life, research is needed.
“Shopping around” when it comes to a new vehicle isn’t linked solely to the car itself. Sure, you have to look at dealership promos and sales. You want your monthly payment as low as possible. But another major step is researching low car loan rates.
There are many factors that are considered when a car loan is offered. Your credit history and credit score are two of the most important factors. It can be time-consuming and frustrating. That’s why some of the car loan portals we’ve recommended work well. You input the information once, and you get a variety of offers to consider.
Those with bad credit are offered higher rates. Meanwhile, those with a good credit score are eligible for lower rates.
Remember, the lower the rate, the lower the monthly payment. At the end of the day, when you buy your car, you want to enjoy it. Not stress over the car payments each month. Try out the lenders and search engines we’ve recommended in this article. It will make life easier, and fingers crossed, you’ll find the perfect loan for you.