The Canadian Need for Convenient Transportation

In Canada, convenient transportation is essential. For most Canadians, this means buying a car to get from point A to point B. Whether it’s a new SUV or a used hatchback, a reliable vehicle and affordable financing are crucial.

Applying for a Car Loan with Deal For Wheels

Applying for a car loan can seem daunting, but it doesn’t have to be. The key to a successful car loan application is meeting the necessary requirements. Here’s what you need to know about the most common car loan application requirements, whether you have good or bad credit.

Minimum Requirements

Regardless of your credit score, you need to meet these minimum requirements to apply for a car loan:

• Valid Driver’s License: Proof of a valid driver’s license is required.
• Age of Majority: You must be the age of majority in your province.
• Valid Source of Income: Generally, this means being employed, self-employed, or retired with at least three months of work history, preferably longer.

If a lender doesn’t require these, reconsider working with them as it might be a scam. All legitimate lenders, even those online or catering to credit-constrained consumers, have these minimum requirements.

Income Requirements

For those with bad credit, income plays a major role in the approval process. A steady income shows lenders you can afford a car loan. Most bad credit car loan providers require a minimum monthly income of $1,500 to $2,000.

Lenders also consider:

• Debt-to-Income Ratio: If your ratio is over 50%, approval may be difficult.
• Payment-to-Income Ratio: Car payments should take no more than 10% of your monthly income.

For good credit, income requirements may not be as strict, but lenders still need to know you can afford the loan payments.

Down Payment Requirements

Having a decent down payment is essential. A 10% down payment is a good start, but more is better. For poor credit, aim for a 15-20% down payment to increase approval chances and reduce the loan amount.

Credit Score Requirements

Understanding your credit score is important:

• Good Credit: A score of 650 or more is considered good. You can apply for a car loan at traditional lenders like banks and get approved at a good rate.
• Bad Credit: A score below 650 means you may need to work with lenders specializing in bad credit consumers.

Finding the Right Car Loan with Deal For Wheels

These are the common requirements for applying for a car loan. All lenders have their own approval processes and requirements. If you’re struggling with credit issues and need a new car, Deal For Wheels can help you find the right car loan to meet your needs.