Yes, credit scores and auto loan approvals are indeed closely related – and have significant impacts on financing conditions! For lenders – usually banks or reputable dealerships like Canada East Rides – your credit rating is a quick way to measure your creditworthiness. It’s a good indicator of your ability to settle your debts.
All About Credit Scores and Auto Loan Approvals
Here are some of the main ways that your credit score affects your car financing in Eastern Canada:
- Interest Rates: credit scores play a major role in how much you’ll pay over your car loan lifetime. Borrowers with higher credit scores (650 and up) are generally offered better interest rates, saving thousands of dollars over the years.
- Loan Terms: your credit record also determines your auto loan duration, as higher credit scores may lead to longer loan terms or smaller down payments. Riskier applicants may be limited to shorter loan terms with larger down payments.
- Approval Speed: a higher credit score steps up your chances of pre-approval. Lenders prefer applicants with higher credit ratings, as they are viewed as less risky.
- Monthly Instalments: credit ratings can define how much you repay each month on your car loan, as this figure depends largely on the amount borrowed, the loan duration, and its interest rate.
Better Credit Scores and Auto Loans in Nova Scotia
If you’ve hit a rough financial patch, don’t despair, because even people with lower credit scores can still find auto financing in PEI. However, you may face higher interest rates, with shorter loan terms, and higher monthly repayments. Improving your credit score takes a little time – and a lot of patience. This is why it’s important to monitor your credit score constantly. But if it drops for some reason, there are plenty of fast and easy steps you can take to boost your chances of buying your dream wheels under favourable terms. Your aim should be to build up a positive credit history. This takes time, but it can save you thousands of dollars over the years. A good start is to take out a secured credit card and make every payment on time. In fact, simply paying your bills on time is the secret to a good credit record. Late or missed payments can have significantly negative impacts down the line, particularly for credit cards, utility bills, mortgages, and student loans.
Fast-Tracking Auto Loan Approval in PEI
If you’d like to speed up your auto loan approval in Eastern Canada, here are some hot tips from the auto financing experts at Canada East Rides:
- Shop around for lenders and compare offers before signing your paperwork. This ensures you get the best rates and terms for your individual needs;
- Consider a pre-approved loan, which streamlines approval processes. It also gives you a solid idea of just how much you can afford to spend on your next ride;
- Check your credit score before applying for an auto loan and make sure it’s all correct. This avoids hurdles that may slow down your loan approval process;
- Prepare all your personal paperwork – identity, income, residence, employment, and insurance – (with copies) before you apply for your auto loan. This will streamline the approval of your auto loan;
- Think about a co-signer, if you’re finding it hard to get approved for an auto loan on your own. With a good credit history, this could even get you a lower interest rate and better auto loan terms.
Pro Tip: Don’t be shy about negotiating the best possible terms of your auto loan. Here at Canada East Rides, our financing specialists are happy to explore ways of saving your money while you drive your dream wheels. Are you in search of a car loan with a suitable loan duration? Fill out the form and we will give you the best vehicle financing option in New Brunswick.