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Buying a car is an exciting time. It can also be a bit overwhelming, especially when you’re at the dealership trying to find the car of your dreams. From test driving to price negotiation to car financing, there can certainly be a lot to consider.
So what happens after you’ve made your selection and you’re ready to finance your shiny new vehicle? That’s where we come in. The team at LendingArch is here to guide you options to consider before getting car loans in Canada through a car dealership.
Getting Car Loans in Canada Online
Whether you’re a new car buyer or a seasoned pro, a great way to get financing for car loans in Canada is through an online bank. Why? You’ll have the convenience, less pressure, and flexible options needed to find the best loan for your financial situation. You’ll also have time to shop around so you can find the best online lender or lending company that fits your needs and communication style.
How Do I Get Car Loans in Canada Online?
The process is actually quite easy! There are several online lending companies out there who make great partners and most of the processes are the same.
Should you choose to go with us at LendingArch, you’ll follow our convenient three-step car loan process:
- In a very short online application, we’ll ask you key questions such as what kind of vehicle you are looking for, your monthly budget and your annual income. The reason why LendingArch asks you these questions is so we can better understand your situation so we can match you up with the perfect loan options. We also know that you value your time which is why the entire application will only take you two minutes.
- Now you can sit back, relax, and enjoy a cup of coffee (or hot cocoa, whichever you prefer) as the hard work is done. Our team will then review your application, look at it in a 360-degree approach, and then work to match you up with lenders and loan options.
It’s in this step that differentiates us. Filling out an application with online lenders means that they will run a credit check to determine your credit score which is a big factor in securing low-income car loans in Canada. This is very important to keep in mind. Why? Going to multiple lenders means that your credit will get checked multiple times. Usually, this can result in a hard inquiry which can be damaging to your personal credit score, especially if you have a lot of hits in a short period of time. If you get denied, you’ll have a harder time getting a loan.
At LendingArch, we don’t do a credit check. We look at your entire financial picture and pair you up with lenders who have the same philosophy.
3. Shortly after you fill out your application, you’ll have a pre-approval from us for the best car dealerships and lenders who will work with you to get the best financing and car of your dreams. Our very talented and friendly team will give you a call with this information along with location information and any paperwork that you need to bring to the dealership to get your car loan approval finalized.
And viola, that’s it.
Benefits of Getting Car Loans in Canada Online
One of the biggest benefits of getting a car loan online is the improved chance of getting a lower interest rate. This is important because it will help to save you money over the entire life of the loan.
Another benefit is the negotiation power. Just because you start exploring online car loan options doesn’t mean you have to actually go through with it. A strategy you can use is to see what loan terms and rates you can get and present that to the car dealership. If the car dealer really wants to finance your car, then they’ll need to provide a better rate – and some will!
Speaking of negotiation and shopping around to find the best car loan, online loan brokers will use your application and credit profile to go to different lenders. These companies will also give you a few different car loans in Canada so you’re able to choose the one that fits your financial situation, which you might not see this flexibility if you choose to go in a different direction for your car loan.
Another huge benefit to getting car loans in Canada through an online loan broker is zero mark-up on the interest rate. How so? In this situation, you’ll be working directly with a lender (no middleman) and are more likely to get better interest rates and loan terms as they won’t mark anything up on their end.
Lastly, going through an online service also means you’ll have support 24/7. Whether you have a question about your loan or payment terms, you’ll be able to easily connect with an expert.
Going Through a Local Bank to Get Car Loans in Canada
Another solution to getting car loans in Canada is going through your local bank or credit union. We understand that you might not feel comfortable securing a loan online or through a dealership. Plus, going to a local bank that you’ve been using for many years can also make you feel more comfortable and secure as you have already established a strong relationship.
How Can I Get a Car Loan Through my Local Bank?
There are a few simple items and steps you’ll need to take. Before applying for a loan, we recommend to have the following handy:
- Credit rating
- Annual income
- Credit history
- Debt-to-Income ratio
- Personal details
- Employer’s details
- Bank account information
More often than usually have to have an active account with the bank or credit union you’re wanting to receive a car loan from.
Once you’ve gathered all the necessary information, you’ll need to determine how much money you want to borrow. You can do this by carefully calculating the debt you can handle and the amount of your purchase.
Now, it’s time for you to set up your in-person appointment to complete the car loan application. In this appointment, you will complete the application and can ask questions about the entire loan process.
Benefits of Getting Car Loans Through a Local Bank
Similar to an online loan broker, local banks will also provide you with ongoing support. Additionally, you might even develop a close relationship with several bank members which can help if you ever are in the position where you become behind on your payments or even miss a few. Another similarity between online vs. local banks is the zero markup on interest rates.
We mentioned this above but most likely you have a long-term relationship with your bank or credit union. While these institutions might not be able to provide you with a variety of flexible car loan options, they will provide you with peace of mind which might give you more comfort, especially if you’re planning on borrowing a large lump sum of money.
One of the biggest reasons Canadians choose local banks is the low-interest rates they can receive on car loans in Canada. You’ll be able to save at least $200 a year which can quickly add up over the entire lifetime of the loan.
Lastly, local banks and credit unions can be more forgiving to those with credit issues. Whether you’ve filed for bankruptcy or have little to no credit, you have a higher chance at getting financed than if you acquired a car loan a different way. Typically, these financial institutions are more lenient when it comes to credit scores. As long as you have shown financial improvement, they will be more willing to work with you than outright denying your loan approval before looking at the entire situation.
Getting Car Loans Through a Dealership
Getting car loans in Canada through a dealership can be a convenient and financially sound option. We do like the fact that car dealerships are one-stop shops and you don’t have to leave the building to talk about financing.
But how does dealership financing actually work? One of the biggest misconceptions about securing car financing is that dealers don’t actually have the power to approve or deny loans. They simply are a middleman who helps arrange auto financing for you. It’s the lenders that the auto dealership reaches out to who determine if you will get approved for car loans in Canada and at what interest rate. These specific lenders are also called indirect lenders and can only provide car loans through a dealership. Fascinating, right?!
Since car dealerships need to make money, oftentimes you might see some additional fees and/or add-on maintenance packages that they’ll try to sell you. You don’t have to feel obligated to say yes, just understand where they’re coming from.
When you do meet with the car dealership financial expert, you can also try to negotiate on price as more often than not, they want your business. You can also ask questions about loan terms and support to see how they compare to other loan options.
Leave Car Loans in Canada to The Experts
At LendingArch, we strive to help Canadians in all financial situations get approved for car loans in Canada. Our mission is to empower Canadians so they don’t feel stuck with poor financing options and are set up for financial success in the future.
Contacting our team means that within 24-48 hours of your application submittal, you’ll hear from one of our team members. We’ll even put you in touch with a car dealership on the same day so there is no delay in getting approved for a car loan.
While we’d like to promise everyone instant funding, unfortunately, this isn’t always the case. What we can promise is doing everything in our power to move your application along as quickly as possible so you can easily be paired up with a lender to secure your funding for a new car.
LendingArch is Here to Help You Find Better Car Loans in Canada
Regardless of your financial situation and history, we are focused on helping you We will ensure you find and secure a loan that works for your unique situation. This is what stands us apart from the competition.
With our large network of lenders, we’ll be able to find a car loan that fits your financial needs. Now that you have the inside scoop on car loans in Canada, are you ready to take the next step? Apply for your car loan today!