Car Loan FAQ

Learn more about car loans from our FAQs.

Can I get a car loan even if I have bad credit?

Yes. All you have to do is apply for a car loan at LowestRates.ca. Our nationwide network of lenders and dealers provides car loans to Canadians who don't have a strong credit history.

How long will it take to get my car loan?

Once you submit your application, the process moves very quickly. We'll match you up with a dealer from our car loan network within 48 hours.

I've been turned down for a car loan in the past. Can LowestRates.ca help?

Yes. In fact, our car loan service is meant to serve Canadians who don't have great credit but who still need a vehicle to get around.

I just arrived in Canada and haven't had an opportunity to build a credit history. Can I get a car loan?

Yes. New Canadian residents can definitely get a car loan through our site.

If this is my first vehicle purchase, can I still qualify for financing?

Yes. We regularly secure vehicle financing for new drivers.

How much will this service cost me?

Our car loan service is free to use. Simply fill out the application on our site to get started.

What type of information will I need to provide?

We ask for your contact details, place of residence, and some basic employment and income information. Unlike many other car loan services, we don't pull your credit or ask for references before matching you up with a lender or dealer.

Will I need to provide my Social Insurance Number when I apply?

No, we don't need your SIN to match you with a lender or dealer. You might, however, be asked for your SIN later on in the process once you've connected with the lender or dealer providing you with financing.

What's required to qualify for a car loan through your site?

You must have a valid driver's license, be a resident of Canada, and have an income of at least $1,500 per month.

How does your car loan service work?

We match you up with a dealer from our nationwide car loan network. They will contact you and approve you for a loan based on your financial profile. You'll then get the terms of your financing (interest rate, amount you can borrow, etc) from the dealer and can work with them to choose an appropriate vehicle. Select your ride, sign the papers, and get on the road — just like that. The process is clear, transparent, and fair.

How will I choose my new car?

Once you know the terms of your loan, you'll be able to select a vehicle from the dealership you're matched with.

How do you decide how much auto financing I'll qualify for?

The size of your car loan is decided by the dealer. They'll look at your income and credit history to come up with a financing package they feel comfortable with.

How are my payments calculated?

Your monthly payments will be calculated based on the size of the loan, the interest rate, and the length of the term.

What will the interest rate on my car loan be?

The interest rate you’ll pay depends on a number of factors, including your income, your credit, and how large your loan is.

Do I need to make a down payment on the vehicle?

Down payments are generally not required. It will depend on the lender or dealer you’re matched with.

How much can I borrow for my car loan?

The car loans offered by lenders and dealers in our network generally range in size from $5,000 to $40,000. The amount of financing you’ll qualify for depends on a number of factors, including your income, employment details, and credit.

How does the length of the car loan affect my payment?

The longer your loan, the smaller your monthly car payment. Just remember that you'll end up paying more interest if you take out a longer loan.

Here's what your monthly payments would look like if you took out a $10,000 car loan at 8% interest:

Monthly payments on a $10,000 car loan (at 8% interest)

Lenght of car loanCar loan payment
24 months$452
36 months$313
48 months$244
60 months$203
72 months$175
84 months$156
96 months$141

Once I get to the dealer, how do I know I'm paying a fair price for the vehicle?

Our advice is to do your own research. That way you'll know the approximate value of the vehicle you're interested in. Canadian Black Book shows the current price ranges for used vehicles.

What's the principal balance on a car loan?

The principal balance is the amount of money you still owe on the loan, excluding interest. Here's how your balance goes down on a 5-year, $10,000 car loan at 8% interest:

Principal balance on a $10,000 car loan over time

Length of loanPrincipal remaining
6 months$9,170
12 months$8,306
18 months$7,406
24 months$6,471
30 months$5,497
36 months$4,483
42 months$3,429
48 months$2,331
54 months$1,189
60 months$0

What does it mean to be 'underwater' on a car loan?

Being 'underwater' on your car loan means that the fair market value of your vehicle is lower than the amount you still owe on the loan. You're much more likely to be 'underwater' if you have an extended-term loan (defined as longer than 60 months), because you'll be paying it off over a longer period of time while your vehicle continues to depreciate in value.

Car owners who are 'underwater' are also said to have 'negative equity': if they sold their vehicle, the money they would receive from the sale would not be enough to pay off the loan.

How much car will I be able to afford through your car loan service?

The terms and size of the loan are handled at the lender/dealer level. In general, car buyers should never spend more than 15% of their gross income on a vehicle. A buyer making $4,000 per month, for example, should not spend more than $600 on a monthly car payment.

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