Interest rates on used car loans depend on your present and past credit. Here is some information that can help you anticipate what interest rates to expect on used car loans.
Financing interest rates in Canada are currently fairly low as the economy continues to recover from the global recession. Now is a good time to borrow, especially if you’re looking for lower monthly payments and longer repayment terms on used car loans.
The average interest rate for a 36-month used car loan in Canada was 4.23% as of October, 2015. This rate has been fairly steady. Keep in mind; this is just the average interest rate, including loans based on ideal credit scores. Part of the interest rate equation includes the length of the term and the amount of the car loan. Longer terms may mean higher interest rates on used car loans.
Interest Rates and poor credit
If you have a mid to low credit score, you can expect higher interest rates. However, the reasons why your score is low could factor into the interest rate you can be approved for. For example, if your score is low simply because you lack credit history, a lender will take that into consideration. Your current income is also looked at and can help you get approved for good interest rates. With a mid-level credit score, interest rates will likely be in the mid-range as well.
If your score is low because of collections or a bankruptcy, you can still get a used car loan. However, you can expect higher interest rates on used car loans. . With some of these more serious issues on your record, you may be looking at an interest rate will likely be 15 % and up, depending on your overall financial situation.
Auto Credit Approval and Interest Rates
At Auto Credit Approval, you aren’t just a number on a report. We look at your current financial situation, not just your credit history, to see what you would reasonably be able to afford for a used car loan. We want you to succeed. We will set you up with a car loan that is manageable for your budget. We work hard to get you the best possible interest rates on used car loans.