What is the Average Interest Rate on a Car Loan in Canada?
On average, the interest rates of auto loans in Canada are between 4.5% and 10%. However, these rates vary depending on your credit score, loan term, and other factors determined by the lender. Generally speaking, the higher your credit score, the lower your interest rate will be. So, it is highly recommended to improve your credit score, months before you apply for a car loan.
What is the Best Car Loan Term in Canada?
Finding the sweet spot between the right loan term and the best interest rate can be challenging. And then, there are other factors to consider like the number of years you plan to keep your vehicle, the cost of the vehicle, and how much you are willing to pay for your monthly payments. Most lending companies in Canada offer auto loans ranging from 12 months to 96 months. However, most financial experts recommend that you choose a loan term between 60 months to 72 months, if possible.
How Do I Find the Best Car Loan in Canada?
You have three options when it comes to applying for a car loan. You can apply for a loan through a bank or a credit union, you can go through an auto dealer, or you can apply directly through an auto finance company.
Banks and Credit Unions
Banks and credit unions are the most common options when it comes to financing a car. However, due to their stringent rules and regulations, they may not be the best choice for all people, especially for those who have bad credit.
Auto Dealers
When you go to an auto dealer, you can typically find many different types of car loans available to you. The problem is that not all dealers offer the same types of loan terms. Some dealers offer more expensive loans with higher interest rates, so it is important to compare loan rates and terms among different dealers before making a decision.
Online Lending Companies
Online auto finance companies have become a popular option for car financing because they are more relaxed when it comes to loan requirements. Most of them do not require credit checks, and they do not have any hidden fees. The downside is that some online lenders may charge higher interest rates than banks or credit unions.
Auto Loan Providers in Canada
If you are looking for a car loan in Canada, you have a lot of options to choose from. There are many auto finance companies, banks, and credit unions that offer a variety of different loan terms and interest rates. Here are some of the most popular auto loan providers in Canada:
Bank of Montreal
Bank of Montreal of BOM is a leading Canadian bank that offers auto loans with a minimum amount of $7,500. The maximum loan amount varies from the borrower’s credit score profile. Their interest rates are between 6% and 8%. They have a repayment term of up to 96 months.
Scotiabank
Scotiabank is one of the top banks in Canada that offers attractive loan rates and flexible payment terms. Their auto loans can go as high as $200,000 with a repayment term of up to 8 years. Their interest rates vary from 4.89% to 9.13%.
Car Loans 411
Car Loans 411 is another Canadian lender that offers affordable and competitive auto loans. They offer loans of up to $50,000 with interest rates ranging from 4.9%-29.9%. Their repayment term is up to 72 months.
Conclusion
Buying a new car is a big decision, and you need to make sure that you have all the information you need before you make a purchase. You can use this guide to help you find the best car loan in Canada. When you compare auto loans and find the best deal, you will be able to make a better decision that will help you avoid financial problems in the future.