What You Need To Know About Truck Loans In Canada
Before setting out to secure a truck loan in Canada, there are a few things you need to have at the back of your mind. This would put you in the right frame of mind to optimize your options and get only the best deals. Below are five main factors to be considered when applying for a truck loan in Canada.
The Type of Truck You Are Interested in Purchasing
Now, this is where your journey should begin. You must be very precise about what type of truck you are looking to purchase. The rules are different for each type of truck (dump, cement trucks, etc), and knowing these rules will help you make well-informed choices.
Also, keep in mind that some banks can be a little hesitant about giving out large commercial truck loans. Even, when they do, such loans may come with stringent conditions, and in some cases, huge interest rates. So you need to be very careful not to incur any serious cost that can put you at risk of debt.
How Much Down-payment Is Required:
This is another factor you need to properly consider. It is a general principle that the bigger the truck loan you are looking to purchase, the higher the down payment required. Another principle worthy of note is; having a large down payment credit increases your chances of getting your loan approved. A large down payment can also reduce the interest rates on subsequent monthly payments.
Know Your Credit Score:
You should check your credit score to see how financially eligible you are to secure a truck loan. A credit score is merely a value in numbers that symbolizes your creditworthiness. It will be used to determine if you are qualified to secure the truck loan you are applying for.
Your credit score is determined based on a few factors. These factors may include your debit base versus your credit base, your transaction history, and how prompt you are at offsetting debts. Other factors considered include your asset base, your financial growth rate, and the number of bank accounts you have, etc.
Having a high credit score is very important. It makes it easy to get your truck loan applications approved, and with even better interest rates.
Compare and Contrast Different Lending Houses:
Another critical part of the whole process is making comparisons between different lending houses. You have to conduct thorough research to find out which bank or lending house offers the best rates. Compare and contrast before coming up with a suitable option.
Most times, if you have a solid credit score, some banks may offer you interest rates from around 4 to 7%. The interest rate may be higher if you have a low or bad credit score. This explains why it is always advisable to get your credit score right for situations like this.
Going For an Alternative Lender:
Nowadays, it’s much easier to get loans from small local lending houses and online lenders as well. You do not always have to wait in line to get approved at the bank and big recognized lending companies. The problem with such institutions is that most times, you need to meet strict conditions before you can get approved.
Alternative lenders on the other hand have less strict conditions to access their loans. The requirements are very minimal and even an individual with a bad or low credit score can get a loan.
How To Get A Truck Loan With a Low or Bad Credit in Canada
As was earlier stated, most lenders will always check your credit score before giving you a loan. So for a person with bad credit, it might appear almost to get a loan request approved. But did you know that you can get a truck loan even with a bad credit score? Yes, it is absolutely possible.
Here are some things you can do to get a truck loan even with a low or bad credit score:
Know Your Limits:
You need to calculate how much you have to spend on down payments, interest rates, and monthly installments. You can use an online EMI calculator to make your calculations. This should provide you with vital information regarding some of the requirements needed to access a truck loan with bad credit.
Find a Trade-Off:
For instance, do you have an existing truck that you can put up as collateral? If yes, then you stand a great chance with a lending house. Better yet, you may even secure a much larger loan with better interest rates.
As pointed earlier, online lenders are a good alternative to get fast loans with the very minimal requirement. So even with a bad credit score, you can still get your truck loan request approved. The downside to this however is that these types of lenders charge high-interest rates anywhere from around 5% to 25 or 30%.
Getting a truck loan in Canada is not as difficult as some may assume. Getting your truck loan approved can be as swift and seamless as possible. And even a person with a bad credit score can get one.
However, you have to keep track of your capacity before applying for a truck loan. Keep watch on your credit score, and the down payment required. Lastly, remember to compare different lenders to get the best deal possible.