Things To Know Before Getting a Car Loan in Ottawa

  • By: mvadmin
  • Date: September 10, 2021
  • Time to read: 3 min.

Buying a car of your own can be a very exciting journey. It is thrilling to have your first job, home and car because these are essentials that everyone dreams of owning one day.

If the day for you to buy a new car is here, congratulations! We’re sure you’re very happy about it and have thought of your favorite model and its features that you love most. However, have you thought about the financing options?

Buying a car with complete downpayment doesn’t make a lot of sense since it’s a depreciating asset. Instead, you could take the benefit of getting a car loan if you’re in Ottawa. Today, we’ll walk you through the essentials of getting a car loan sanctioned easily; stay tuned to know how!

Know the correct credit scores

Your credit score will be the most important element in understanding what kind of Ottawa car loan you will get from a good lender. It doesn’t matter if you’re taking a loan from the bank, a loan dealer, or a car dealership; the interest rate will depend on your credit score, and different lenders charge a different rate. If you don’t know your score already, we advise you to get a copy of it online which is available for free at the three reporting bureaus.

Apply during a 14-day time window

Your credit score is bound to decrease slightly when lenders track your credit history. However, your applying within a 2-week window helps to reduce the negative influence, as per most credit specialists. This is a secret that automotive loan lenders will not divulge. The FICO scoring purchase window is 14 days, so all the queries made in that time frame are considered one and the same, reducing the effect on your credit score!

Get pre-approved before buying

It’s always the most prudent policy to walk into a car dealership holding a financing offer in hand, preferably sponsored by a bank or better lender. A pre-approved loan will ensure that you have the money to cover the price of the car you wish to buy. You can request a pre-approval for the car loan from banks, credit unions, and online lenders.

Calculate costs before saying yes

Before you get fixated paying for your car in cash with a particular percentage or amount, it’s necessary to understand the determinants that work towards establishing your monthly car installments. The crucial factors involve the total amount of loan you require, whether or not you can afford a down payment, how much you can pay, and the loan payment term. To get more help, use an auto loan calculator.

Wrapping Up: Comprehend dealership financing’s motives

At face value, dealership financing shows itself to be a better offer. Shiny offers like 0% interest and huge cashback discounts reduce the total loan amount and may seem like the best choice. However, remember that most of these financing options are only applicable to the highest qualified prospects. Make sure to read the fine print and check your eligibility before taking up an auto dealer’s financing.

Photo by Dhiva Krishna on Unsplash