5 Steps to a subprime car loan

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Subprime Car Loans Calgary

The Alberta economy has been tough on all of us. Many are struggling with reduced income, no income and/or fear of losing a job. A big percentage of Albertans fall into the non-prime borrowing category when it comes to credit status. All this seems a bit bleak. The truth is that there is hope even if it doesn’t feel like it. The goal is to move from being a subprime borrower to a prime borrower. This can happen quicker than you think.

If you are in need of a vehicle, whether it’s something more reliable, something more affordable or just something different and you have less than perfect credit you are not alone!

There are plenty of people with credit issues but there are solutions. We are here to help you rebuild. That means getting a vehicle that matches your needs along with payments you are comfortable with.

1. Getting Started

Before doing anything, it is important to understand your credit situation. This can be a bit daunting but we can help with this. Anyway you slice it you will need to get a copy of your credit report from Equifax or TransUnion

Borrowers with scores below 660 are seen as more of a credit risk, and can be grouped into one of three categories, based on score:

  • Nonprime: Borrowers with scores between 601 and 660
  • Subprime: Borrowers with scores between 501 and 600
  • Deep subprime: Borrowers with scores below 500

2. Set Your Budget

A fully loaded luxury SUV might be what you have in mind but is it what you can afford? Keep expectations realistic and find out what you can really manage. Don’t extend yourself too much; make sure you’re comfortable with your payments. The ability to make on-time payments is critical to rebuilding your credit.

When planning your budget take the time to figure out two values. The first is what you’d like to pay and the second is what you can afford to pay. At Calgary Drives we are able to adjust the terms of your loan to get as close as possible to the number you’d like to pay.

3. Down Payment

You can get a sub-prime loan with $0 down but keep in mind the more you put down the lower your payments will be. The advantage to making a down payment is that it shows a lender that you are serious and committed to maintaining a loan.

4. Applying for a sub-prime auto loan

The application process is a very easy one. Complete the online application and you’ll be put in touch with a credit specialist. Remember that the application is 100% private and confidential.

What you’ll need

When it comes time to sit down with one of the credit specialists at Calgary Drives you’ll need to be able to provide proof of income. This can be done by simply bringing two of your recent pay stubs with you.

5. Picking a Vehicle

There are some considerations when shopping for a vehicle for sub-prime financing.  The general rule of thumb is choose a vehicle less than 3 years old that has a high resale value and below average KMs. The other consideration is selling price. Vehicles under $22k are the best option for sub-prime candidates otherwise your monthly payment may be too high.

Once you get the loan

Once you have been approved and your vehicle chosen make sure you make each on of your payments on time. The goal is to move towards improving your borrowing status in the eyes of the lenders. If you commit yourself to making 18 car payments on time we will cut your interest rate in half AND give you $500!  That is a promise.

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