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Accessing Mississauga auto loans as a contractor or self employed

Accessing Mississauga auto loans as a contractor or self employed

Tuesday’s post on work situations that make it difficult to access auto loans provoked quite the conversation here in the Car Nation Canada offices. It seems we all know someone who is a contractor, gig worker or self employed and we all agreed that this subject needed further exploration.

Which is what this post is all about.

Our Mississauga auto loan team have put together some actionable advice for any contractor, gig worker or self employed person to help you access a car loan should you want one.

Check your credit score

As someone who is self employed, your credit score plays a big part in whether you’re accepted for a loan or not. The higher your score, the more likely you are to be able to borrow.

If you have less than perfect credit, you can still get an auto loan in Mississauga, you’ll just have more work to do to prove you’re a solid bet.

Prove your income

Proving your income is particularly challenging for the self employed. You claim as much as you can as expenses so you pay as little tax as possible. This might lower your tax burden but is also lowers your declared earnings.

If you want a lender to take more earnings into account, you’re going to need to have to prove it. Keep accurate records of every source of income. Of every payment and of every expense.

Keep your bank statements and be prepared to go into detail about how much you earn, how much you can reasonably afford to repay and to prove it. Collect six months of bank statements as evidence as this could really help.

Prepare everything in advance

If time is on your side, be balanced in your next tax return. Try to showcase the true picture without exposing yourself to a high tax bill.

Work on your credit score as much as possible. Pay down any debt, check your credit report for inaccuracies, use your credit card to build a positive payment history and keep your spending sensible.

Then get your paperwork together to prove your identity, address and income and plan your Mississauga auto loan application.

If time is on your side, save up as much as you can for a down payment. The higher the down payment, the higher the chance of being accepted for the auto loan.

Get preapproved

Auto loan preapproval can be a useful tool to tell you in advance how much you can borrow. Most online preapproval calculators don’t worry about the type of work so don’t worry about that. Just use your average income and complete everything else as normal.

Preapproval does not impact your credit score and is a simple way to get an idea of how much you could borrow. It’s not a loan offer but a test run. Use it as such.

Secured vs unsecured auto loans in Mississauga

If you think you’re unlikely to qualify for an auto loan, consider a secured loan. This secures the loan on your home if you own it and can significantly increase the chances of being accepted.

Secured loans won’t work for everyone and they aren’t always necessary but it is something to consider.

If you work with our Mississauga auto loan experts, we should be able to find an unsecured simple interest auto loan

If you need help or advice on anything to do with auto loans in Mississauga, contact Car Nation Canada today, we can help!

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