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Canadian car loan refinancing tips

Canadian car loan refinancing tips

If you are in the market for a new car or currently have a car loan that is over $5,000 then you are in the right spot. Interest rates for car loans are at historic lows but according to the Bank of Canada, prime rates will be rising soon to battle inflation, so you will need to move fast if you want to save money.

Our Ancaster auto loans team shares a few insider tips ideal for anyone planning to refinance their car loan in the near future.

How car financing works in Canada

There are many different Ancaster auto loan providers out there but generally, they either focus on prime (great credit) or subprime (less than perfect credit) borrower profiles. The major banks tend to focus on people with great credit since the risk of these borrowers defaulting is the lowest.

The banks are offering at the time of publishing car loans in the %3-%5 range but you will not be able to get those preferential rates by applying on your own, you will need a professional firm to help you lock in those terms (we will explain how to find those experts in a bit).

What you need to access the best auto loans in Canada

The first thing you need is a good credit score, the consensus amongst industry experts is 680 but aim for 700 for added peace of mind.

If you are not sure what your current score is, you can get access to your score for free by signing up with Equifax or TransUnion.(these websites do have paid services but the free credit score and report should meet your needs.)

Your credit score is important, not just for getting a car loan but renting an apartment, buying a house, or even applying for certain types of jobs, so make it a habit to always check your score monthly.

If your score does fall under 680, the most common reason is you either missed a payment/s or are carrying too much debt. In either case, you should make it a priority to always pay your debts on time and reduce the amount of debt you are carrying.

How to quickly secure the low-interest rate car loan in Ancaster

We touched on how you needed professional support to get the most preferential interest rates. The only way you can do that in Canada is by going through a local dealership.

You are going to see websites that claim to have “the lowest interest rates” but these sites cannot hold a candle to what a dealership has available.

The dealerships have been doing car loans for a long time and already have existing relationships with all of the lenders across Canada. Aside from being able to get you a great interest rate, the dealership is going to help you with all of the paperwork which is something the websites won’t do.

Should your credit score be well below 680, don’t worry, the dealership will still be able to help you get a low-interest rate based on your current situation and also give you advice on how you can quickly raise your score.

This is how you can access the best interest rate car loans in Ancaster, by going through a local dealership, so make it a priority to reach out to one now before rates rise.

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

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