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Financing a car in Rockton when you are self-employed

Financing a car in Rockton when you are self-employed

Self-employed Canadians who want to finance the purchase of a new car have a plethora of options available to them. Back in the early 2000s and even before, if you were self-employed your borrowing options were either your local bank or credit union.

The interest rates that were charged to self-employed borrowers were considerably higher because the lender thought these customers posed a higher risk of “default”.

Fortunately, things have changed with deregulation and some lenders specialize in providing car loans to self-employed customers, as our Rockton auto loans team explains.

How Rockton self-employed car loans work

The prospective lender has to figure out how much money the borrower brings in every month. This takes more documentation than someone who just works one job full-time.

What lenders do is look for bank statements and the income tax notice of assessment for the last two (2) years. We know that getting these documents can be a pain in the backside, but it is necessary.

The lenders need to figure out what you bring in every month so they can determine your maximum debt to income ratio (DTI).

If you are servicing too much debt, it will limit the amount of money you can borrow for a new car.

Credit score needed for a prime car loan in Rockton

Covid has made lenders more cautious, especially since the economy is in a fragile state. Lenders want to see borrowers with a credit score of 680 or higher to receive preferential interest rates.

Take a moment to review your credit score for free, numerous apps will let you access your score. If your score is below 680, now is the time to begin taking proactive steps to boost your score.

How to safely raise your credit score

The best way to raise your credit score is to start paying all of your debts on time. If you cannot pay the full balance, you should always pay the minimum amount due.

By making all of your payments on time, your credit score is going to start rising. After making sure your payments are made on time, the next thing you must do is start paying down your debts.

The algorithm used to calculate credit scores looks at your repayment history and also the total amount of debt you are carrying.

When you reduce these debts, it makes you more creditworthy in the eyes of prospective borrowers.

Realizing your car buying dream

You will need professionals to get the best possible Rockton car loan terms. The good news, the help is just a phone call away.

Reach out to your local car dealership. These dealerships have an extensive inventory of cars for you to choose from. (This inventory is dwindling due to the chronic shortage of new cars being manufactured so make sure to move quickly).

The dealership already has a network of lenders, so you have peace of mind knowing you are going to get the best interest rates and terms.  Start the process by calling your local dealership, they have experience working with self-employed buyers like you so what are you waiting for!

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

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