Bad Credit Car Loans Canada
No Sales Calls or Lengthy Paperwork
My monthly budget
Our average car loan rate starts from 5.86%*. Takes 60 seconds, no impact on your credit profile to see if you're approved👍
- No deposit & credit checks needed
- We help find you the perfect car
- Quick decision & fast funding
- Financing over 44,500 new and used cars in Canada
Who are we? Compare bad credit car loans with proven success
Car Plus Loans, a leading and trusted bad credit car loan and financing comparison platform, helps thousands of Canadians like you find the best car loan options to buy their dream vehicle. We focus on transparency, customer satisfaction, and equal borrowing opportunities for all. Even people with low or bad credit scores can find the right deal with us.
Three steps to your dream car🚗
Drive your dream car on finance, even if you've bad credit. Apply only today and get the car collected or directly delivered the same day or next. Compare now for the best car loan with bad credit deals up to $200,000.
Get your rate
First, answer a few quick questions to see your personalised car loan rate in 60 seconds, without disturbing your credit score.
Apply online
Complete your car loan application online in under 10 minutes. We knew you couldn't wait for your dream car.
Funds are ready
Complete your car purchase online after pre-approval. Once your car loan is approved, the requested funds are transferred to the seller's account within 2-3 business days. Congrats!! You're ready to hit the road with your dream car.
Having a bad credit history? Don't worry, compare car loan offers now
Comparing car loans for bad credit allows you to find the best and affordable options to buy your perfect car. Below, we show the key features and benefits that help you make a wise and informed car financing decision.
Can I get a car loan with bad credit in Canada?
Yes, you can still get a car loan with bad credit, but with some precautions, too. If you apply for a bad credit car loan, make sure the car you choose is not too expensive; otherwise, lenders may take a longer time to approve the loan, or may not be willing to approve. The hack is to choose a car that fits within your budget and current financial situation. Always focus on what you can afford to pay each month.
At Car Plus Loans, we assess each application carefully to match you with the best possible financing deal and lender. As an independent comparing platform, we work with the most trusted and reputable lenders like Clutch, who specialise in car loan with bad credit in Canada.
To increase your approval chances, we'll check your application thoroughly to ensure you qualify in one go. Remember, as compared to a good credit score, lower or bad credit scores can lead to higher interest rates.
Before we send your car loan application to our panel of 45+ lenders, we do a "Soft search" that won't affect your credit score but will increase your chance of approval. This "Soft search" is only to ensure your income flow is good and you can manage your repayments on time. After this, we forward your car loan application to our best-eligible lenders, with most decisions coming back to you within minutes.
What is a 'bad' credit score in Canada?
In Canada, credit score ranges from 300 to 900. Typically, a credit score below 560 is considered a "bad" or below-average category. However, this will depend on which credit reporting agency you get it from. There are two major credit bureaus in Canada – Equifax and TransUnion. Each credit agency uses its own ranges and rating scales to consider what constitutes a "good" or "bad" credit score.
For example, a "below average" Equifax credit score can be as low as 559 or below, while a TransUnion credit score below 692 will be considered either a "low" or "bad" score and needs improvement.
Here is a breakdown of typical credit score ranges in Canada
| Credit Bureau | Poor | Fair | Good | Very Good | Excellent |
|---|---|---|---|---|---|
| Equifax | 300-559 | 560-659 | 660-724 | 725 to 759 | 760 and up |
| TransUnion | 300-692 | 693-742 | 743 – 789 | 790-832 | 833 and up |
What is the cost of a bad credit car loan?
Here's a breakdown of how much a bad credit car loan can cost:
| Car Loan Details | Amount |
|---|---|
| Car Price | $10,000 |
| Deposit | $2,000 |
| Term (in months) | 24 |
| Credit Profile | Bad |
| Interest Rate | 35% |
| Monthly Payment | $ 468.15 |
| Total Interest | $ 3235.57 |
| Total Payment | $ 11235.57 |
Due to a bad credit history, your car loan becomes expensive, and you need to pay a higher interest rate. With a deposit of $2,000 and a 35% rate, you'll pay approximately $ 3235.57 in interest over 2 years.
How do you get a bad credit score?
The following reasons may damage your credit history:
- Unpaid bills: Always make sure to keep your payments on time. Piles of pending bills can lower your credit score.
- Too many declined for a loan: If you have recently been rejected for a car loan or any other credit option, this will be recorded on your credit file. Many of the lenders see this as a red flag and consider it a damaged credit history.
- Made late payments: Like unpaid bills, late fees will also affect your credit history. If you can't pay bills on the due date, contact your provider and negotiate to extend the payment date.
- Applied for credit too often: According to the general rule, you should only make a credit enquiry once every 6 months. More than this could raise a red flag to lenders.
- Declared bankrupt: If you have been declared bankrupt, you will have a bad credit rating that will stay in your credit history for 6 years in Canada (Equifax and TransUnion).
Does your credit score reset in Canada?
It is not true that your credit score resets, but once a mark on your credit score is removed, it will no longer negatively affect your score. Even major credit bureaus in Canada, such as TransUnion, confirm that there's no way to reset a credit score. It's a myth that debt disappears from your credit report after 7 years in Canada. A creditor or lender could be independent to collect outstanding debts from you, even after 7 years. However, they have no power to take you to court.
Can you get a car loan with bad credit in Canada?
Yes, it might be difficult, but still, getting a car loan with bad credit is possible, as long as you're confident you can repay on time and in full. Always remember that you should never apply for a car loan that's out of your set budget or a bit unusual; otherwise, you're less likely to get approval.
First of all, thoroughly check your budget and decide what's the best and sensible choice for your next car, plus ensure that you can afford the payments. At Car Plus Loans, our dedicated lenders will take you through the best available options for people with poor credit, but who want to drive their dream car.
Can I get car finance with no credit score?
Yes, you can still qualify for a car loan with no credit score or history, but it can be difficult and expensive, too. Usually, car loan lenders see borrowers with no credit score as riskier borrowers because they have no previous experience managing payments.
However, you should still be able to get a car loan with no credit score or check, but the interest rates are on the higher side, or you need to choose a lender who specialises in these situations, like Car Plus Loans already does. Typically, such lenders focus more on your income, debt ratio, and ability to afford monthly payments.
The good news is that if you keep on top of your payments, a bad credit car loan can help improve your credit report.
Pros and cons of car loans with bad credit
| Pros | Cons |
|---|---|
| You can get approved when traditional banks and other lenders say 'NO' due to a low or bad credit score. | Because of the high risk to the lender, the interest rates are usually higher for a car loan for bad credit. |
| Regular payment of your bad credit car loan can help you improve your credit score. | By the end of your car loan term, you may pay more than the original value of the car. |
| Whether you need a new or used car for work, family, or for everyday life, you can get one as soon as possible – no need to wait for building credit. | If you can't keep up with the repayments, the lenders have the right to repossess the car to cover their loss. |
| There's no guarantee of acceptance, but if you have a low or poor credit history, you've the highest chances of getting a bad credit car loan. | Many lenders charge high upfront fees or early payment penalties. The key is to compare and work with a trusted lender, like Car Plus Loans. |
How to apply for a bad credit car loan in Canada?
- First of all, calculate how much you need to borrow.
- Secondly, decide how long you want to take out the car loan for.
- Third, make a pre-plan on how much you can afford to pay back each month.
- Fifth, compare to find the best bad credit car loan providers in Canada.
- Sixth, check eligibility before you apply to make sure you meet the lender's criteria.
- Finally, once you find a suitable and best car loan deal with bad credit, follow the application process with that lender.
Car Plus Loans Tip: Avoid making too many applications within a short period, as this directly shows that you are financially struggling, which could put lenders off.
Got more questions? Head over to our FAQs page 👍
Why come to us for bad credit car loan?
A helping hand
At Car Plus Loans, we genuinely believe that every Canadian deserve a feel-good car buying journey, even if they have a low or bad credit history.
Personalized rates
Car Plus Loans offers customized rates tailored to your current credit history and financial situation.
Easy online application
Our application process is straightforward and fast. Just answer a few questions, find out if you qualify, and get approval within a few minutes.
A faster, fairer way to finance your new dream car🚗
With Car Plus Loans, you can experience our smart, paperless borrowing, which enables you to spend more time cruising the open road and less time on your car loan application.
Get your quoteTakes 60 seconds, no impact on your credit profile to see if you're approved 👍