Car Loans for Bad Credit

Canada Motor Car, Used Car Dealership, Ontario

Car Loans For Bad Credit: Toronto Area Financing Advice

Debt is a growing reality for many Canadians. With all the available credit, it’s hard to stay out of debt. Canadians are finding it tougher and tougher to dig themselves out of the hole they are in. The number of Canadians with bad credit is on the rise.

Just because you have made a few mistakes and your credit score isn't what it used to be, are you now unable to borrow?

It depends. When it comes to bad credit, most banks who agree to take the risk in lending the money, do so according to a pre-determined bad credit grid. Basically, the worse your credit is, the higher the risk for the bank, therefore, the higher the interest rate they will charge. There are a number of banks and lenders that will loan you money, but again, be prepared to pay a high interest rate in return. Loans for bad credit can have an interest rate of anywhere from nine to twenty-nine percent. Some credit cards will raise your interest rate up about thirty percent if you are late on just one or two payments.

It comes as no surprise that so many people can't pay on time, and develop imperfections in their credit history. If you do have bad credit, and still want a loan, you may have no choice but to look for a loan for bad credit and pay a high interest rate. Paying the loan back in good time will help to re-establish your credit, which is one advantage to taking out a loan.

Make sure, before entering into any type of agreement with the bank that you can make your payments on time each month. Down the road, you may be able to get your interest rate lowered, or find someone to refinance for you at a lower rate. Many companies offer loans for bad credit, but be sure to do your homework before you apply to any of them. Never sign for a loan with bad credit without thoroughly reading the fine print and doing the math. So many companies take advantage of those with bad credit, and see it as an opportunity to make a lot of money off of their misfortune. At the same time, reputable companies will also charge you a higher rate. They, of course, want to make money, but their reasons are more about risk than making a huge profit.

Be sure you know who you are dealing with when looking for loans for bad credit, and look up any loan company before you deal with them directly.