Finding a Bad Credit Car Loan in Paris Ontario

Finding a Bad Credit Car Loan in Paris Ontario

Posted on May 4, 2022

The cost of new cars is on the rise; we can thank inflation for these higher prices. The Bank of Canada is raising interest rates to slow inflation, but this will drive up your borrowing costs, so you are caught in a car-buying catch-22.

You have the opportunity to get a great deal on a bad credit car loan in Paris Ontario before interest rates start to climb, but you need to move fast.

How to boost your credit score from 650 to 720

To access the best interest rates in Paris ON, your credit score has to be 720 or higher. A 650 credit score is in the "fair" range, but lenders are concerned about taking on risk and have increased the minimum credit score for prime rates.

Do you have access to your credit reports?

If not, sign up for free credit monitoring with both TransUnion and Equifax.

Now that you have access to these credit services look at your credit utilization rate; this is most likely the reason your credit score is in the 650 range.

Your credit utilization rate needs to be under 30%, so if your total available credit is $10,000, then your outstanding balances cannot be more than $3,000.

Try to bring those balances down to zero as quickly as possible. It could take a month or two before your credit score increases, and you do not have time to wait; interest rates are going to start climbing fast!

Making sure you have sufficient room in your budget for a car loan

Lenders will focus on two elements when underwriting your bad credit car loan in Paris Ontario, first is your credit score.

With a 650 score, you will get a competitive interest rate car loan.

The other variable that the lender will look at is your income. You could have a perfect credit score, but if your income is low, they will not approve the loan.

Lenders will not approve a loan if your debt-to-income ratio (DTI) is more than 35%, so you need to try to increase your income and reduce your debts.

Having a budget in place is the first step in this process; without a budget, you have no way of knowing whether you can afford the car loan.

Where to find the best Paris car loans with a 650-credit score

There are many websites offering car loans. They all claim to have the best deal around, but these websites offer you retail interest rates.

What you need is access to wholesale lenders; the way to access these highly sought-after deals is with the help of a car dealership in your area.

The dealerships originate millions of dollars’ worth of car loans every month; this gives them tremendous negotiating power, which you benefit from by simply going to the dealership and working with them.

These dealerships will also show you the quickest way to raise your credit score, so you can refinance your car loan in a few months when your credit score improves.

So now that you know how to get a car loan with a 650 credit score, you should head over to the dealership ASAP before interest rates go up.

We’d love to help you find a car loan in Paris Ontario. Simply fill in the form below and we’ll get back to you ASAP or see our selection of new and used cars at our Burlington dealership. 

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