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How to Secure a Car Loan when Self Employed in Hagersville

How to Secure a Car Loan when Self Employed in Hagersville

People who want to secure a car loan when self employed in Hagersville have their work cut out for them. Unfortunately, it seems like there are no websites that provide information for self-employed consumers, so our auto loans team are going to give you the information you need.

 

Lenders don’t know how to underwrite self-employed car loans

 

The vast majority of lenders in Hagersville are not set up to process car loans for borrowers that are self-employed.

 

These lenders know how to process a loan if the borrower is working a “traditional” 9-5, but the gig economy in Canada has changed the employment landscape and sadly lenders have not adapted.

 

Documents you will need to secure a self-employed car loan

 

Prospective lenders will want to see your income tax notice of assessments for the last two years.

 

This is a minimum requirement for mortgages and car loans in Hagersville. If you do not have those available, then your odds of getting a car loan are greatly reduced.

 

Lenders will want to look at your bank statements for the last six months and maybe longer.

 

First, the lender wants to calculate what your average monthly income is, which is challenging when you are self-employed because no two months are the same.

 

By averaging out what you earn every month, the lender can then determine whether you are able to repay the debt as agreed.

 

Understanding the role that ratios play

 

To get a prime car loan, your debt-to-income DTI ratio must be under 40%, factoring in the new car loan.

 

The majority of self-employed Canadians put business expenses on their personal credit cards, which is convenient, but it can impact your car buying options, so you need to make sure the numbers add up.

 

Reviewing your credit score

 

As a self-employed borrower, your credit score will make all the difference on whether you will get a car loan. To qualify for the best interest rates, you need a 720-credit score.

 

If your score is under 720 but over 600, then you will be able to get a car loan, but lenders will charge you a considerably higher interest rate.

 

If you have a low credit score, you will need to work on reducing the total amount of debt you are carrying and always paying your debts on time. By staying on top of your finances, your credit score should stay in prime territory.

 

Securing the best self-employed car loans in Hagersville

 

There are many different ways to get a car loan in Canada, but as a self-employed borrower, you need to visit a local dealership.

 

The dealership is going to shop around with lenders throughout Canada and find the one who will give you the best deal.

 

Another benefit of going through the dealership is their ability to provide actionable advice if you are having credit challenges.

 

By sticking with these suggestions, you should be able to find a competitive car loan before prices get any higher.

 

Inflation in Canada is at an all-time high, and the longer you delay buying a new car, the more it will cost you in the long run.

 

We’d love to help you find a well-priced car loan when self employed in Hagersville. 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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    Categories: Auto Loan

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