Tips to get a Self Employed Car Loan in Vineland
Tips to get a Self Employed Car Loan in Vineland
Posted on April 28, 2022
Self-employed Canadians that need a new car loan are in the right place. Our Vineland car loans team are going to show you what goes into a self-employed car loan and what you need to do to secure the best deal possible.
Being self-employed will present a unique series of challenges that the average consumer will never face.
Is your business registered as a sole proprietorship or incorporated?
Running an incorporated business is much like being an employee; your earnings and that of the company are separate.
This makes underwriting your car loan easier than a borrower who is operating as a sole proprietorship.
As a sole proprietor, your income and that of your business are mingled together.
Prospective lenders need to know what is your regular monthly income, so they can determine what the maximum loan you can afford.
The majority of lenders use the maximum DTI ratio of 40%, so whatever your gross monthly income is, take forty percent of that as the maximum amount of cash that can go towards servicing your current and future debts.
To calculate this as a sole proprietor, potential lenders will ask for your bank statements and the latest income tax assessments to establish a baseline monthly income.
After that has been completed, lenders can move forward with their underwriting process.
Your credit score will make or break you
Having a good income is important, but when talking about Vineland car loans, your credit score can make or break you.
The average credit score in Canada is in the 660s, and to get the best rates, your credit score must be over 720.
If you are not already monitoring your credit score on a regular basis, you should aim to do it going forward.
The last thing you want to deal with is a sudden drop in your credit score because of an error that could have been dealt with before you started shopping for a car.
As a self-employed Canadian, you probably use your personal credit cards for business expenses which is fine but try to reduce the total amount of debt you are carrying.
If your debt load is high, it can make impact your overall credit utilization rate, which will bring down your credit score.
The best source of self-employed car loans in Vineland
To access the best self-employed car loans in Vineland, you will not find these deals online.
You must contact a local car dealership in your area and find out what options are available.
The dealership has helped countless other self-employed Canadians like you get a car loan, so you should reach out to them today.
The dealership will have an extensive inventory of vehicles for you to choose from; this will help make your overall car buying experience a more pleasant one.
Now that we have covered how to get a self-employed car loan in Canada, you can reach out to the dealerships soon and find the right car for your needs.
Just remember, the Bank of Canada is going to be raising interest rates soon, so you must buy your new car before the rates start to climb.
We’d love to help you find a self employed car loan in Vineland. 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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