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Self-employed car loans in Dunnville: what you need to know

Self-employed car loans in Dunnville: what you need to know

The pandemic has forced us to rethink our priorities and consider how secure our jobs are. Why not work for yourself if you don't have job security working for someone else?

Being an entrepreneur provides a great deal of flexibility, but it also comes with a set of unique challenges that a salaried employee never has to face.

The difficulties of obtaining a self-employed car loan in Dunnville

Securing financing for a new vehicle is one of the most difficult tasks that a self-employed person faces.

Most lenders use the traditional underwriting process where the borrower works a predictable job with a predictable income because they are unable to keep up with the changes in how Canadians earn their income.

Most entrepreneurs will admit that their earnings are unpredictable.

Because traditional lenders are unable to effectively underwrite self-employed auto loans, they will reject the application, even if the borrower has excellent credit and income.

Fortunately, a growing number of lenders are willing to work with self-employed borrowers.

You won't be able to find these lenders online, but we'll tell you where to look in a little bit, who doesn’t love a little anticipation now and then.

Having the appropriate income documentation

Prepare your documents before you begin applying for car loans to increase your chances of success.

Banking statements are the only legitimate way to demonstrate that you have enough income to pay your debts.

These statements will detail all of the funds that enter and exit your account. If you've been self-employed for more than a year, you should also bring your income tax assessments with you.

The significance of a good credit score

Self-employed borrowers are held to a higher standard than "traditional" borrowers. To qualify for prime interest rates, you must have a credit score of at least 700 and a credit score of at least 600.

If your credit score is below 600, some lenders may be willing to give you a loan, but the interest rate will almost certainly be too high to make it worthwhile

Credit restoration 101

If your credit score isn't where it should be, now is the time to start improving it. You must reduce the total amount of debt you have.

The majority of self-employed Canadians pay for business expenses with their personal credit cards. This is convenient, but it may lead to you carrying an excessive amount of debt. A person with a more than 40% debt-to-income ratio will not be approved for a car loan.

Going through a local car dealership is a great way for self-employed Canadians to get the most out of their car buying experience.

The dealership can assist you in locating lenders with favourable terms based on your credit profile. These same dealerships can also advise you on how to resolve any credit problems you may have.

Contact Unique Chrysler for help, advice and competitive Dunnville car finance and leasing.

Categories: Auto Loan

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