Which lender is offering the best car loans in Waterloo?

Which lender is offering the best car loans in Waterloo?

Posted on July 27, 2022

Ontarians who are shopping for a new car have a large number of potential lenders they could do business with. Since Ontario has the largest population in Canada, it stands to reason that it would also have a large number of lenders that offer car loans.

Our Waterloo auto loans team are going to help you navigate the world of auto finance and come out on top; just stick around to the end.

Different types of lenders

There are different types of lenders in Ontario that offer auto loans, and each one has a particular niche they focus on.

Some lenders will specialize in providing loans to borrowers with perfect credit and stable income, this is primarily reserved for the banks who are able to access capital directly from the Bank of Canada and open markets.

Another group of lenders specializes in offering loans to borrowers with credit issues or those that are not able to prove their income.

These lenders are called “Alt+A or subprime”, they are not able to access capital at low-interest rates like the chartered banks and are forced to raise through other channels like general partnerships or using brokers to bring investments from accredited investors in Canada.

These investors are willing to take on added risk for a higher interest rate, so these alternative lenders are already starting at a disadvantage because their borrowing costs are higher.

Where these alternative lenders shine is their ability to underwrite and fund a deal that the chartered banks could never be able to service.

Which lender is right for you?

We have touched on the different types of lenders that are out there in the Canadian automotive financing world; the question begs to be asked, which category applies to you?

Each lender has its own underwriting guidelines, and those are constantly changing as we are fast approaching a recession.

If your credit score is under 600, you fall into subprime; if your credit score is 620 or higher, you are considered a safer bet.

If your credit score is higher than 700, then you qualify for the best rates, provided your income is enough to service the debt.

It’s all about the ratios

In the world of finance, one of the most important ratios that anyone in finance looks at when assessing a prospective borrower is how much debt is in relation to their income; this is expressed as a percentage.

Suppose the borrower’s debt to income is forty percent or higher. In that case, they are considered risky, and the loan would not be approved without additional equity in the deal, usually in the form of a larger down payment.

Securing the best car loans in Waterloo

You’ve received a crash course in finance; now, we need to shift gears and show you where to access the most competitive car loans in Ontario.

It is one of the best-kept, open secrets; we’ll give you a hint, it’s not online! The best deals can be found at your local dealership.

They are able to get you approved no matter your situation and can have you behind the wheel of a new car today; the onus is on you to contact the dealership right now.

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

Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!