Your credit score is a critical factor when you apply for a car loan in Nova Scotia. Lenders go through your credit score to check the eligibility, and if you have a bad credit score, it can become difficult to get a loan. But is there any way to get approved for Nova Scotia car loans? Here are some tips for how to get a car loan even with bad credit.
Get Your Documents Ready
Car loan applications can get rejected due to inadequate documents. It’s essential to get all the relevant documents ready before applying for the loan. Following documents will be required for Nova Scotia car loans:
- Bank statements
- Proof of income
- Driver’s licence
- Auto insurance
- Proof of identity
- Proof of residency
Get a Co-Signer
When you have bad credit, getting a co-signer for the car loan will improve the chances of approval. It reduces the risk for the lender. A co-signer can be your friend or a family member.
Several auto financing companies like East Coast Financing offer car loans with bad credit even if you don’t have a co-signer. So, if you don’t have a co-signer, you can often still get a loan.
Boost Your Income
Some banks and auto financing companies in Nova Scotia are ready to offer you a car loan with bad credit. But if you don’t have sufficient income, it can hinder your chances of qualifying for the car loan. You usually need a minimum income of $1,600 per month to become eligible for Nova Scotia car loans. If your income is low, you need to figure out how you can increase it to get quick approval.
Higher Down Payment
The down payment is a certain percentage of the overall car price that is paid upfront. When you have bad credit, a higher down payment will increase the chances of car loan approval as it reduces the risk for the lender. However, there are auto financing companies in Nova Scotia that approve car loans without any down payment.
Use a car financing calculator to analyze the down payment required and the monthly instalment. It will help you set your budget for the car purchase.
Get Pre-Approved Car Loan Offers
While banks and dealerships may not offer bad credit car loans, auto financing companies can give you pre-approved loan offers. You can submit your details online and check the eligibility.