Canadians will need to purchase cars in the foreseeable future as most adults rely on a personal vehicle as a primary mode for transportation. Also, many will need to finance and purchase a car in a short timeframe. Whether someone has good or poor credit, car financing in Regina is a subject in which every motorist needs to be well informed. When financing a vehicle, there can be lots of unfamiliar jargon and terms. After all, what do things like “balloon payment,” “solvent,” and “buying on margin” actually mean in plain English? And how does that directly relate to one’s car loan in Regina? There are other frequently asked questions including, “Should I find a cosigner?” and “Is a variable-rate loan a better option?” The answer is that it almost always depends on any one person’s unique past and present situation.
Many people have poor credit, and car financing in Saskatchewan can be a major concern. For many, life would be very challenging without access to a reliable vehicle. Sometimes purchasing a new car is a wise financial decision regardless of poor credit. Often times, repairs on older vehicles can become increasingly expensive due to an overall shortage of available spare parts. Plus, other expenses including rental cars can add up while old cars are repeatedly in the shop for long periods of time. For those in immediate need of a vehicle with poor credit, car financing can be an absolute necessity. It can be tricky to make the right decision. Is it better to have higher monthly payments on a new car in hopes that there will be no payments for costly repairs? Or is it best to finance an older, used car for lower monthly payments? Again, there is no one right answer for everyone. The only solid piece of advice that applies to everyone is that it is best to stay informed. Car buyers should not be afraid to ask questions when talking about financing their next vehicles if they are unfamiliar with a specific term or what the car dealer is saying altogether. It is always better to know exactly what is being signed than making a commitment that is not fully understood and could be potentially harmful in the future.
When it comes to getting a car loan in Regina, credit and car loans are intertwined in a way that makes them somewhat codependent. In order to get a great car loan, you’ll need to have great credit. However, in order to have great credit, it’s wise to have a history of car loans that you have successfully managed or repaid.
Here are a few ways that we want our customers to be aware of when it comes to car financing in Regina and credit working together:
How credit is built
Credit is determined by five different factors: payment history, types of credit, amounts owed, new credit, and length of credit history. These five factors all account for varying percentages of a credit score. However, payment history accounts for 35 percent of a credit score – the largest percentage. Payment history means the track record that an individual has developed based on loans that he or she has taken out and then repaid.
In order to develop a track record of repaying loans, it is important to actually take a loan out in the first place. Many people begin to build their credit by taking out small loans, such as a car loan, and then committing to repaying it. When repaying the loan, customers are able to develop positive credit histories.
Starting from zero
It is true for many people that they have no credit because they have a history of paying for cash or simply have not yet needed to take out a loan. However, it is important to develop a credit history so that people can qualify for low interest rates and high loan amounts. For example, if you ever wan to get a home mortgage loan, you’ll need to have good credit to get a good rate. Some people start by opening small accounts, such as credit card accounts – even if they don’t use those credit cards. Taking out a small car loan is also an excellent way to begin to build a credit history that will help you to get a lower interest rate down the road.
It’s important to keep a positive credit score by making wise financial decisions whenever possible. This means that you’ll need to repay your loans if you take them out. You should minimize debt in order to improve your credit score if it is bad. There are other tricks and tips that we are happy to share with you that will help you to get a better credit score and get a better loan. Contact us today for details or more information on getting a bad credit car loan in Regina.