06
Sep
2021

Discover How to Get a Car Loan with No Down Payment

A car is an essential aspect of life today. Apart from being a wonderful means of transport, a car defines you. However, acquiring a car with bleeding pockets seems impossible. Fortunately, you can find a reputable dealership in Ottawa today to get a car loan without a down payment. This article is prepared to give you whatever you need to get behind the ride of your dreams with no down payment.

Car Loan
Image credit: thecarclub.ca

What does a car down payment mean?

This is the first amount of money you pay to buy a car. Paying a down payment lowers the overall cost of the vehicle you’re interested in. When getting a car loan, the down payment lowers the amount for financing. The down payment assures the lender that you’re serious about getting a car loan. And, it is a form of insurance just in case you fail to pay the loan.

Committing a small payment significantly reduces the amount you’re to pay monthly to make the loan more manageable. Keep in mind that most car dealerships request a down payment of about 20 percent while others request 12 percent of the car cost. When thinking about buying a car, the first thing you’ll think about is the down payment. However, it is possible to get the car of your dreams today without a down payment.

Buying a car with zero down payment

There are various reasons to get a zero down payment car loan.  So, before getting approved for this loan, your risk level is assessed. The dealership will have car finance expects to review your income and credit history to determine your ability to pay. Doing this is to evaluate your ability to make the monthly payments easily. Keep in mind that an average car loan is usually not more the 10 percent of your gross pay every month.

The car value determines how much you’re to pay for monthly payments. Fairly priced vehicles and those with the likelihood of maintaining steady value have higher chances of getting approved for this loan. You can also get this loan with bad credit but through a different process. The mileage and year of manufacture matter a lot before getting approved.

How to apply for a car loan without a down payment

Consider dealer financing

When needing to buy a car but have bad credit or don’t have a down payment, you can get the car of your dreams from a reputable dealership in Ottawa. You just have to go to their website and fill a form with relevant details. Then, you will have to wait for your request to be approved.

A great dealership usually has a huge stock of vehicles for you to browse and find one matching your requirements and budget. So, you just have to get on the phone and speak with the manager of the dealership for additional details regarding the loan.  

Consider a Cosigner

When planning to get a car loan with no down payment, you can use a friend or family with a strong credit score. Having a consigner increases your chances of getting the car of your dreams without a down payment. The consigner also allows getting a lower interest. However, keep in mind that some companies might try to take advantage of your situation knowing the vehicle is for you with a weaker score to give you an annual percentage rate in the medium range.  

Your consigner will share the responsibility of paying the loan with you. If you habitually miss payments or pay late, your credit score lowers including that of your consigner. Sometimes the consigner might feel they have a right to the car. To prevent chances of disagreement in the future, be diligent with payments and title.

Improve your credit score

A steady job or regular monthly income, credit record showing ability to meet payments, and having lived in a single place for a year increase chances of getting a car loan.  A credit score of more than 680 increases the chances of having the lender allowing giving you a car loan without a down payment. However, the loan is likely to carry higher interest. Having a credit score below 580 might make your application be rejected.

So, trying to clean your credit report before going or this loan is very important. One thing you can’t ignore doing is checking the accuracy of the credit report. Afterward, try boosting your credit score including paying all bills on time and paying off debts and credit card balances. A good credit score increases your chances of getting this loan.

Bottom line

Don’t let lack of a down payment be the stumbling block to getting behind the wheel of your dream ride. You just have to visit a reputable Ottawa dealership’s website and apply for a car loan without a down payment today.

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