If you’re looking for car loans in Alberta, you have plenty of options, from banks and credit unions to dealership financing and online lenders. Some lenders even specialize in bad credit car loans in Alberta, so keep reading for tips on how to find financing that meets your needs.
Compare car loans in Alberta
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Car loan calculator for Alberta
You can use the car loan monthly payment calculator below to see how much you could end up paying for auto financing in Alberta.
According to Statistics Canada, the average car loan interest rate in Canada is 8.24%. However, if you have bad credit, rates can be as high as 29.99%.
There are several factors that can influence the interest rate you will get for a car loan. These include:
Yes, you can get bad credit car loans in Alberta. But you won’t get financing from a traditional lender like a bank or credit union, because you won’t be able to meet their strict eligibility criteria. Instead, you’ll need to use an online car loan broker or compare online lenders yourself to find the financing you need.
Lenders that offer bad credit car loans in Alberta include:
There are many lenders out there that are willing to work with borrowers with bad credit. Rather than focusing on your credit score, they’ll look at factors like your income and any existing debts you have before deciding whether you can afford to repay the loan.
A word of warning: while there are many legitimate bad credit lenders out there, this area also attracts its fair share of scammers. Do your due diligence to make sure you’re dealing with a reputable lender before sharing any personal or financial information.
Yes, it’s possible to get car title loans in Alberta from select lenders, mostly online lenders. This type of loan lets you use your car as collateral to secure a loan. You can think of it like a home equity loan, accept your using the equity in your car.
You can read or full guide to car title loans to learn more about how to get a car title loan and browse lenders offering this type of loan in Alberta and throughout Canada.
Where to find car loans in Alberta
You have a few options to consider when shopping for Alberta car loans:
Dealership financing. Applying for dealership financing is a simple and convenient way to get your next set of wheels. There are options for good and bad credit available, and loan terms of up to 7-8 years. However, the downside of this option is that you don’t get to compare loans yourself and shop around for the best deal.
Banks and credit unions. You can apply with your bank or credit union and get pre-approved for a car loan before you visit the dealership. The “Big 5 Banks” and many other financial institutions offer car loans in Alberta, and you can compare your options to get the best rate. However, many banks and credit unions have strict lending criteria, so you’ll need good to excellent credit to qualify.
Online lenders. Online lenders also offer car loans in Alberta, with terms of up to 96 months available in some cases. These lenders have more lenient eligibility criteria than traditional lenders, and some specialize in bad credit car loans. Just make sure you’re dealing with a legit lender before you apply.
Online brokers.Online car loan brokers allow you to compare multiple loan offers by filling out a single application. If you’ve got bad credit, a broker can help you compare lenders that offer loans to borrowers in your financial situation.
How to get the best car loan in Alberta
When you’re comparing car loans in Alberta, compare the following factors to find a loan that’s right for you:
Interest rate. Compare loans by looking at the APR (annual percentage rate). This combines the interest rate and any fees (like origination fees) included in the loan, so it gives you a more accurate idea of the cost of borrowing.
Fees. Check whether there are any other fees that may apply to the loan, such as NSF fees, late payment fees and prepayment penalties.
Down payment. Will you need to make a down payment to qualify for a loan? If so, what percentage of the purchase price will you need to pay upfront? Many lenders require a down payment of 10-20%, although some offer no down payment car loans.
Loan term. The longer the loan term, the smaller your monthly payment will be, but the more you’ll end up paying in interest in the long run. Choose a loan term that provides a monthly payment you can afford but keeps the interest you’ll pay to a minimum.
Repayments. Check what the repayment schedule will be (weekly, bi-weekly or monthly) and what your regular payment amount will be. If you want to pay back the loan early, can you do so without incurring a prepayment penalty?
Lender. Finally, do your research and read customer reviews to make sure you’re dealing with a legitimate lender.
How much do cars in Alberta cost?
According to AutoTrader’s December 2023 Price Index, the average cost of a new car in Alberta is $69,647, up 10.1% on the previous year.
The average cost of a used car in Alberta is $40,156, an increase of 3.6% compared to the previous year. So even if you buy used with a 20% down payment, you’ll still need to borrow more than $32,000 to buy your next set of wheels.
How to refinance a car loan in Alberta
Auto loan refinancing in Alberta allows you to access a lower interest rate or lock in a more affordable monthly payment. Here’s how to do it.
Review your finances. The first step is to consider your current financial situation. For example, if your credit score has improved since you first took out a loan, or if you’ve scored a significant pay rise, it’ll often be a good time to refinance and qualify for a better interest rate.
Review your current loan and the value of your vehicle. Next, consider the terms of your current car loan to see if you might be able to access a better deal. Remember to check if you’ll be slugged with a prepayment penalty for paying it back early. You’ll also need to check the current value of your car to find out whether refinancing is a viable option.
Compare loans. Compare car loan refinancing options across a range of lenders. Get pre-approved first before submitting a full application and undergoing a credit check, and choose the lender that offers the best value.
Pay off your loan. Once approved, pay off your old car loan and start making on-time payments towards your new loan.
Frequently asked questions about car loans in Alberta
The credit score you need to qualify for a car loan varies between lenders. Traditional lenders like banks and credit unions will typically only offer financing to borrowers with good to excellent credit, so you'll need a credit score of 660 or more. However, online lenders are more likely to work with fair credit (560 to 659) or bad credit (below 560), so a less than perfect credit history won't necessarily stop you getting a loan. For more information, check out our guide to the credit score needed for a car loan.
Minimum and maximum loan amounts vary from one lender to another. As a general guide, lenders offer car loans ranging from $5,000 to $100,000.
If you have a close friend or family member who has excellent credit and is willing to cosign your loan, this is certainly an option worth considering. Applying with a cosigner could allow you to access a lower interest rate and a larger loan amount with a wider range of lenders. But it can put pressure on your relationship with the cosigner, and they'll be responsible for repaying the loan if you can't.
Be extremely cautious about dealing with any lender that promises guaranteed car loans. Any legitimate lender will want to assess your financial situation before deciding whether to offer you a loan. That's why if a lender promises guaranteed approval, it could be a sign of a scam.
Tim Falk is a freelance writer for Finder. Over the course of his 15-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
Who is currently offering zero percent financing on cars in Canada? See offers from popular car brands in Ontario, BC, Alberta and more.
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