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Car loans in Ontario

Compare car loans in Ontario to buy a new or used vehicle.

Name Product Loan Amount Interest Rate Loan Term Min. Credit Score Requirements Table description
CarsFast Car Loans
$500 - $75,000
4.90% - 29.90%
12 - 96 months
Min. income of $2,000 /month, 3+ months employed
Get a new or used vehicle delivered to your door.
Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs.
Loans Canada Car Loans
$500 - $35,000
0% - 29.99%
3 - 96 months
Min. income of $1,800 /month, 3+ months employed
Compare rates from multiple lenders.
Complete a single application to get quotes from different lenders. Bad credit, CERB and EI borrowers considered.
$7,500 - $85,000
3.99% - 29.99%
12 - 96 months
Min. income of $1,800 /month, 1+ months employed
Available in Ontario only.
Apply online and get your new vehicle delivered to your door anywhere in Ontario free of charge. All credit scores considered.
Coast Capital Car Loan
$10,000 - No Max.
18 - 84 months
Able to service debt payment of $300/month
Competitive rates and flexible terms.
Finance new and used vehicles from one of Canada's largest credit unions. No credit union membership required. Available across Canada except SK, QC, NT, NU, YT.
Splash Auto Finance
$10,000 - $50,000
9.90% - 29.90%
24 - 84 months
Min. income of $2,200 /month, 3+ months employed
Apply with any credit score.
Get financing for a new or used car. Auto loans for borrowers with fair credit, bad credit, no credit or bankruptcy.
goPeer Car Loan
$1,000 - $25,000
8.00% - 31.00%
36 - 60 months
Min. income of $40,000 /year
P2P platform with competitive rates.
Canada's first regulated consumer peer-to-peer lending platform that connects creditworthy Canadians looking for a loan with Canadians looking to invest.
Carloans411 Car Loans
$500 - $50,000
1.90% - 19.99%
Up to 72 months
Min. income of $1,600 /month, 3+ months employed
High application approval rate.
Get connected with suitable lenders to finance your next car, van or truck. Check eligibility for this loan through LoanConnect.
Canada Auto Finance
$500 - $45,000
4.90% - 29.95%
3 - 96 months
Min. income of $1,500 /month, 3+ months employed
Get financing from partnered local lenders.
Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.
LoanConnect Car Loans
$500 - $50,000
9.90% - 46.96%
3 - 120 months
No min. income requirement
Pre-approval in as little as 60 seconds.
Get access to 25+ lenders through this brokerage. Get your funds in as little as 24 hours.

Compare up to 4 providers

For some Ontarians, a car is a necessity. Our guide below explains how car loans in Ontario work, the key features to focus on and the eligibility criteria you’ll need to consider for a successful application.

Where can I get car loans in Ontario?

If you need vehicle financing to help you with your purchase, you have a variety of routes to choose from:

  • Dealership financing. While you’re test driving cars at the dealership, you can seek financing there as well. Your dealer will send your details to multiple lenders to see which ones will approve your loan application.
  • A bank or credit union. Another option is to pre-qualify for a car loan before you go to the dealership. In this case, you’ll apply directly to a bank or credit union of your choice.
  • An online lender. Online lenders are readily available and often have lower eligibility requirements to meet compared to traditional lenders.
  • An online broker. Online brokers like CarsFast or Loans Canada could be an ideal option if you have bad credit. By filling out one simple application, you can get car loan offers from multiple lenders who want to finance you.

Are interest rates for car loans in Ontario different from other provinces?

No, interest rates for car loans in Ontario aren’t different from other provinces. On a whole, Statistics Canada pegs the average car loan interest rate across the country at 4.79% based on data from August 2021.

Ultimately, lenders need to assess how much of a risk it may be to lend you money. Instead of focusing on which province you live in, these are key factors that determine your interest rate:

  • Your credit score. Your lender will pull your credit report to make sure that you don’t have a history of defaulting on loans. You typically need to have a score of 660 or higher to secure a competitive interest rate.
  • Your income and employment. Lenders will ask you about your monthly gross income to make sure you can keep up with payments. They’ll also check if you’re employed full-time, part-time or self-employed or if you’re relying on a pension or government benefits.
  • Your debt-to-income ratio. Your lender will want to make sure there’s a good balance between your monthly debts and monthly income.
  • Loan terms. How much you need to borrow and how long you’ll take to repay your loan will affect your rate, too.
  • The vehicle you’re buying. New or pre-owned, economical or high-end, lenders take stock of what you’re buying and its value. Used cars typically come with higher interest rates.

How to compare car loans in Ontario

With so many options available to you, here’s how to compare car loans to find the best deal for you:

  • Loan amount. Most lenders set limits on how much you can borrow – typically between $5,000 and $100,000.
  • Interest rate. Because the interest rate makes up the majority of a loan’s cost, consider what interest rate each lender is qualifying you for.
  • Fixed vs variable rates. If it’s important to you to secure either a fixed or variable interest rate, make sure your lender offers the option you want.
  • Fees. Beyond interest, lenders may also charge origination fees, prepayment penalties and other administrative charges.
  • Loan term. Most car loans have a repayment period of 6 to 96 months. Ensure your lender provides you with flexibility on loan terms.
  • Trade-ins and down payments. If you have a car you’d like to trade in to contribute towards your new purchase or you have a lump-sum down payment, check that your lender facilitates both options.

Vehicles you can finance

  • New and used cars. Get approved for a loan to buy a brand new or pre-owned car, truck, SUV or minivan. Whether you’re buying old or new, from a dealership, online or private seller, you should have a wide range of makes and models from dozens of manufacturers.
  • RV, marine and powersport vehicle loans. Get approved for a loan to buy everything from camper vans to snowmobiles, motorcycles, powerboats and cabin cruisers.

What are the limits on used car loans in Ontario?

If you’re buying a used car, check that the vehicle’s age isn’t beyond the maximum your lender permits. The typical range is about 7 to 10 years old, at maximum. Here’s a look at how various lenders compare:

Loan ProviderMax. age of car
Car Loans Canada7 years old
Auto Arriba Car Loans10 years old
TD Bank8 years old
LoanConnect Car LoansVaries by lender

Compare used car financing

Where to find bad credit car loans in Ontario

The following are the most common ways to secure a bad credit car loan in Ontario:

  • Via car dealerships. Car dealerships often offer “in-house” financing to consumers with bad credit to help shoppers drive their vehicles off the lot. It’s worth calling a local dealership ahead of time to see if they provide financing for bad credit auto loans.
  • Online lenders. There are plenty of online lenders specializing in bad credit auto loans, which you can qualify for completely online. You can still apply if you’re dealing with bankruptcy, bad credit or no credit.

In both cases, you will encounter higher interest rates and fees for any bad credit car loans you are approved for.

Compare bad credit car loans

Steps to get a car loan in Ontario with bad credit

If you have less-than-perfect credit, don’t be deterred. Follow these steps to improve your chances of securing a loan:

  1. Check your credit. Check your credit report with the credit bureaus to make sure your credit history is accurate and to find out your credit score. If you notice inaccuracies, report the errors and make sure they’re removed before you apply.
  2. Focus on bad credit lenders. Steer away from traditional lenders that require a high credit score and zero in on lenders that accept your credit score. With so many bad credit lenders available, decide on which features are most important to you. These could be speed, loan amounts, interest rate and flexibility with repayments.
  3. Evaluate if you have factors that could improve your application. If you have a trade-in or down payment to apply to your loan, this could help because you’ll require less funding. If you’re willing to include a cosigner, you’ll increase your odds of approval too.
  4. Pick a lender and complete the application. Your application may include providing identification and copies of your pay stubs or bank statements to confirm your salary. It’s worth pre-qualifying before car shopping so you know you have the financing in hand.

What is the average rate for a bad credit car loan in Ontario?

Bad credit car loans typically range from 9.90% to as high as 29.99%. Your rate will depend on the key factors mentioned above.

What to consider before you get a car loan

Buying a car is an exciting milestone. Before you take out a loan for your new set of wheels, take inventory of these questions:

  • How much can I afford to borrow? Before you start taking cars out for a test drive, do some number crunching to figure out how much you can afford for your car budget. Don’t forget to factor in gas and insurance.
  • What kind of car do I want to buy? Zero in on the type of vehicle you want to buy, its price point and whether you’d like to purchase it new or used. With this intel, you’ll have better insight into finding the best loan for you.
  • What kind of loan do I want? Determine if you’d prefer a secured or unsecured loan, fixed or variable interest rate, and how long you’ll need to take to repay your loan. Narrowing this down will provide you with a shortlist of loan providers to suit your needs.
  • Am I eligible? There’s no point in applying for a car loan if you don’t meet the lender’s minimum eligibility requirements. You can find these requirements on the lender’s website or in online reviews.
  • What are the fees? You may encounter dealership fees, loan origination fees, administrative fees and prepayment penalties, just to name a few common charges. Compare lenders and double-check their list of fees and charges.

How to apply for a car loan

The car loan application process can vary wildly depending on the type of financing you choose. Getting financing from a dealership doesn’t involve most of the steps outlined below, for example – instead, you start at the dealership.

1. Compare lenders.

Choose from banks, credit unions, online lenders or dealership financing. A lot of your decision-making may come down to which lender provides you with the best chance of approval at the most competitive rate.

2. Apply for car loan pre-approval from lenders.

When you’re pre-approved for a car loan, it means they’ve qualified you in advance for an auto loan based on a light review of your finances. Compare the offers you have. Book an appointment at your local bank branch, fill out a digital application with an online lender or visit your local dealership to figure out how much you can qualify for.

3. Choose your car loan.

Decide on the loan offer you want to proceed with. To complete your application, your lender will ask to see documents to verify your income, insurance and more. Online lenders typically allow you to upload forms and documents as PDFs.

4. Read your loan agreement before signing.

Read your loan contract with extra care. Note any charges you may incur for late or missed payments, any refinancing changes, and if there is an option to make lump-sum payments ahead of schedule.

5. Buy your car.

With your loan finalized, you should receive the funds to buy your car within a few business days at most. Create a repayment plan, circle due dates on your calendar and make sure you stick to your loan’s terms and conditions.

Required documents to get a car loan in Ontario

Most lenders ask to see at least 3 documents when you apply for a car loan:

  • Your driver’s licence. Your lender might ask to see your licence or require your licence number. Either way, have it on hand.
  • Your insurance card. Some lenders require you to have specific car insurance before applying for a loan.
  • Employment verification. You might be asked to submit tax returns, bank statements or recent pay stubs to prove you make enough to afford your car loan.

Other ways to finance a car in Ontario

  • Personal loans. Instead of a car loan, borrowers can apply for a personal loan that they can use for any legitimate purpose, including buying a car. If you’re willing to secure your loan with your car, you may score a lower interest rate.
  • Home equity loans. Borrowing against the amount you own in your home could be a cheaper way to fund a car loan, though you risk losing your home if you default.
  • New credit cards. If you’ve got a new card with a 0% promotional period, you might be able to put some or all of your car loan on plastic. Try to pay as much off as possible before that period is over to avoid high credit card APRs.

Bottom line

Ontario residents are spoiled for choice when it comes to car financing options. If you want to get the best APR and loan terms, you’ll need to have an excellent credit score, a sufficient income and a vehicle that is viewed favourably by lenders. But don’t be discouraged if your financial situation isn’t in great shape – you can find bad credit car loans in Ontario.

Frequently asked questions

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