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Best car loans

Need financing for your new car? Find the best car loan for you and hit the road faster.

How do you find the best car loans for your financial situation? It’s not an easy process, but by comparing lenders and keeping an open mind, you can find the best auto loan for your next car. Learn the best car loan options in Canada, and what loan features you should be on the lookout for.

Best for any type of car: CarsFast Car Loans

$500 – $75,000
Loan amount
4.9% – 29.9%
12 - 96 months
Browse thousands of vehicles from dealers across Canada with CarsFast and get matched with financing that meets your needs, and purchase a new or used vehicle and get it delivered to your door.
  • Easy application
  • Multiple lenders
  • Quick financing
  • No collateral required
  • Long terms
  • Bad credit doesn't matter
  • Available across Canada
  • No posted interest rates
  • High interest rates for bad credit
Loan amount $500 – $75,000
APR 4.9% – 29.9%
Term 12 - 96 months
Interest Rate Type Fixed
Min. Credit Score 300
Fees Varies by lender, loan type and province
Origination Fee N/A
Turnaround Time Get pre-approved in less than 60 seconds.

Best for large loan amount: Coast Capital Car Loan

Starting at $10,000
Loan amount
18 - 84 months
Coast Capital is one of the biggest credit unions in Canada, and you can get its car loan without a membership. The car loan does not have a maximum loan amount, so you can make a large car purchase.
  • Reputable credit union
  • Competitive interest rates
  • Finance a wide range of vehicles, including classic cars, luxury cars, boats and leisure vehicles
  • Borrowers with bad credit are not eligible
  • Not available in Saskatchewan, Quebec, Northwest Territories, Nunavut and Yukon
Loan amount Starting at $10,000
Term 18 - 84 months
Interest Rate Type Fixed
Min. Credit Score 650
Fees No application or origination fees
Origination Fee N/A
Turnaround Time 48 - 72 hours

Best for low credit score: Splash Auto Finance

$10,000 – $50,000
Loan amount
9.9% – 29.9%
24 - 84 months
Splash works with a variety of borrowers, including those with bad credit, no credit or previous bankruptcies.
  • Flexible lender
  • Fast approval and funding
  • Loyalty program
  • High interest rates for bad credit
  • Not available in Quebec
Loan amount $10,000 – $50,000
APR 9.9% – 29.9%
Term 24 - 84 months
Interest Rate Type Fixed
Min. Credit Score 300
Origination Fee N/A
Turnaround Time 10 minutes if approved

Best for comparing lender offers: Loans Canada Car Loans

$500 – $35,000
Loan amount
0% – 29.99%
3 - 96 months
With one Loans Canada Car Loans application you can compare multiple lenders on its innovative online car loans platform, helping you find the best terms and interest rates on your car loan for your unique needs and budget. Loans Canada typically matches you with either a national lender or one that works exclusively in your province or territory.
  • Get matched with lenders that want to finance you
  • Anyone across Canada can apply
  • Fast approval and funding
  • High interest rates for bad credit
  • Your information will be shared with third-party lenders
Loan amount $500 – $35,000
APR 0% – 29.99%
Term 3 - 96 months
Interest Rate Type Fixed
Min. Credit Score 300
Fees Varies by lender
Origination Fee Dependent on lender
Turnaround Time Varies

Best for speed: LoanConnect Car Loans

$500 – $50,000
Loan amount
9.9% – 46.96%
3 - 120 months
LoanConnect is an online broker that can match you with lenders. Get multiple offers within minutes and your funds in as little as 24 hours.
  • Easy application
  • More choice
  • Free service
  • Transparent terms
  • High loan amounts
  • Quick deposits
  • No collateral required
  • Few eligibility requirements
  • Limited providers
  • Personal info required
  • Fewer options for bad credit
Loan amount $500 – $50,000
APR 9.9% – 46.96%
Term 3 - 120 months
Interest Rate Type Fixed
Min. Credit Score 550
Fees Varies by lender, loan type and province
Origination Fee N/A
Turnaround Time Get pre-approved in as little as 60 seconds, and receive money in as little as 24 hours from the time of your application.

Best for flexibility: TD Car Loan

Starting at $7,500
Loan amount
84 months
Get TD financing from over 4,500 dealerships. Finance a new or used vehicle, including cars, trucks, RVs, marine vehicles, powersport vehicles and privately sold vehicles. Choose between a fixed and variable rate with terms up to 96 months.
  • Lengthy terms
  • Finance many types of vehicles
  • Use the TD Wheels App to search for a car and pre-qualify for financing
  • Payment extensions should you need flexibility
  • Pay off your loan without penalty
  • No down payment required
  • Maximum $50,000 for privately sold vehicles
  • Rates are not shown online
Loan amount Starting at $7,500
Term 84 months
Interest Rate Type Fixed

Best for buying a car online: Clutch car loans

$7,500 – $65,000
Loan amount
4.99% – 7.99%
36-84 months
Clutch has a large inventory of used cars and is available in AB, BC, NB, NS, ON and PEI. Shop for a car online, have it delivered to your door and 'test own' for a period of time.
  • Test own for 10 days
  • Complimentary 90-day warranty
  • New cars not available
  • Prep fee in Halifax
Loan amount $7,500 – $65,000
APR 4.99% – 7.99%
Term 36-84 months
Interest Rate Type Fixed
Origination Fee $899
Turnaround Time Less than 24 hours

Best for excellent credit: RBC car loan

Starting at $7,500
Loan amount
Up to 96 months
As one of the biggest banks in Canada, RBC can offer competitive rates and flexible terms. Pre-qualify for the amount you need before you visit a dealer.
  • Choose between a fixed and variable rate
  • Finance a wide range of vehicles, including RVs and boats
  • Newcomers to Canada can apply
  • Skip 1 payment per year
  • Rates are not posted online
  • Not available in Nunavut
Loan amount Starting at $7,500
Term Up to 96 months
Interest Rate Type Fixed
Fees Not disclosed online

Best for recreational vehicle or leisure vehicle: Scotiabank Car Loans

Up to $200,000
Loan amount
up to 96 months
Get up to $200,000 for your recreational vehicle. Take up to 20 years to pay off your RV loan. If you're getting a leisure vehicle, take up to 72 months to buy a used motorcycle or leisure vehicle that's up to 5 years old.
  • Large loan amounts
  • Choose between a fixed and variable rate
  • Customize your payments
  • Pay off your loan anytime without penalty
  • Rates are not posted online
  • You need good to excellent credit to qualify
Loan amount Up to $200,000
Term up to 96 months
Interest Rate Type Fixed

The 4 basic features of car loans in Canada

When shopping for the best car loan, you’ll need to consider 4 main features. Your car loan is how much you’ll borrow from your lender to help you make your purchase. When you’re shopping for your car loan, you’ll need to consider the basic components of your financing, including:

  • The principal. Your principal is the total amount you’re borrowing from your lender. The principal amount will depend on how much you need to pay for the car you’d like to buy, excluding your down payment, and any add-ons you may select, and any fees your lender or dealer may charge you.
  • The interest rate. Your interest rate is the percentage your lender will charge you on your principal loan. Several factors go into deciding your car loan interest rate, including your credit score, and the type of vehicle you’re buying.
  • The term. The terms of your loan dictate how long it’ll take you to repay your loan. You can set up financing for as short as 2 years right up to 7 or 8 years, depending on how much you’re borrowing and how much you can repay each month based on your budget. Longer car loans come with lower monthly payments but you may end up paying more interest in the long run.
  • Down payment. Lenders may be more willing to offer favourable terms if you have a down payment. Plus, you’ll have smaller monthly payments and pay less towards interest. For example, let’s say you borrow $15,000 for a car on a 60-month term with a 7.45% APR. The table below shows the cost of your monthly payment and the total amount you’ll pay in interest, depending on your down payment. You can see that by having a $3,000 down payment, you end up saving $600 on your loan and reduce your monthly payments by $60.
    Down paymentMonthly paymentInterest paid
    0% ($0)$300.21$3,012.78
    10% ($1,500)$270.19$2,711.50
    20% ($3,000)$240.17$2,410.22

Where can I find the best car loan in Canada?

The truth is there is no single best car loan option out there. Banks, online lenders, dealerships and credit unions all offer plenty of auto financing options that could suit your needs. The key to finding the best car loan for you is to shop around and compare features like the interest rate and term available to you based on your financial situation. After doing your homework, you’ll understand what you’re eligible for, and narrow down what works for your budget and lifestyle.

Here are the 4 places to shop for the best car loans.


Major Canadian banks will offer auto financing you can inquire about while you’re car shopping at the dealership. These tend to be the most traditional routes for securing a loan to help you buy your new vehicle. You can also work with your bank to secure a personal loan you can use to purchase a new car. Your personal loan can be secured, using one of your assets as security, or it can be unsecured with a higher interest rate.

Buying a car with a personal loan

Online lenders

Online car loan providers are one of the fastest ways to get approved for and to secure auto financing. They’re the most willing to work with people with bad credit, no credit or a history of bankruptcy, but the loans on offer may come with higher interest fees. In most cases, you simply fill out an online application form, including your contact details, and the lender will contact you for next steps to work on the details for your loan. Some online lenders act as a broker, connecting you with local dealerships they have partnered with. Check out the range of online car loans in Canada.

Online car loan providers

Credit unions

Credit unions will often offer financing with affordable interest rates, longer terms and more lenient credit requirements compared to banks. The catch? You have to become a member of the credit union to be eligible for a loan, which can draw out the process compared to online lender financing or dealership financing.

Our guide to credit union auto loans


While car shopping, you can also inquire about getting financing directly from the dealership. This could be a good option if you’re having trouble securing a car loan from a bank or credit union. In-house financing via your dealership can make the loans process easier because you’re paying them directly.

But keep in mind, you likely won’t find the best car loans at a dealership because dealers outsource their loans to direct lenders. It may also markup the interest rate offered by its lending partners by a few points to make a profit. Make sure to look at the fine print to dodge typical dealership tactics – in-house financing usually comes with the most upfront and ongoing fees compared to the other options.

Dealership financing vs a car loan

What are the best car loan rates in Canada?

The best car loan rates will differ based on your financial situation, but with strong financial health, the best interest rates generally range between 0% to around 5%. Across the board, the less risk you pose to a lender, the better your interest rate and loan terms will be. Your interest rate is determined based on a handful of factors, including your:

  • Financial situation. Your income, how stable it is, and your down payment are taken into account by lenders.
  • Creditworthiness. Your credit score is a major consideration because lenders need to know that you are a trustworthy candidate for an auto loan. Make sure you don’t have a history of late payments, and a high debt-to-income ratio before applying if you’re aiming to lock in the best car loan interest rates.
  • Loan needs. Lenders need to know how much you need to borrow, how long it’ll take for your to repay your loan, and what type of car you’re purchasing (new vs. old).

Your lender will show you your car loan interest rate as an annual percentage rate (APR), which takes into account the total cost of your loan repayments, including compound interest, fees, and any other charges you’ve agreed to pay for.

Our guide to car loan interest rates

How does your credit score impact the best car loan rates?

Credit scores range from 300 and 900 in Canada, and help lenders decide your creditworthiness. Lenders typically see those with credit scores of 660 and up as low-risk borrowers while credit scores below 560 fall into the bad credit category. Here’s a look at how your credit score could affect your interest rate:

Credit scoreExample interest rate range
660 – 9000% – 4.9%
500 – 60010% – 23.99%
300+Up to 29.99% to 46.96%

Note: The interest rates in the table above are just example rates and do not take into account all of the factors lenders consider when evaluating a loan application. Actual lenders may charge different interest rates.

How car loan interest rates are charged

The interest rate on your car loan can be charged in two different ways: simple interest and compound interest.

  • Simple interest. With simple interest, the interest is only charged on the principal amount you have borrowed.
  • Compound interest. With compound interest, the interest is calculated factoring in both the principal (how much you took out for your loan), and the interest accrued since the start of your loan.

Types of car loan interest rates

You can opt for two different kinds of interest rates on your car loan too: fixed and variable.

  • Fixed interest rate. With a fixed interest rate, your monthly repayments stay the same every month because your interest rate is locked in.
  • Variable interest rate. With variable interest rates, your repayments may fluctuate depending on the market interest rate at the time. Overall, the rate tends to be lower.

Car loan monthly calculator

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7 questions to ask when shopping for the best car loans

In order to find a car loan you can qualify for, ask yourself the following question when comparing lenders:

  1. Am I eligible? Many lenders have credit and income requirements, and some only lend within certain provinces. Make sure you meet lenders’ qualifications before you do anything else.
  2. Is my car eligible? Can you actually finance the car you want with this loan? Some lenders have restrictions on the age or type of vehicle that can be financed. Confirm with you loan provider that you’ll be able to purchase the car you want before you apply.
  3. How much does the loan cost? Consider both the interest rate and fees that come with the loan. Compare the interest rates of similar loans to find the one that’s most competitive.
  4. Are the payments flexible? Find out if you’ll be able to repay your car loan early without being penalized or if you can make additional payments without being charged a fee. These features can save you money if you plan on paying the loan off ahead of time.
  5. What are the loan terms? Car loan terms are generally between two and seven years. The longer the loan term you choose, the less your monthly payments will be. However, the cost of interest is always substantially higher with longer loans.
  6. How much can I borrow? The loan amount the lender offers you depends on a couple of factors. Your credit history and financial situation will be important, but for a secured car loan, the amount of the loan will ultimately depend on the car’s cost.
  7. What is the type of loan? It can be a loan for a new or used car, a low-interest car loan or loans for those with poor credit. You can even finds loans that offer pre-approval before you decide whether to accept the loan. Since all situations are different, look into all your options to find out which type of loan will benefit you the most.

3 types of car loans to consider

5 tips to get the best car loan

  • Consider a newer vehicle. New car loans come with lower interest rates than used car loans because the lender is taking on less of a risk. Most new car loans allow you to secure a vehicle that’s less than two years old, so you may be able to finance a slightly used vehicle with a lower rate.
  • Quotes without credit inquiries. Too many inquiries can have a negative impact on your credit score — don’t inquire with too many lenders. If you’re applying for a car loan rate estimate, make sure no hard credit checks are already listed on your file. (Hard credit checks appear on your record whenever a lender makes a full, detailed inquiry into your credit history.)
  • Detail all of your assets and finances when applying. Some lenders offer lower interest rates if you have a large sum of money to fall back on. Even if you are applying for a secured car loan, listing other assets on your application may give you access to a better rate.
  • Borrow less than you’re buying the car for. Having a down payment or trade-in vehicle can cover part of the cost of a new car. If a lender sees that you don’t need to borrow 100% of the purchase price of the vehicle because some of the cost is already covered, you may be eligible for a lower interest rate.
  • Compare your options before you apply. Making car loan comparisons will let you know which lender has the lowest rates available. If you don’t want to do this yourself, you can consider using the services of a car finance broker. [/fin_what_is_next]

Getting the best car loan with bad credit

While having a credit score between 300 and 600 will limit your options, there are plenty of lenders who will still work with you and help you get a car loan. Just keep in mind that your loan amount you’re offered may be smaller and come with higher interest rates.

Car dealerships and online car loan lenders offer bad credit car loans for consumers who are dealing with bankruptcy, bad credit, or no credit at all. With bankruptcy, the process of getting a car loan may take a bit more time because your lender may need more information from your trustee.

Full guide to getting a car loan with bad credit.

Need a car loan with bad credit? Try a secured car loan.

With steep interest rates and extra fees, bad credit car loans may not be financially feasible. If their terms are out of your price range, secured financing products are also worth looking into. The more security you can provide to your lender, from including a co-signer or using an asset as collateral, the more likely it is to offer you financing. Secured financing options include:

  • Home equity loans. With home equity loans, you’re using the total real estate value of your home (excluding the remaining balance on your mortgage) as collateral to secure your car financing. This is a great way to lock in better car loan interest rates but you need to tread carefully. Your lender has the right to seize your home if you can’t keep up with your loan repayments.
  • Guarantor/co-signed loan. If you can’t qualify for a traditional car loan on your own, you can ask a family member or close friend to co-sign on your loan and act as a guarantor. The catch? If you default on payments, your guarantor will have to pick up on your loan, so make sure they’re aware of what they’re committing to. Both of your credit scores will take a hit if you default on your loan.
  • Secured installment loans. Once you’re approved by a lender for a secured loan, you’ll receive a lump sum loan, which you’ll need to repay in installments. Most of the time, your car purchase is used as your collateral but you can also offer up other assets to secure your installment loan. If you can’t keep up with your car loan, your lender has the right to seize the assets you used to secure your loan.

What do I need to apply?

What you’ll need to provide depends on the lender and the type of loan you’ve chosen — here’s what you’ll need:

  • Proof of your identity — either a passport or driver’s license
  • Financial details including any available credit you have, your debt and your assets
  • Proof of your income
  • Some lenders may require a void cheque or pre-authorized payment form to make automatic withdrawals from your bank account whenever payments are due
  • For secured loans, you’ll need to provide vehicle information including the make, model, year, purchase price and VIN (vehicle identification number). If you’re getting dealership financing, the dealer can usually provide this information for you. If you’re getting non-dealership financing, you will need to provide the lender with details about your dealer.
  • A down payment (if you have one)

Check exactly what you need with your lender before you submit your application.

Compare car loans in 2021

We’ve curated a list of quality, Canadian car loan providers to help narrow down your options when shopping for the best car loan. Once you’ve settled on a provider, click the “Go to site” button to apply.

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 $1,800 /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

Bottom line

Finding the best car loan for your financial situation and lifestyle can save you a lot of money over the long run. You’ll need to compare loan features like interest rate, term length and fees to make sure you lock in the best deal. you can learn more about how car loans work and compare providers in our comprehensive guide.

Frequently asked questions getting the best car loans

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