Best car loans

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Best for buying a car completely online: CarsFast Car Loans

$500 – $75,000
Loan amount

4.9% – 29.9%
APR

12-96 months
Term

• Info
• Features
• Details

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
• Limited to commercial-sale vehicles

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.

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Best for bad credit: Car Loans Canada

$7,500 – $55,000
Loan amount

3.99% – 29.95%
APR

12-84 months
Term

• Info
• Features
• Details

Search thousands of vehicles online from dealers across the country with with Car Loans Canada and get matched with affordable financing options, including $0 down options.

• Flexible payment options
• Open-ended loans
• Long terms
• No down payment
• Large inventory

• Only some
• lenders showcased
• Fee for cancellation
• Additional fees
• High rates for bad credit
• Not available in Quebec or the territories
• No online quotes

Loan amount	$7,500 – $55,000
APR	3.99% – 29.95%
Term	12-84 months
Interest Rate Type	Fixed
Min. Credit Score	300
Fees	Varies by lender, loan type and province
Origination Fee	N/A
Turnaround Time	48 hours

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Best for loan options: Loans Canada Car Loans

$500 – $35,000
Loan amount

0% – 29.99%
APR

3-96 months
Term

• Info
• Features
• Details

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.

• Affordable interest rates
• Flexible loan terms
• Low minimum credit score requirements
• Bad credit, CERB and EI borrowers are also eligible

• You can only get quotes from providers affiliated with this service (meaning you could miss out on great rates elsewhere)
• You'll have to call and speak to a customer service representative over the phone to negotiate your loan terms

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

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Best for fast pre-approval: LoanConnect Car Loans

$500 – $50,000
Loan amount

9.9% – 46.96%
APR

3-120 months
Term

• Info
• Features
• Details

LoanConnect's search engine shows lenders with highest likeliness of positive results with pre-approval in as quick as 60 seconds.

• 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.

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Best for private sales: Auto Arriba Car Loans

$500 – $100,000
Loan amount

8.99% – 29.5%
APR

6 - 84 months
Term

• Info
• Features
• Details

An Auto Arriba Car Loans is a great option when you're trying to finance a private vehicle sale from individuals and sites like Kijiji. You can finance vehicles up to 10 model years old or a maximum of 180,000 kilometres. Once you're approved for financing, the experts at Auto Arriba send an inspector to look at the vehicle you want to buy to make sure it's roadworthy. From there, you just need to sign your financing agreement and bill of sale before you pick up the keys from the seller.

• Apply from the comfort of your own home in less than 15 minutes
• Borrow up to $100,000
• Good option if you have bad credit, since loan decisions depend more on factors like your income and employment status

• Down payment may be required depending on the age and condition of the vehicle you want to buy
• Does not operate in Quebec

Loan amount	$500 – $100,000
APR	8.99% – 29.5%
Term	6 - 84 months
Interest Rate Type	Fixed
Fees	Contract fee of $499.00
Origination Fee	N/A
Turnaround Time	30 minutes

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 payment	Monthly payment	Interest 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.

Banks

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

Dealerships

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:

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 to use this car loan monthly payment calculator

  1. Enter the amount you want to borrow to buy a new car under Loan amount. This might not be the same as the cost of your car, since many lenders require a down payment.
  2. Write the amount of time you have to pay off your car loan under Loan terms (in years). If your loan term is in months, divide it by 12 first.
  3. Enter the interest rate you expect to pay on a car loan under Interest rate. If your car loan comes with fees, enter the annual percentage rate (APR) instead.
  4. Click Calculate.

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

Low interest

Compare low interest car loan options and keep payments down.

Secured

Use your vehicle as security and benefit from lower rates.

Below average credit

Compare loan options for people with below-average credit scores.

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.

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Name	Product	Min. Loan Amount	Interest Rate	Loan Term	Min. Credit Score	Requirements
Car Loans Canada		$7,500	3.99% to 29.95%	12-84 months	300	Min. income of $2,000 /month, 3+ months employed	Search thousands of vehicles online, including $0 down options, from dealers across the country and get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.	Go to site More Info	Compare	loading Fetching your data...
CarsFast Car Loans		$500	4.90% to 29.90%	12-96 months	300	Min. income of $1,800 /month, 3+ months employed	Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs. Apply online to purchase a new or used vehicle and get the vehicle delivered to your door.	Go to site More Info	Compare	loading Fetching your data...
Loans Canada Car Loans		$500	0% to 29.99%	3-96 months	300	Min. income of $1,800 /month, 3+ months employed	Get access to financing from multiple lenders across Canada through a single application with Loans Canada. Bad credit, CERB and EI borrowers are considered.	Go to site More Info	Compare	loading Fetching your data...
Coast Capital Car Loan		$10,000	Varies	18-84 months	650	Able to service debt payment of $300/month	Finance or lease both new and used vehicles with competitive rates and flexible terms from one of Canada's largest credit unions.	Go to site More Info	Compare	loading Fetching your data...
Canadian Auto News		$7,500	4.49% to 29.90%	12-84 months	300	Min. income of $2,000 /month, 3+ months employed	Answer a few simple questions to get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.	Go to site More Info	Compare	loading Fetching your data...
Canada Auto Finance		$500	4.90%-29.95%	3-96 months	300	Min. income of $1,500 /month, 3+ months employed	Canada Auto Finance is a broker that connects borrowers with partnered local lenders. Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.	Go to site More Info	Compare	loading Fetching your data...
Carloans411 Car Loans		$500	1.90% to 19.99%	Up to 72 months	300	Min. income of $1,600 /month, 3+ months employed	Get connected with suitable lenders through CarLoans411. Finance your next car, van or truck with loans available in amounts from $500 to $50,000. Check eligibility for this loan through LoanConnect.	Go to site More Info	Compare	loading Fetching your data...
LoanConnect Car Loans		$500	9.90% to 46.96%	3-120 months	550	No min. income requirement	Get access to 25+ lenders through LoanConnect's brokerage. Receive pre-approval in as fast as 60 seconds and get your funds in as little as 24 hours.	Go to site More Info	Compare	loading Fetching your data...
Fairstone Secured Personal Loan		$5,000	19.99% to 23.99%	36-120 months	560	Established credit history and own your home	Fairstone offers secured personal loans up to $35,000.	Go to site More Info	Compare	loading Fetching your data...

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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

• Can I get the best car loans with a low income?

  Some lenders loan to people with low income, however, the amount you’re approved for will vary depending on the lender’s confidence that you’ll be able to pay it back. Generally, the minimum income required to buy a car in Canada is around $1,800 per month before any taxes or deductions. If you work 40 hours per week at a minimum wage job, then your income exceeds this threshold. If your income is too low, you may be approved for a car loan if you have a cosigner.

• Do I need a down payment for a car loan?

  Unless you have an impeccable credit history, most lenders will want you to provide a down payment. If no down payment is required, expect the loan to come with a high interest rate.

• Can I get a loan to buy a used car?

  You can get a loan to buy a used car, but lenders may have restrictions on the age of vehicles they will finance as well as the mileage that vehicles can have. Find out more about getting a used car loan here.

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