For many Ontarians, a car is a necessity. And if you’re shopping for a new set of wheels, there’s a good chance you’ll also need to start comparing car loans.
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. But before that, let’s take a look at Ontario car loans from 15 lenders.
If you need vehicle financing to help you with your purchase, you have a few options 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. Popular banks in Canada offering car loans in Ontario include Scotiabank, RBC, CIBC and TD Canada Trust.
An online lender. There’s a wide range of online lenders to choose from and they often have more lenient eligibility requirements compared to traditional lenders.
An online broker.Online car loan brokers could be an ideal option if you have bad credit. By filling out one simple application, you can compare car loan offers from multiple lenders who want to finance your purchase.
Can you get bad credit car loans in Ontario?
If your credit score is between 300 and 600, you’ll likely need a bad credit car loan in Ontario.
In general, bad credit car loans come with higher interest rates and fees since there’s more risk for the lender. So it’s important to compare your options before committing to a loan to ensure you’re getting the best rates for your financial situation.
What is the average rate for a bad credit car loan in Ontario?
Interest rates on bad credit car loans in Ontario typically range from 14% to 29.99%. The financing interest rate you’re approved for will depend on key financial factors like your credit history, income and each lender’s specific eligibility criteria.
Steps to get car loans for bad credit in Ontario
If you have bad credit, follow these steps to improve your chances of securing a car loan in Ontario:
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.
Focus on bad credit lenders. Steer away from traditional lenders that require a high credit score, and instead 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.
Check whether you could improve your application. If you have a trade-in or down payment to apply to your bad credit car loan in Ontario, it could help your chances of approval because you’ll require less funding. If you’re willing to include a cosigner, you’ll increase your odds of approval too.
Pick a lender and complete the application. You can apply by providing your personal details and employment and income information. You’ll need to use your driver’s licence as proof of ID, while the lender may ask for 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.
Car loan calculator in Ontario
Calculate your potential car loan monthly payments.
Car loan calculator
Calculate how much you could expect to pay each month
With so many options available, here’s how to compare options to find the best car loan for you:
Eligibility requirements. Check the lender’s credit score or income requirements you’ll need to meet to qualify for a loan. Also check whether there are any vehicles the lender won’t finance, such as used cars over a certain age.
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 offers.
Fixed vs variable rates. If it’s important to you to secure either a fixed or variable interest rate, check whether your lender offers the option you want. Make sure you understand the pros and cons of each option too.
Fees. Beyond interest, lenders may also charge origination fees, prepayment penalties and other administrative charges. Check the fine print for the full details.
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.
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. According to data from the Bank of Canada, the average car loan interest rate around the country is 8.24%.
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. They’ll also take into account how long you’ve been in your current job.
Your debt-to-income ratio. Your lender will want to make sure there’s a good balance between your monthly debts and monthly income, which is why they look at your debt-to-income ratio.
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 much do car loans in Ontario cost?
The total cost of your loan will vary depending on the interest rate and loan term that apply. To give you an idea of the costs involved, let’s look at the example of a $25,000 loan over a three, five or seven-year term. As you can see in the table below, while a longer loan term means a more manageable monthly payment amount, it also results in you paying a whole lot more interest over the life of the loan.
Loan amount
Loan term
APR
Monthly payment
Total cost
$25,000
3 years
7.99%
$784
$28,199
$25,000
5 years
7.99%
$507
$30,408
$25,000
7 years
7.99%
$390
$32,721
$25,000
3 years
15.99%
$879
$31,637
$25,000
5 years
15.99%
$608
$36,470
$25,000
7 years
15.99%
$497
$41,699
Vehicles you can finance in Ontario
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:
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. 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. Compare the offers you have to find the best deal.
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 ID.
4. Read your loan agreement before signing.
Read your loan contract carefully. 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 and make sure you stick to your loan’s terms and conditions.
Required documents to get car loans in Ontario
Most lenders ask to see at least three 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. Most lenders require you to have 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.
How they help: Loans Canada is an online broker with the nation’s largest lender network. You can submit one application and then compare offers from multiple lenders, and borrowers with good credit and poor credit are welcome.
APR: 0% - 46.96%.
Loan term: 3 - 60 months
Serviced areas in Ontario: All
Eligibility requirements: Must have stable employment and earn at least $1,800 monthly income
Accepts bad credit: Yes
What do people have to say about Loans Canada?
Customers who praise Loans Canada mention the user-friendly application and loan comparison process. Some negative reviewers seem to refer to scammers impersonating Loans Canada to try and get customers’ sensitive personal and financial information — a scam that is mentioned in an alert on the Better Business Bureau website.
How they help: CarsFast offers an online platform where you can compare car loans and rates from multiple lenders. It works with a network of dealers across Canada to help you find the loan you need, and specializes in auto loans for borrowers with bad credit and limited credit histories.
APR: 3.90% - 29.90%
Loan term: 12 - 96 months
Serviced areas in Ontario: All
Eligibility requirements: Must have steady employment and a gross income of over $2,000/month
Accepts bad credit: Yes
What do people have to say about CarsFast?
There are limited online reviews for CarsFast. However, its website is owned and operated by LendingArch, which has received largely positive reviews on Trustpilot. Several reviewers praise LendingArch for simplifying the loan application process, but there are occasional complaints about customer service issues.
Site
Rating
Better Business Bureau reviews and rating
2.33/5 stars based on 3 reviews, C+ rating (for LendingArch, which runs CarsFast)
Trustpilot reviews
4.1/5 stars based on 133 reviews (for LendingArch)
How they help: Car Deal Canada is an online car loan broker that offers financing for all types of credit from more than 15 partner lenders, which includes the Big Five banks. You can access over 5,000 used vehicles through its network of partner dealerships across Canada.
APR: 7.49% - 31.99%
Loan term: 12 - 84 months
Serviced areas in Ontario: All
Eligibility requirements: Must have a minimum income of $2,200 /month and have been employed for 3+ months
Accepts bad credit: Yes
What do people have to say about Car Deal Canada?
Car Deal Canada typically very has positive ratings, with reviewers praising its customer service for speedy response times and professional service. Customers also liked how easy the buying process was.
How they help: CarDoor is an online vehicle buying platform where you can shop an inventory of hundreds of used cars, click through over 20 pictures of any vehicle and apply for a car loan completely online. After your purchase, your car will be delivered to your home, where you’ll have a 14-day money back guarantee period to test drive the vehicle for up to 750 km.
APR: From 7.99%
Loan term: 12 - 96 months
Serviced areas in Ontario: The primary service area is within a 300km radius of Toronto, but you can speak with a CarDoor Service Concierge to see if they can accommodate a delivery elsewhere in Ontario
Eligibility requirements: Minimum credit score of 500, 3+ months employed, Max.1 bankruptcy, Ontario only
Accepts bad credit: Yes
What do people have to say about CarDoor?
CarDoor has a generally positive reviews on google with customers praising the convenient, car-buying process along with the company’s friendly, responsive and helpful customer service. There are very few negative customer reviews.
How they help: Dealerhop is an online marketplace that can help you purchase, finance and sell vehicles by connecting you with a fulfillment partner who works with you to find the right vehicle and car loan. It’s a free service that accepts bad credit applicants and offers vehicle delivery after purchase.
APR: 6.99% - 29.99%
Loan term: 12 - 96 months
Serviced areas in Ontario: All
Eligibility requirements: Minimum credit score of 300, must have a minimum income of $2,000/month with 3+ months of employment
Accepts bad credit: Yes
What do people have to say about Dealerhop?
There are very few reviews available online for Dealerhop, so unfortunately we can’t learn about what kind of experiences customers have had with the company.
How they help: Clutch is a car buying and financing platform that operates in Ontario and Nova Scotia. It allows you to apply for financing, shop for a vehicle and then have that car delivered to your door so you can test drive it for 10 days / 750km.
APR: From 8.49%
Loan term: 12 - 96 months
Serviced areas in Ontario: All. Location in Etobicoke if you want to pick up your new car in person
Eligibility requirements: Minimum credit score of 580, must have been employed for at least three months, maximum of one bankruptcy
Accepts bad credit: No
What do people have to say about Clutch?
With over 2,000 Google reviews, Clutch has received plenty of positive customer feedback. Many reviewers praise Clutch for its easy, no-fuss purchase process and home delivery, while there are limited negative reviews.
How they help: Canada Auto Finance specializes in car loans for people at all credit levels. You can apply online with $0 down payment and no co-signer, and you’ll be matched with a loan from a dealer near you.
APR: 4.90% - 29.95%
Loan term: 3 - 96 months
Serviced areas in Ontario: All
Eligibility requirements: Must have income of at least $1,500 monthly. All bankruptcies must be discharged
Accepts bad credit: Yes
What do people have to say about Canada Auto Finance?
There are limited reviews for Canada Auto Finance available online. The company has a customer rating of 4/5 stars on Finder, with customers generally appreciating the expediency of the financing process. On the other hand, some customers mentioned that interest rates were relatively high.
How they help: Driving With Steve helps borrowers at all credit levels connect with auto lenders around the country. It’s easy to apply online, and you’ll need a stable source of income to qualify for a loan.
APR: Varies
Loan term: Not disclosed
Serviced areas in Ontario: All
Eligibility requirements: Must have a steady source of income
Accepts bad credit: Yes
What do people have to say about Driving With Steve?
Driving With Steve has an average score of 3.8/5 from 62 reviews on Finder. Positive reviews praise Driving With Steve’s quick and easy application process and helpful customer service, but some negative reviewers complain about high costs.
Site
Rating
Better Business Bureau reviews and rating
N/A
Trustpilot reviews
3.5/5 stars based on 51 reviews
Google reviews
N/A
Reviews verified as of March 22, 2024.
9. Autoloans.ca
How they help: Autoloans.ca specializes in loans for borrowers with bad or no credit. You can apply online and get approved 24/7, browse an inventory of over 5,000 vehicles, and have the car you buy delivered to you anywhere in Ontario.
APR: Not disclosed
Loan term: Not disclosed
Serviced areas in Ontario: All
Eligibility requirements: Must have a steady source of income
Accepts bad credit: Yes
What do people have to say about Autoloans.ca?
Many reviewers praise Autoloans.ca for providing friendly customer service to help them find the right financing and vehicle. However, it’s also worth mentioning that at the time of writing, the Better Business Bureau had issued an alert for Autoloans.ca after being unable to contact the company via mail or telephone.
Site
Rating
Better Business Bureau reviews and rating
1/5 stars based on 1 reviews, C+
Trustpilot reviews
N/A
Google reviews
4.9/5 stars based on 1,074 reviews
Reviews verified as of March 22, 2024.
10. Approval Genie
How they help: Approval Genie allows you to apply for Ontario car loans online or at its locations around Ontario. The company says it offers loans for borrowers with good, bad or no credit, including people who have been rejected by other dealerships.
APR: Not disclosed
Loan term: Not disclosed
Serviced areas in Ontario: Dealerships in Mississauga, Scarborough, Ottawa, Kingston, Hamilton and Whitby
Eligibility requirements: Must have a steady source of income
Accepts bad credit: Yes
What do people have to say about Approval Genie?
Approval Genie has an impressive number of five-star reviews, with happy customers commonly praising the company’s friendly customer service and willingness to work with bad-credit borrowers. Some negative reviewers complain about pushy sales tactics.
Site
Rating
Better Business Bureau reviews and rating
1.4/5 stars based on 10 reviews, F rating
Trustpilot reviews
4.8/5 stars based on 4,154 reviews
Google reviews
4.5/5 stars based on 291 reviews (for the head office location)
Reviews verified as of March 22, 2024.
11. DriveAxis
How they help: DriveAxis is the direct-to-consumer portal of Axis Auto Finance (a Finalist in the Finder: Car Loans Customer Satisfaction Awards 2023). As a fintech, DriveAxis specializes in sub-prime car loans, so borrowers with bad credit are welcome to apply online. Instant financing decisions are available, you can browse thousands of vehicles from DriveAxis’ network of dealers, and the car you choose can then be delivered to your door.
APR: Not disclosed
Loan term: Not disclosed
Serviced areas in Ontario: All
Eligibility requirements: Must have a steady source of income
Accepts bad credit: Yes
What do people have to say about DriveAxis?
Positive reviewers praise DriveAxis for helping them get financing even with less than perfect credit, but there are some occasional complaints about poor customer service.
Site
Rating
Better Business Bureau reviews and rating
3.77/5 based on 62 reviews, A+ rating (for Axis Auto Finance)
Trustpilot reviews
N/A
Google reviews
4.7/5 stars based on 5,294 reviews (for Axis Auto Finance)
Reviews verified as of March 22, 2024.
12. Kaicen Financial
How they help: Kaizen Financial specializes in prime and non-prime lending, including car loans in Ontario for borrowers with bad credit, no credit and past bankruptcy. You can apply online and get a decision within 24 hours, then shop for a car online and have it delivered to your door.
APR: 3.49%-29.95%
Loan term: 12 - 96 months
Serviced areas in Ontario: All
Eligibility requirements: Must have a steady source of income
Accepts bad credit: Yes
What do people have to say about Kaicen Financial?
Kaicen Financial has a five-star rating from almost 100 Google reviews, with customers mentioning its easy application process and professional customer service.
Site
Rating
Better Business Bureau reviews and rating
No reviews, A+ rating
Trustpilot reviews
N/A
Google reviews
5/5 stars based on 99 reviews
Reviews verified as of March 22, 2024.
13. Approval Team
How they help: Approval Team accepts all credit scores for Ontario car loans. You can apply online and receive a decision within 48 hours, and borrowers with past bankruptcies or who are new arrivals to Canada are also welcome to apply.
APR: Not disclosed
Loan term: Not disclosed
Serviced areas in Ontario: All
Eligibility requirements: Must earn at least $1,800 monthly income and be insurable
Accepts bad credit: Yes
What do people have to say about Approval Team?
Happy customers praise Approval Team for fast approvals and friendly customer service, while there are occasional complaints about high borrowing costs.
Site
Rating
Better Business Bureau reviews and rating
1/5 stars based on 2 review, C+ rating
Trustpilot reviews
2.9/5 stars based on 2 reviews
Google reviews
4.5/5 stars based on 852 reviews
Reviews verified as of March 22, 2024.
14. Get Approved Canada
How they help: Based in Ottawa, Ontario, Get Approved Canada offers car financing regardless of your credit history. It’s partnered with more than 23 lenders.
APR: Not disclosed
Loan term: Not disclosed
Serviced areas in Ontario: All
Eligibility requirements: Must have a steady source of income
Accepts bad credit: Yes
What do people have to say about Get Approved Canada?
People in different financial situations have left positive reviews about Get Approved Canada’s friendly and helpful service.
Site
Rating
Better Business Bureau reviews and rating
1/5 based on 1 review, A+ rating
Trustpilot reviews
N/A
Google reviews
4.7 stars based on 117 reviews
Reviews verified as of March 22, 2024.
15. Car Loan Masters
How they help: Car Loan Masters is a subprime auto lender that offers bad credit car loans in Ontario from a network of over 50 lenders. You can apply online and get approved within 20 minutes, then shop for a vehicle online and have it delivered to your door.
APR: 4.99%-29.5%
Loan term: Not disclosed
Serviced areas in Ontario: All, but specializes in the Greater Toronto Area and surrounding areas
Eligibility requirements: Must have minimum monthly income of $1,400
Accepts bad credit: Yes
What do people have to say about Car Loan Masters?
Customer reviews for Car Loan Masters are largely positive, with borrowers typically mentioning a smooth and seamless financing process.
Site
Rating
Better Business Bureau reviews and rating
N/A
Trustpilot reviews
N/A
Google reviews
4.8 stars based on 150 Google reviews
Reviews verified as of March 22, 2024.
Other ways to finance a car in Ontario
There are a few other options to consider when looking for ways to finance a car:
Personal loans. Instead of a car loan, you can apply for a personal loan that you 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
You’re spoiled for choice when comparing car financing options in Ontario. 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 also find bad credit car loans in Ontario.
Frequently asked questions about car loans in Ontario
It depends on the lender you'd like to apply to. Bad credit lenders often have a lower threshold, with some even accepting no credit history or a history of bankruptcy. Most traditional lenders, such as banks and credit unions, will require a good credit score of at least 660.
You can finance a car in Ontario by applying to a lender. Your options include banks, credit unions, online lenders and dealership financing. Each option comes with its own set of eligibility criteria, APRs and loan terms, so make sure you shop around for the best deal.
In Ontario, dozens of online lenders specialize in helping people who have bad credit, a limited credit history or a history of bankruptcy or insolvency. Bad credit auto lenders will require you to have a steady source of income so they know you can stay on top of your monthly payments. You'll pay a higher interest rate because they're taking a bigger risk by lending you money.
The maximum loan amount available depends on the lender. Some lenders have a $50,000 maximum, others don't impose any limit on the amount they're willing to lend. However, the size of the loan you can qualify for will depend on your credit score, income, and the make and model of vehicle you want to buy.
Credit scoring systems usually count multiple auto loan inquiries within a certain time frame — typically two weeks — as one. One inquiry may cause a small, temporary drop in your credit score, but it's better than multiple inquiries.
Be very wary of any lender that claims to offer guaranteed car loan approval. Lenders need to assess your financial situation before deciding whether you can afford to repay your loan, so steer clear of any lenders that promise "no refusal" loans.
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.
Feedback
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
