Car Loans

Automobiles have recently become a crucial part of human life. So, many of us depend on them to make a living, so when our car breaks down and needs to be replaced, its something we can’t turn deaf ears on, you will probably need money to change it and if you don’t have cash for it you probably need a loan from a traditional or from a loan providing services.

Car Loans

So, if you are considering buying a new car and you are looking for the best car loan providers available in Canada, you might have come across the keywords “zero down car loan”. So, what do we mean by zero down payment is a type of payment that offers 100% financing, meaning that you put no money down at first, i.e. front payment. But are these zero-down car payments legit? And is this type of loan a wise choice for everyone? Don’t worry at the end of the article you are going to get your answers.

What is a Bad Credit Car Loan?

A bad credit auto loan is a car loan given to people who have bad credit or no credit. When your credit score is between 300 and 900, lenders can quickly decide how risky it is to give you money.

In Canada, we have two credit reporting companies: Equifax and Transunion. These agencies create your credit score and consider various aspects when determining what number to offer you. A higher number indicates that your credit score is good, while a lower number indicates that your credit history has been more uneven.

Can I get approved for a zero-down car loan?

Yes, Most lending companies in Canada offer a car loan with no down payment. To qualify for a “no down payment car loan,” there are, certain conditions that need to be met like;

  • Proof of income.
  • Proof of Car insurance.
  • Government-issued identification. e.g. passport
  • Proof of residence

How to Get Approved for a 0 down car Loan?

Obtaining a $0 down auto loan implies that the lending firm is taking a bigger risk than the traditional down payment option, therefore the lender may choose to charge a higher interest rate. Normally, the lender will assess the risk level based on the answers to these questions;

  • Can you be trusted to make your payments on time?
  • Are you going to get a good price on the car you’re about to purchase?
  • Can you afford to pay back the loan?

Can I get a car loan with bad credit?

Yes, in most cases, having bad credit won’t prevent you from getting a car loan. The disadvantage is that you will most likely pay more in interest than a borrower with a good credit score. But how do I go about finding a bad credit car loan? As you are aware, obtaining a vehicle loan can be difficult most times because most local banks in Canada prefer not to take risks.

You don’t have to worry, in this article, I will cover some of the best alternative lenders that offer car loans to Canadian citizens. But, before I go any further in this post, I’d want to make a suggestion. I understand that it may be tempting to go to the nearest auto dealership and sign your first car loan agreement, which is not a bad idea. I recommend that you go via one or two lenders who provide the best automobile loan services, preferably with a low-interest rate. So, a nice approach to go about it is to use an online car loan platform, such as;

Top Bad Credit Car Loan Providers in Canada

1. Loans Canada

Loan Canada is not a lending organization; rather, it is a loan referral platform that collaborates with other financial service providers to provide various types of loans such as personal loans, car loans, debt consolidation loans, and bad credit loans. This company has an excellent certification with a Better Business Bureau and also has a number of loan firms listed on its website. To learn more about Loans Canada, click on this link.

  • Interest rate: 1.99% to 46.96%
  • Loan term: 3-60 months.
  • Maximum loan amount: Up to $50,000.
  • Eligibility: Resident of Canada and employed for at least 3 months with proof of income.


  • Compare multiple loan platforms in one location.
  • The online application process is quick and simple.
  • Other different types of loan options are also available on this platform.


  • Interest rates can be as high as 46.96%.
  • Sometimes early repayment penalties may be applied to some bad credit loans.

2. LoanConnect

LoanConnect is another leading lending platform that features various Canadian lending institutions. They help to connect individuals looking for financial assistance, goods, or services with lending institutions that provide financial assistance outside of typical mortgage banks. does an amazing job by connecting borrowers to a network of local lenders with interest rates starting from 1.90% – 46.96% (note that the APR is based on one’s personal credit) and the loan are from 72 to 84 months. You can learn more by visiting the LoanConnect website for more insight.

3. Cars Fast

Car Fast is another popular car loan provider in Canada; regardless of your credit score, you can still be approved for a car loan. This platform has partnerships with top loan providers such as; envision, HSBC, CIBC, RBC Royal Bank, Dealer Finance, Ritco, Ally, WS Leasing Ltd, and many others.

Through LendingArch and a large network of car dealerships across Canada, this platform provides bad credit car loans for persons who are in need of a vehicle. So, even if you have no credit history, you need not be discouraged because you may still be approved for a car loan.

To get started visit CarsFast to complete the online application, (it takes 2 minutes or less to complete the application form). Once approved, you can select to shop for your favorite automobile from CarsFast’s 350 dealership partners.

The following are some of the essential requirements you must meet before applying for an automobile loan.

  • You must be at least 20 years old or older.

  • You should at least be receiving $2,000 per month in income whether you are employed or self-employed.

  • Have a valid driver’s license.

  • You must be a resident of Alberta, British Columbia, or Ontario.

  • Finally, you must have been employed for at least three months or more.

4. Car Loans Canada

Car Loans Canada is specifically developed for individuals in need of a vehicle but who do not have the necessary funds. So, if you live in a province such as Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick, Ontario, British Columbia, Alberta, Manitoba, or Saskatchewan, Car Loans Canada can help you get a vehicle loan.

This organization works with a network of automotive partners, including lenders who can offer bad credit car loans at any time.

  • Loan amount: Varies

  • Interest rate: Up to 29.95%
  • Term: Up to 96 months

To qualify for a loan on this platform, you must make at least $1,800 per month and have a valid driver’s license. Visit their website to learn more about Car Loans Canada.

This table summarizes the four car loan providers we have discussed so far.

Loan Providers

Loan Amount

Interest Rate



Loans Canada

$500 – $50,000

1.99% – 46.96%

4-60 months



Up to $50,000

1.90% – 46.96%

12-72 months



Up to $75,000


12-96 months


Car Loans Canada


Up to 29.95%

Up to 96 months


How to Get a Car with a Bad Credit Score?

Getting a car loan with bad credit or no credit is quite easy, but there are several requirements you must meet in order for your loan to be approved faster.

  • First, you need to show proof of income; if you are able to prove that you earn $1,800 – $2,000 or more per month, your chances of being approved for a car loan are likely to increase.

  • Bank Account.

  • If you can afford a downpayment, please do so because it may assist you to get your loan approved quickly. Alternatively, you can find a co-signer or guarantor to help you with your application.

Additionally, a lender may request the following documents;

  • Valid driver’s license

  • Proof of address

It is sometimes advisable to know your credit score, but if you don’t, you may check your score for free on this website.

As I mentioned earlier in the post, it is advisable to compare rates across different lenders to find the best rate that fits into the financial situation. Also, remember to thoroughly read the contract terms to verify that there are no hidden fees or penalties.

Bad Credit Car Loans FAQ

What is the minimum credit score for a car loan?

In Canada, credit scores range from 300 to 900.

What is a good credit score to buy a car with no down payment in Canada?

A credit score of at least 650 can qualify you for a low-interest car loan.

Can I get a car loan with a credit score of 500?

Yes, there are multiple car loan providers in Canada that offers bad credit car loan. The alternative ones have been listed above.

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