Finance Your Electric Car With Auto Loan No Credit

More commonly known as auto credit, auto credit is a consumer credit type loan assigned to purchasing a new or used vehicle. While it was the most widely used method of financing a few years ago, it now faces competition from the rental with option to purchase (LOA) and long-term rental (LLD). What are the specificities of a car loan? Why use it to acquire your future electric car? You will find the answers to these questions in this article.

What Is A Car Loan?

A car loan (or car loan) is a loan from a financial organization to finance a new or used vehicle. The borrower must repay the amount, plus a staggered interest rate over a fixed term. This reimbursement occurs in monthly installments defined by various parameters (annual effective annual rate, amount borrowed, duration of the credit, etc.).

This loan can be of the total value of the acquisition price of the vehicle or only of a part, according to the available contribution. Car credit can be found in two formats: assigned and personal.

The Assigned Credit

The allocated credit is a loan intended exclusively to finance the acquisition of goods or the provision of services. Its use is, therefore, necessarily linked to the sales contract signed with the seller or service provider. The affected credit can also be offered by:

• A financial institution such as a bank or finance company
• Directly by the seller of the goods or by the service provider

The amount borrowed must be between $200 and $75,000 for more than 3 months.

Personal Credit

Personal credit is a loan allowing you to finance the acquisition of a good or service freely. Unlike allocated credit, its use is not linked to a specific asset or project.

Thus, the amount borrowed can be used to finance any property without any particular proof other than the classic documents to be provided for any kind of loan.

Traditional financial institutions such as banks or credit organizations offer personal credit. The maximum amount granted can be at most 75,000 CAD.

Who to Contact To Take Out A Car Loan?

The panel of players offering car loans is extensive. It is indeed possible to find offers from:

• Car dealerships
• Traditional or online banking institutions
• Organizations specializing in consumer credit
• Insurance companies
• Auto brokers

Contacting several entities to play the competition and benefit from the best conditions on loan is more than recommended.

How To Take Out A Car Loan?

In principle, the first step in taking out a car loan is choosing the loan offer that best suits your situation and budget.

With this in mind, using car loan simulators offered by certain financial institutions or going through specialist car loan brokers is wise.

Auto Credit Simulators

Auto loan simulators allow you to adjust your monthly payments according to the duration and the amount borrowed to ensure the loan project is realistic.

Car Loan Brokers

Brokers are professionals serving as an intermediary between a buyer and a seller. They have an extensive network and an excellent knowledge of the market, allowing them to compete and therefore find the most advantageous car loan offer. Going through their services to find the credit offer that best suits your needs can be fascinating. 

The Credit File

After comparing different offers and selecting the most advantageous, the financial institution will constitute a credit file to ensure the borrower's solvency. This study should verify that the borrower will be able to repay the monthly payments until the expiry of the contract.

Auto Approvers provides the best auto financing deals in London, Ontario. Contact us for more details.