Bad Credit Car Finance: Getting a Car Loan with Bad Credit

March 27, 2020 Financing & Leasing

Sometimes life throws you a curveball and puts you in a tough financial position—it happens to the best of us. Having bad credit can make it more difficult to purchase big items but we believe it shouldn’t impact your ability to buy a car. Our goal is to get you into a vehicle with a payment plan that works for your specific lifestyle, regardless of your credit history.

We do bad credit car finance differently. Read on to learn about our process, how we’re different from traditional lenders and the tools we have to help you get approved.

How we do credit

You deserve some credit, which is why we work with you to assess your current credit situation. At Birchwood Credit, we do our own in-house financing—we’re actually the only in-house vehicle financing operation in Winnipeg that truly lends its own money. By lending our own money, we can approve more individuals, give you better repayment terms and better interest rates. You also have access to our Birchwood dealerships so you have plenty of selection when it comes to choosing your vehicle.

We can help customers who may not be approved for a car loan through traditional financial institutions. But how can we do this?

We look at your entire financial situation when making an approval decision. It’s not based solely on your bad credit score (or lack thereof) which means we won’t turn you away just because you have bad credit. These are the four key pieces of information we need when you want to get a car loan with us:

Valid driver’s license
Above 18 years of age
Canadian resident
Monthly income of at least $1,500

Once we’ve got this information, we’ll meet with you to talk more about your income and financial situation so we can get you approved for financing.

What do other lenders do?

At Birchwood Credit, we offer in-house financing which means we can accommodate more customers since we lend our money directly. It also means our loan requirements are a lot more flexible.

If you were to apply for a loan through a bank or credit union, you’d have to provide a lot more personal information. Just to give you a comparison of how we do things differently, this is what you would have to provide when applying for a car loan through a bank:

Social Insurance Number
Credit history, credit report and credit score
Address and previous address (if your current address is less than 3 years)
Income (employer, salary)
Monthly housing costs including rent/mortgage, hydro, taxes
Monthly payments including loans, credit cards, lines of credit
All household costs/bills
Vehicle bill of sale (to finalize the loan)

If you have a bad credit score and apply through a bank, it’s almost guaranteed you won’t be approved for a loan. This is why an in-house financing lender (like us) is a better option for those with bad credit, as we have more control over the loan approval process and can offer better rates.

How do we evaluate your credit score?

Even though we evaluate more information than just your credit score, it’s still important to know where yours is at. In Canada, the lowest (and worst) credit score you can get is 300 and the best is 900. People are generally deemed riskier borrowers if they have a score under 620 and often won’t get approved for a loan. Those with scores above the 620 mark are considered average or better and will likely get approved at traditional lenders.

While we do check your credit score, we take your whole financial situation into account. We understand that bad credit can happen as a result of repossession, recently moving to Canada, divorce, low income or unexpected life events. Our experts have experience with all kinds of credit challenges. We’ll work with you to compassionately understand your situation and help find a budget and payment plan that works for you.

Related Post: What is Considered Bad Credit?

Our tools and how they can help

We have a couple online tools to help you navigate the world of bad credit car finance. You can try out our Car Loan Calculator to help you determine your budget and payments. You can play around with the loan duration and monthly loan payments to get an idea of what you can afford. All it takes is three easy steps:

Select the price of your vehicle. Choose the total vehicle cost (the principal) that you think fits your price range.

Choose the term of your loan. The term is the length of time that payment will be made on your loan. You can slide the dial between one and 72 months to see how different terms will affect your estimated monthly payment.

Pick the credit category you fall under to calculate your estimated interest rate. It’s okay if you don’t know your credit score—just take a guess at which category you fall under. This section is to give you an idea of how interest rates can affect your payments. The higher your credit score, generally the lower your interest rate and monthly payment.

You can also check out our other blog posts for tips on budgeting, car care, auto news, financing and leasing.

How can you get approved for a car loan with Birchwood Credit?

If you’re ready to apply for a car loan, it’s easy. You can fill out our online Car Loan Application form in minutes and get an approval decision within 24 hours.

All you have to do is select a vehicle, provide your contact and employment information and our credit experts will contact you. It’s that easy! It’s quick, hassle-free and you can apply from the comfort of your home.

If you still have questions about our bad credit car loan requirements, you can get in touch with one of our knowledgeable credit experts today.

Written by

Sydney Small