Understanding car loans
Overwhelmed? We're here to break it down for you.
Here, you’ll learn how car loan payments are calculated, including interest rates, loan terms, and monthly payment amounts, so you can plan confidently! We’ll also walk you through what’s typically required to qualify for a loan, from credit scores to income and documentation. Plus, we’ll explain how managing a car loan responsibly can actually help build and improve your credit over time. Whether you’re a first-time buyer or looking to upgrade, we want to help you make informed, smart decisions.
Principle
The principal of a car loan is the original amount you borrow to purchase the vehicle, before any interest or fees are added. For example, if you buy a car for $20,000 and put down $5,000, your loan principal would be $15,000. As you make payments, part goes toward reducing the principal, while the rest covers the interest charged by the lender. Reducing the principal faster can help lower the total interest you pay over the life of the loan.
Term
Interest Rate
The interest rate of a car loan is the percentage the lender charges you for borrowing the money. It’s applied to the loan principal and helps determine how much you pay in addition to the amount you borrowed. A lower interest rate means you’ll pay less over the life of the loan, while a higher rate increases the total cost. Your credit score, loan term, year and condition of the vehicle, and the lender’s policies all affect the rate you’re offered.
Your car loan’s principal, term, and interest rate all work together to determine how much you’ll really pay. Even a 1-2% difference in the interest rate can mean thousands of extra dollars over the life of the loan. That’s where CreditShift Auto Solutions is different from regular auto dealerships. We work with every major auto lender in Canada to secure you the lowest rates and the best terms. We’re shifting the power away from the banks and back to you, the consumer, by helping you secure better rates and terms that keep more money in your pocket, not theirs.
What is required to qualify?
Employment & Income
Typically, you need to be at your current job for three or more months and earn at least $1,800 per month to qualify for a car loan, but with CreditShift Auto Solutions, approvals can happen with as little as one month on the job. We also consider other forms of income, including certain types of government assistance, cash jobs, and self employment, to help more people get approved and on the road faster.
Driver’s License
A driver’s license isn’t always required to get approved for a car loan. While most lenders prefer a full license, we work with several who accept learner’s permits — and even some who only require a valid government-issued ID. At CreditShift Auto Solutions, we’re all about opening more doors to help you get behind the wheel.
Bank Account
You will need an active bank account to get approved for a car loan. Some lenders require you to provide a void cheque or a pre-authorized debit form so they can set up your loan payments. If you’re unsure how to get these, our team at CreditShift Auto Solutions is here to guide you through the steps and make sure you’re ready.
Down Payment
We specialize in $0 down car loans, so a down payment isn’t required, but if you have money saved up, it can work in your favor! Putting money down can help lower your monthly payments or shorten your loan term, which means you’ll save money on interest, over time. At CreditShift Auto Solutions, we help you find the best option for your situation, whether that’s with or without a down payment.
Current Address
You’ll need to provide your current Canadian address when applying for a car loan. Any Canadian address will work. If you’ve been at your current address for less than two years, we’ll also need your previous address to complete the application. Don’t worry, CreditShift Auto Solutions makes it easy to provide this info and keep the process moving smoothly.
Contact Details
This part is easy! You will just need to provide your basic contact details. We’ll ask for your full name, date of birth, email address, and phone number so we can process your application and keep you updated. At CreditShift Auto Solutions, we keep it simple and hassle-free!
Get Pre-Approved
No matter your credit situation. Good, bad, or just starting out, we work to get you approved with the lowest interest rates possible.
Contact CreditShift
If you have any additional questions about car loans do not hesitate to reach out! Contact Us.
