Online Car Loans Canada


Consumers can spend days shopping around for just the right vehicle to buy but don’t always spend the same energy looking at car loan options. Searching for the right car loan is just as important as getting your dream vehicle and doing your research may end up saving you money over the term of the loan. Be realistic when looking for a car or truck loan, you’ll want to balance the total cost with what you can afford as a monthly payment. A car loan is secured against the vehicle, serving as collateral for the loan, so much like other secured loans, the lender keeps ownership of the asset until the final payment is made.

If you have bad credit, your car loan may not have as low an interest rate as others. As well it is important to note that loans for people with less than stellar credit is usually over a shorter term. Still, you should shop around through banks, credit unions or even try and get a pre-approval though an online lender.

There are a few key concepts that are important to understand if you’re considering a car loan. By having this knowledge before going to buy a car will give you the leverage to negotiate the best deal.

What to know before you apply for a car loan

repayment term

Repayment term: There is a little flexibility when choosing your repayment term. If you want more monthly cash flow, choose a longer loan term, just be aware you’ll pay more interest over the life of your loan.

easy to pay interestEasy to Pay Interest: There are two types of interest rates, fixed and variable interest rate. You are also free to choose the interest rate based on your particular needs. The lower the interest rate on the loan, the less you’ll pay for the car in the long run.

down paymentDown Payment: Money put down on the vehicle, either with cash or trade in, will help reduce your total owing, therefore reducing the time spent paying off your new vehicle.

easy paymentEasy Payment: Lenders often let you choose the payment frequency of your car loan, for example, weekly, bi-weekly, semi-monthly or monthly payments. Choose a payment frequency that matches your pay schedule and set up automatic deductions for stress free payment.


Buying a car can be a stressful (but also exciting!) experience. Most people are going to need financial help when purchasing a car, and that’s where car loans come in. There’s a lot to know about the ins and outs of car loans, so it’s worth doing your research. We’re here to help you get informed with some of the most commonly asked questions about car loans in Canada.

What are car loans?

A car loan is basically a personal loan that is secured by the vehicle you are purchasing. That means if you default on your loan payments, the lender has the right to seize your vehicle as collateral.

How do new car loans work?

 You get a car loan through a bank, an alternative lender, or a dealership. Generally, lenders will allow you to borrow from 80% to 100% of the value of the car. Repaying a car loan involves making regular payments (monthly, weekly, etc.) plus interest over a certain time period. Car loan terms typically vary between 2 to 8 years.

How do used car loans work?

A used car loan works exactly like a new car loan with some extra limitations, namely:

  • The percentage of the car’s value you can borrow is typically less than a new car loan.
  • Interest rates for used car loans are usually higher than a loan for a new car.

What is auto refinancing?

Auto refinancing means replacing your current car loan with a new loan that has different rates and terms. You can renegotiate the terms with your current lender or you can choose to switch to a new lender. This is normally done to extend the loan’s term or to get a lower interest rate. Generally, an auto refinancing term is between 2 and 7 years.

What is rent-to-own?

Rent-to-own is an option that involves “leasing” a used car for a period of time, after which you can choose to return or buy the car. This option is good if you have bad credit or are unable to get approved for a lease through traditional means. That’s because there’s no credit check – you will just need a personal ID, proof of residence, and an income source.

In the case of rent-to-own agreements, payments are made directly to the dealership or car rental company rather than a bank or third-party lender. Terms typically last 1 to 2 years.

What is in-house financing?

In-house financing is similar to a car loan, but it’s offered only by dealerships. You simply choose a car you like and the dealer will then finance the car for you, after which you will repay them in equal installments with interest over a certain period. Terms usually last up to 5 years.

Do I need a down payment to get an auto loan?

Generally, yes, you’ll need to provide at least a 10% down payment. Note that there are lenders who may accept a smaller down payment. Despite this, you should always make as big of a down payment as you can afford, so as to reduce your monthly payments and improve your chances of getting a better interest rate.

How do I get pre-approved for an auto loan?

To get pre-approved for a car loan in Canada, you simply provide the lender with information about yourself, such as your name, salary, debt amount, and social insurance number. They will perform a “hard” credit check which will affect your credit.  To minimize the impact on your credit score, be sure to get a pre-approval from all lenders within 14 days, as multiple credit checks within a two-week period are considered one credit inquiry.

Can I get an auto loan with bad credit?

Yes, there are many lenders who offer bad credit car loans. Since car loans are secured by the vehicle you’re buying, they are some of the easiest loans a person with bad credit can get.

Are 72+ month auto loans bad?

Some car loans have terms longer than 72 months. You should be wary of these for the following reasons:

  • You’ll end up spending way more on interest.
  • Interest rates are typically higher with loan terms over 60 months.
  • You’ll get less equity. You build equity when your car is worth more than your loan. Longer terms stretch this process out.
  • You can end up paying more than the actual value of the car in the end

How can I get 0% financing on a car loan?

 Sometimes you’ll see signs for 0% financing at a dealership. This is typically offered when car dealerships need to meet sales quotas or get rid of old or used cars. To qualify for 0% financing, you’ll typically need to have an excellent credit score. If you do manage to qualify, make sure to find out if the 0% rate is applicable to the entire duration of the term.

Ready to apply for a Car Loan? Click here and apply.

Still have questions about car loans in Canada? Contact a Lend for All representative for more information.

Car Loans By Location

Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland & Labrodor, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan, Yukon

Lend For All     1 King St W Suite 4800 -24 Toronto, ON M5H 1A1   |  +1 800-532-4505

Disclaimer: Lendforall Canada/ is not a lender, does not make offers for loans, and does not broker online loans to lenders. Submission of a loan request to this website does not guarantee an offer or an approval for a loan. Lendforall Canada is not responsible for third party products, services, sites, recommendations, endorsements, reviews, etc. All products, logos, and company names are trademarks™ or registered® trademarks of their respective holders. Their use does not signify or suggest the endorsement, affiliation, or sponsorship, of or by Lendforall Canada or them of us. This content is provided by Lendforall Canada and is free of charge with no obligation to continue with the third party. is an independent, advertising-supported service. The owner of this website may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. Lendforall Canada strives to provide a wide array of offers for our users, but our offers do not represent all financial services companies or products. We endeavor to ensure that the information on this site is current and accurate but you should confirm any information with the product or service provider and read the information they can provide.