Financing a vehicle with a low credit history can be a challenge, especially for drivers working to get out of debt. Undergoing a consumer proposal is a common method of consolidating debt and placing it under one payment, but similar to filing for bankruptcy, it comes with certain restrictions on how you can manage your funds. If you need to purchase a car, you may wonder: “Can I take out a car loan under a consumer proposal?”
Below, we’ll discuss how car purchases and loans work during a consumer proposal and why Auto Loan Hub is your best choice for bad credit auto financing in Canada. Keep reading!
What Is a Consumer Proposal?
A consumer proposal is a federal process designed to pull insolvent Canadians out of debt and return their credit to good standing. During a consumer proposal, debt is either reduced to a more manageable sum, an extension of time to repay the debt is granted, or a combination of both.
A Consumer proposal is generally favoured over filing for bankruptcy, as it requires the person in debt to cover a lump sum over a series of payments and attend counselling to improve their financial literacy and habits. However, similar to filing for bankruptcy, your credit score will usually drop quite low. In this instance, applying for other financing like a mortgage or car loan becomes more difficult.
Can You Buy a Car While Under a Consumer Proposal?
However, it’s not impossible to get approved for a car loan when you’re under a consumer proposal- in fact, many drivers have managed to secure a car loan with a low credit score. With the right lender, it can be a very smooth process. You can obtain a bad credit auto loan through the following methods:
Find a co-signer: If you find a co-signer with a good credit history, you can increase the likelihood of qualifying for a car loan. With a responsible co-signer, the lender will know that someone can cover the balance should you fail to make a payment. This will make your loan more appealing for lenders to approve and can also lower the interest rate that you will pay.
Apply through a private lender: One of the best ways to secure a car loan with bad credit is through a private lender. While banks don’t always look kindly on applicants with a recent debt history, private lenders are usually more accessible. Our team at Autoloan Hub has access to a vast network of lenders, and we can help you secure bad credit auto financing on terms that suit your budget and lifestyle.
Choose Auto Loan Hub for Bad Credit Auto Financing
At Auto Loan Hub, we understand that many Canadians fall on hard times. If you’re looking at your bad credit history and thinking you won’t be able to get a vehicle, don’t worry—there are still plenty of options available!
Whether you’re undergoing a consumer proposal or have simply accrued a bad credit score over time, our team at Auto Loan Hub is here to help secure the financing you need to get back on the road.
Visit our How it Works page to learn more about how to obtain auto financing, even if you have a low credit score!
