The Secret to Getting a Car Loan When You Have Bad Credit

When looking to buy a car, it’s important to remember that getting approved for a loan is just as important as finding the right vehicle. If you don’t have good credit and want to get approved for financing, it can be difficult–but not impossible!

There are many reasons why people might not have great credit: they may have been through some rough patches in life or had some unexpected expenses that affected their ability to pay off debts on time.

Whatever the reason, we’re here with tips on getting approved for financing when your credit score isn’t perfect.

Step 1: Understand Your Credit Score

Before you begin getting a car loan with bad credit, it’s important to understand your credit score and how it affects your ability to get approved for a loan.

A credit score is an assessment of your financial history that lenders use to determine whether you’re likely to repay any money they lend you. It’s calculated based on information in your credit report, which contains details about loans you’ve taken out and payments made on those loans. The higher your score, the better–and vice versa for low scores.

Step 2: Gather Your Documentation

The next step is to gather the documentation you’ll need to apply for a car loan. This includes proof of income, such as pay stubs and W-2 forms, which can be requested from your employer. You’ll also need to provide proof of address in the form of a utility bill or bank statement from within the last three months.

Other documents may include:

  • A completed credit application form
  • Credit score report (if applying online)

Step 3: Shop Around

The next step is to shop around. You may be surprised at how much money you can save by comparing car loans from different lenders.

You can compare rates online with a simple search or ask your bank or credit union if they offer better rates than the ones advertised on their websites.

Step 4: Make a Plan

Once you’ve identified the vehicle you want to buy, it’s time to start thinking about how much money you’ll need for a down payment and monthly payments.

Next comes creating a budget and payment plan to account for all your financial obligations each month. It may be tempting to buy as many things as possible with whatever money is left over after paying bills and other expenses–but don’t do it!

Step 5: Apply for the Loan

The next step is to apply for a loan. This can be done online or in person at a dealership. Once you’ve applied, it will take one to three days for your application to be approved or denied by the lender. 

Step 6: Negotiate the Terms

Getting approved for a loan can be difficult when you have bad credit. But that doesn’t mean you can’t negotiate the terms of your loan. A car dealer will be more willing to work with you if they know they can sell their car and make a profit, so find out what they’re ready to offer—and ask for more. 

Step 7: Finalise the Loan

The final step in the process is to sign all of the loan documents. This includes a copy of your credit report and a copy of your contract with the dealer. Once you’ve signed these documents, take possession of your new car!

As long as you’ve been honest about any debts or liabilities that might affect your ability to get approved for financing, there’s no reason why you shouldn’t be able to get approved for a car loan with bad credit in Canada today.


If you want a car loan with bad credit in Canada, being honest about your financial situation is important. The more information you can provide about your income and assets, the better your chance of being approved for financing. By providing the dealer with all the information they need upfront, you can negotiate a reasonable deal and ensure you get approved for financing.

Ready to get approved for a car with bad credit? Let’s get started today! 365 Loans Canada is a top-rated finance company that provides car loans for people with bad credit. We’re committed to helping you get driving today, regardless of your financial situation.

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