Bad credit car loans in Canada

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Yes, you can get a car loan with bad credit in Canada. Lenders that work with low scores look more at your income, job stability and the vehicle than at your past, but you should expect a higher interest rate than someone with good credit.

What counts as bad credit?

Canadian credit scores run from 300 to 900. Most lenders treat scores below about 600 as subprime, and scores below 560 as rebuilding. A low score usually comes from late or missed payments, accounts sent to collections, maxed-out credit cards, or very little credit history.

A low score does not mean an automatic no. It mainly changes which lenders will look at your application and what rate they offer.

How bad credit car loan approval works

Banks tend to approve based mostly on credit score. Subprime auto lenders (sometimes called second chance auto lenders), which ShopRides works with, look at the whole picture:

Income: enough steady income to cover the payment. Many lenders want to see about $2,500 a month or more before tax.
Job stability: how long you have been at your job, or how steady your other income is.
Debt load: your existing monthly payments compared with your income.
The vehicle: its age, kilometres and price compared with what it is worth.
Down payment or trade-in: anything that lowers the amount borrowed lowers the lender's risk.

Bad credit? See what you qualify for

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What to expect on rate and payment

Rates for bad credit car loans are higher because the lender takes on more risk. As a rough guide, borrowers rebuilding their credit often see rates in the high teens or twenties, while borrowers with good credit see single digits. Use the car loan calculator to see how the rate changes your payment before you apply.

Choosing a reliable, sensibly priced used vehicle keeps the payment manageable. A smaller loan paid on time is also the fastest way to rebuild your score.

Ways to lower your payment with bad credit

Put money down, even $500 to $1,000. Every dollar down is a dollar you do not pay interest on.
Use a trade-in if you have one, and know what you still owe on it.
Add a co-signer with good credit to qualify for a better rate.
Pick a vehicle that fits the budget rather than stretching the term to 96 months.
Pay on time for 12 to 24 months, then find out how you can lower your payment as your score improves.

How ShopRides helps

ShopRides is a financing referral service. You fill out one short application, and our team matches it with lenders that work with your credit situation. There is no SIN needed to start and no hard credit check to see your options.

Documents to have ready

Valid Canadian driver's licence
Recent pay stubs or bank statements showing your income
Proof of address, such as a utility bill
Details of any trade-in (year, make, model, amount owed)

You don't need these to start. Your finance specialist will tell you what your lender needs.

Know your payment first

Pick your credit level, term and province to see an estimated payment, or work backwards from a monthly budget to see what price fits.

Open the calculator

Frequently asked questions

What credit score do I need for a car loan in Canada?+

There is no single minimum. Many subprime lenders consider scores in the 500s and even lower when income is steady. A higher score mainly gets you a lower rate.

Will applying hurt my credit score?+

Starting an application with ShopRides does not involve a hard credit check. A hard inquiry may happen later, when you choose to move forward with a specific lender, and you will know before it happens.

Do I need a down payment with bad credit?+

Not always. Some approvals need no down payment, but putting money down often improves your chances and lowers your rate and payment.

Can a bad credit car loan help rebuild my credit?+

Yes. Car loans are reported to the credit bureaus, so making every payment on time builds positive history over time.

What is a subprime auto loan?+

A subprime auto loan is a car loan for borrowers with lower credit scores, usually below about 660. Rates are higher than bank rates, but approval is based more on your income and the vehicle than on your past.

Is in-house financing a good idea with bad credit?+

In-house financing means the dealer lends you the money directly. It can work, but rates are often high and some don't report payments to the credit bureaus. A subprime lender that reports your payments helps you rebuild credit.

Is buy here pay here my only option?+

No. Many people with bad credit qualify through subprime lenders, which are usually a better choice than buy here pay here lots because they report your payments to the credit bureaus.