Toronto car loan options

Believe it or not, one of the best reasons to take a car loan is to improve your credit standing. If you already have a poor credit rating, and can get a car loan in Toronto, you can use this as an opportunity to better your credit standing, but the burden is on you to ensure that you make timely monthly installments. You also have to be aware that poor credit standing means that the rate of interest you will be charged is higher than normal, because you have been classified as a higher risk in terms of loan repayments.

That being the case, one of the ways to manage this cleverly is to find out the duration that you are locked in for that particular loan. For example, if you are taking a 5-year car loan, then the lock in period may be for 1 year. This basically means that you cannot exit the loan earlier than1 year without having to pay a penalty. At the end of that year, having received better credit ratings because of on-time payments, you can then refinance the car for the outstanding sum with another financier for a lower interest rate. If planned and implemented properly, this can save you a substantial amount of money in the long term.

Jun 17th, 2011