Since 1997, Ottawa residents have trusted AutoNet Financial. As a leading provider of easy car loans in Ottawa, AutoNet Financial can help you get a competitive finance rate from a local new or used car dealer, regardless of your past credit.
Car Loans in Ottawa Ontario
Most consumers are acquainted with the traditional forms of financing for cars in Ottawa. These traditional sources include car loans from banks, credit unions, and finance companies, such as Ford - Motor Credit, Chrysler and GM - GMAC, and Honda - Honda Finance.
All of these car loan financing sources have a number of things in common:
- Many of their car loans are for a fixed period of time
- Most auto financing is simple-interest loans
- A lien is placed on the vehicle listing the auto finance company as the first secured party.
There are, however, other ways you can obtain easy car loans Ottawa:
Home equity loan
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The first alternative type of financing for cars in Ottawa is to finance a vehicle with a home equity loan. With the current drop in home values across Canada, these types of auto loans are not as common as they used to be. But depending on the equity situation you have in your home and the area in which you live, this type of loan could once again be available to you.
This is because, in the simplest terms, a home equity loan is a second mortgage. While banks in the past were willing to lend up to 80 percent of your home's value, that figure is now on the high side, given the current real estate market. But if you do qualify for one of these car loans, it is possible that this type of auto financing could garner you an interest rate that is lower than most auto loan financing loans.
On the upside, the big benefit of bad credit auto loans based on a home equity loan is that the interest that you pay could be tax deductible, provided you itemize your deductions on your income tax return. On the downside, unlike conventional car financing, your home is the collateral for the auto loan. If you can't make the loan payments, your car won't be repossessed, but your home could be foreclosed on.
Home equity line of credit
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The second type of alternative used car financing for bad credit scores is using a home equity line of credit. You apply for this type of auto loan by requesting a line of credit from a bank that, again, is based on the equity you have in your home. Once approved, you write a check that is written against this line of credit. As with the home equity loan, interest is tax-deductible. It also allows for payment flexibility. Interest rates, unfortunately, tend to be variable, so what started out as a good deal could end up costing you more money that you originally anticipated. These loans are also structured for longer periods of time, so that you could end up paying quite a bit more in interest expenses than traditional used car financing. Finally, just as in the home equity loan, any default could lead to the loss of your home.
