For the first time ever, the cost of a new car in Canada recently topped the $45,000 mark. The cost of a used car in Canada also topped the $25,000 mark.
As a result, most Canadians need to take out an auto loan when purchasing a vehicle. Auto financing is the only way that many people will be able to get their hands on the new or used cars they want.
If you have bad credit, you might think this would prevent you from investing in a new or used car. But bad credit auto loans continue to make it possible for people to buy new and used cars even if they don’t have the best credit scores.
You should look into the possibility of you taking out a bad credit auto loan if you’re in the market for a vehicle now. You should also figure out how long it’ll take for you to repay a bad credit car loan.
See how long it’s going to take to pay back bad credit auto loans below.
Some People Pay Off Bad Credit Auto Loans in Just 36 Months
In a perfect world, you’re going to want to try to repay bad credit auto loans as quickly as you can. You’ll be able to do this when you decide to take out a bad credit car loan with a 36-month repayment period attached to it.
Generally speaking, 36 months is the lowest repayment period that most bad credit auto loan lenders will extend to people. Those who wish to pay down the balance of their loan fast will often go with this option.
If you’re in a huge hurry to repay a bad credit auto loan, you should think about following their lead and taking out a loan you can pay back in 36 months. You’ll always be able to see the light at the end of the tunnel when you take this particular approach to paying off an auto loan.
Other People Take Up to 84 Months to Pay Off Bad Credit Auto Loans
A decade ago, the thought of taking out 84-month bad credit auto loans would have been laughable. People would have baulked at the idea of doing it and chosen an auto loan with a much shorter repayment period.
But over the last few years, reports have revealed that about half of all Canadian car loans come with 84-month terms. As the prices of new and used cars keep on rising, more and more people are willing to roll the dice on 84-month bad credit auto loans.
If you’re going to be buying a new or even a used car that’s on the pricier side, you might want to explore the option of taking out an 84-month auto loan. It could put you in a much better position to purchase a vehicle that might otherwise be well outside of your price range.
How Long It’ll Take to Repay Bad Credit Auto Loans
One of the great things about taking out an auto loan to purchase a vehicle is that you’ll be able to determine how long it’s going to last. As we just mentioned, you can take out a car loan that will run for as little as 36 months or as long as 84 months.
But you can also choose repayment terms that will land somewhere in between these two extremes. It’s not uncommon at all for people to choose 48-month, 60-month, or 72-month bad credit auto loans in some cases.
You should consider a few key factors before deciding how long you’re going to spend repaying bad credit auto loans. These factors will include:
- How much you can afford to spend on car payments each month
- How long you think a new or used car will last (there is nothing worse than making monthly payments on a car that you aren’t using anymore!)
- The other terms that will come attached to a bad credit auto loan based on the repayment terms you pick
It’s important to keep these kinds of factors in mind when you’re in the market for an auto loan. It’ll help you select the bad credit auto loan that has the right repayment terms on it.
Short-Term Bad Credit Auto Loans Will Cost More Each Month
If you’re going to take out a bad credit auto loan that runs for 36 or even 48 months, you will typically find that your monthly payments will be much higher than they would be if you were to take out a loan that runs for 60, 72, or 84 months. You’ll need to be financially prepared for this if you choose this option.
You’re going to be paying down a bad credit auto loan very quickly if you repay it in just 36 or 48 months. So you will need to throw more money at it each month than you would under other circumstances.
Some people really like the idea of repaying an auto loan in a timely fashion like this. Even though they’ll pay more money for their car each month, they won’t need to worry about making car payments for many years on end. They’ll feel like they’re making progress each and every time they send in a car payment.
Long-Term Bad Credit Auto Loans Will Cost More Over the Long Run
While short-term bad credit auto loans are great for those who want to repay their loans fast, they’re not for everyone. People can’t always afford to shell out a lot of money to make car payments each month.
If you’re on a pretty tight budget as is, you might come to appreciate the financial flexibility that you’ll get when you repay an auto loan over 60, 72, or 84 months. Your monthly payments will be very manageable and won’t get in the way of the other things you wish to do with your life.
But one thing you should remember when you take out long-term bad credit auto loans is that they’ll cost you more over time than short-term ones will. You’re going to be subjected to more interest, which will mean that you’ll need to spend more money over the life of your auto loan.
Certain people are OK with this as long as it keeps their monthly car payments to a minimum. But this is something that you’ll need to take into account before you jump at the chance to take out a long-term car loan.
Your Budget Should Dictate How Long It’ll Take to Repay Bad Credit Auto Loans
Before you take out bad credit auto loans—or any auto loans for that matter!—you should sit down with your monthly budget and analyze it closely. It should shed some light on how much money you can afford to spend each month on a car.
Far too often, people will decide what kind of repayment terms they want to come attached to an auto loan without considering their budgets. It’ll sometimes lead to them either buying a car that will cost them too much money each month or paying for a car over too long a period of time when they could pay it off much sooner.
It’s imperative that you look at your budget and see exactly how much money you’ll be able to throw at car payments each month. This information should have a huge impact on how long you want your repayment period to be.
You Should Aim to Repay Bad Credit Auto Loans ASAP
Your goal when taking out an auto loan should always be to repay it ASAP. You shouldn’t just fall in love with the idea of repaying a car loan over the course of, say, 72 or 84 months and run with it.
That doesn’t mean that you should always take out a 36-month car loan. But it does mean that you should try to pick the repayment terms that are going to keep you within your budget while also allowing you to pay off your car loan fast.
The quicker that you’re able to repay a car loan, the quicker you’ll be able to drive around in a car that doesn’t call for you to make any car payments. You’ll feel so much better about your vehicle when you have the title for it in your hand and don’t owe a penny on it.
Bad Credit Auto Loans Can Be Utilized to Repair Your Credit
When you first take out a bad credit auto loan, your credit score will obviously be on the lower end of the spectrum. It’ll be the whole reason why you’re taking out this type of loan in the first place.
As time goes on, though, your bad credit auto loan is going to give you the chance to bring your credit score up. Every single time you make a car payment on time, it’s going to bode well for your credit score.
You should really take the opportunity that a bad credit car loan will give you seriously. You should strive to make all your car payments when they’re due so that this type of loan helps your credit score as opposed to hurting it.
By the time you’re done paying down your bad credit auto loan—regardless of whether it takes 36 months, 60 months, or 84 months—you’ll be surprised to see where your credit score stands. When you check your credit score, it should be much higher than it was before you bought your car thanks to all the timely payments that you made on it.
Make Sure You Apply For Bad Credit Auto Loans Through Reputable Lenders
If you’re thinking about applying for a bad credit auto loan, you shouldn’t do it through just any lender. Instead, you should set out to find one of the best lenders in the business when it comes to giving out bad credit car loans.
The lender that you choose should have the following qualities:
- A wealth of experience within the auto loan industry
- A variety of bad credit auto loans for people to choose from
- Bad credit auto loans with lots of different repayment term options
- A wonderful reputation for providing those with bad credit with auto loans
- An easy-to-understand car loan application process
When you apply for bad credit auto loans through a lender like this, you’ll know that you’re getting the best deals possible on loans. You’ll also know that you’ll have every available opportunity to repay the loan that you take out.
Buying a new car or a used car is going to be one of the biggest purchases you ever make. So you’ll want to make it with the right lender by your side. Otherwise, you might end up getting a raw deal and not finding the kinds of bad credit auto loans that you’ll be able to pay off sooner than later.
See How Long It’ll Take to Repay a Bad Credit Auto Loan Through Us
The next time you’re in need of an auto loan, we hope you’ll consider applying for one through us. We can set you up with the kinds of bad credit auto loans that you’ll need to purchase a new or used vehicle.
We can also answer any and all questions that you might have about the terms that will come attached to your bad credit auto loan. It’ll ensure that you won’t encounter any problems when it’s time for you to start repaying your loan.
Fill out an application for a bad credit auto loan today to see what you might qualify for.