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Getting a car loan without a cosigner in Canada

One of the most requested type of auto loans we receive are auto loans with no cosigner. If you have struggled with credit in the past or are new to credit it may seem like it’s impossible to get auto financing without having a cosigner. There definitely are ways to get approved without a cosigner even with bad or no credit – here are ways you can give yourself the absolutely best chance possible.

Employment: Most auto loan programs where you won’t need a cosigner (especially those for Canadians without great credit) require a proof of income. It makes sense that a lender would want to be able to see that money is coming in each month – as it makes a stronger case for your ability to handle the car loan payments each month. Typically the minimum requirements are that you make $10.50 an hour working full-time or equivalent. This works out to roughly $1800 a month (before all of the taxes and deductions are taken off. After deductions this amount can often be closer to $1500 or $1600). As a salary the minimum is roughly $21,600 annually. Although you can get approved with less income, meeting these income requirements give you the best chance of being approved on your own.

Down Payment: A down payment very often will not be necessary and there are many programs where you can approved with $0 down without a cosigner. That being said, having saved a small down payment is never a bad idea. Even $500 or $1000 dollars saved for a down payment can help you obtain a no cosigner auto loan. We understand that it’s not always possible to save for a down payment so there are quite often options with as little as zero down.

Why would I want to use a cosigner if I can get approved without a cosigner?

If there are options without a cosigner there still may be compelling reasons to have a cosigner on your auto loan application. The main reason is it may open up different / better options for your auto finance. If your cosigner has a higher credit score or a higher income you may be able to qualify for different programs by having them on the application. One thing that is really nice is if you make your payments your credit score is naturally going to rise with time. Showing positive repayment history is one of the most important factors in determining your credit score. In as little as 10 months you could be eligible to upgrade your vehicle and qualify for a lower interest rate than you started – this is often the time if you were first approved with a cosigner to now have an application on your own.


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