Car Loan Approvals for the Self-Employed Just Got Easier

November 14, 2019

Car Loan Approvals for the Self-Employed Just Got Easier

Self-Employed Car Loan Approvals

It was bound to happen sooner or later. Self-Employed car loan approvals have become easier to be get! With self-employed and contract workers on the rise in the “gig economy,” it was inevitable that lenders would start to target this demographic.

If bank lenders weren’t willing to change their policies, private lenders decided that the hardworking self-employed of this country should be able to qualify for car and truck loans. In 2018, Statistics Canada reported that there were 2.86 million self-employed taxpayers. It is predicted that within the next decade, 50% of the Canadian workforce will be self-employed or contract workers.

Bank Car Loans for the Self-Employed

Many contract workers become disillusioned with the bank loan process. Banks abhor risk and want proof of a stable income in the form of T4 slips before even considering an application. If they do approve loans for the self-employed, its based on several years of tax returns and audited financial statements. If contract workers in the gig economy have enough income to pay for audited financial statements, it’s highly unlikely they need much in the way of car loan financing.

Private Self-Employed Car Loans

The private lending industry is an option for the self-employed. It’s easier to qualify than a bank loan. But they often want collateral in case of default. Some will use the car that is being purchased as collateral for the loan. But first they need to pre-approve the applicant, the applicant searches for a vehicle in the loan’s price range, and then must provide paperwork proving the value of the vehicle. If for some reason they don’t approve, then the process begins again.

Used Car Loans for the Self-Employed

An ideal solution is a used car dealership with flexible financing options for contract workers and the self-employed. Here’s how it works for Ontario self-employed workers:

  • Visit the dealership’s website and fill out a pre-approval car loan application.
  • Once pre-approved, browse the car and truck inventory and choose several options within the loan amount.
  • Take the income verification documents and tax returns (usually two years) as requested to the dealer.
  • Test drive vehicles while waiting for the paperwork to be processed.
  • Receive approval based on a nearly 100% approval rate.
  • Choose the vehicle desired within the loan amount.

It’s that easy.

3 Steps to Improve the Odds for Loan Approval

  1. Clear up any old debts that drag down credit scores. Keep receipts to prove payment, if asked.
  2. Come up with a down payment which significantly reduces lender risk.
  3. Bring proof that self-employment is the same occupation as previous paid jobs. For example, having been a paid carpenter (T4 slips) for 10 years with 3 years self-employed.

Used Car dealerships have one goal. To put people behind the wheel of a car or truck of their choice. They partner with dozens of lenders to find the right vehicle loan and repayment program for everyone’s financial situation.

Yourcarloan.ca specializes in car, truck, SUV, and minivan loans for self-employed and contract workers. 100s of vehicles are in stock at an Ontario location near you.

Leave a Reply

Your email address will not be published. Required fields are marked *

Ready to Get Driving Today

APPLY NOW

Fast, Easy & Secure

Not Sure if You Qualify?

Find Out Instantly
Still Have Some Questions?

call us at 1 877 211 6894

or visit our contact page to send us a message