Can I Get a Car Loan With a Temporary Job In Canada?

Todays’ ready question is relevant to thousands of people in the Canadian workforce, those who work seasonally or are on a contract. Whether you’re a veteran seasonal worker or just trying to earn enough to get by, you have to approach credit differently. We asked our auto loans team to describe the difficulties faced when it comes to financing a car loan with a temporary job.

Financing a Car Loan With a Temporary Job

Despite what it may seem, it isn’t that difficult to get a car loan with a temporary job. Lenders don’t actually care how you earn your money as long as it’s legal. They mainly care about the regularity and reliability of that money.

Their intent is to assess whether you can afford the auto loan over the entire term. They want to know that your income is stable enough over the long term.

To qualify, you’ll need to:

• Have Good Credit: All credit applications will refer to your credit score. The better your score, the higher the chance of being accepted for the loan and getting a decent rate.

• Have Spotless Payment History: Your payment history feeds into your credit score but it’s also used independently to understand how you handle debt. If you never miss a payment, you’ll be fine. If you have missed payments in the past, you’ll need to explain why.

• Have Minimal Debt: Your ability to pay is the primary concern of any lender and already having outstanding debt feeds into that. If the debt is minor and manageable, it shouldn’t make a difference. If the debt is more significant, it might.

Debt-to-income ratio. Source: https://www.mortgagecalculator.org/calcs/debt-ratio.php

Pay off whatever you can before you apply for the loan to maximize your chances.

• Have a Down Payment: The larger your down payment, the more favourably a lender will view your application. We usually recommend between 10-20% as a down payment but in situations like seasonal workers, more is always better.

The more you put down, the less you have to borrow and the more insurance a lender has if you default. Both help in loan applications.

• Have a Permanent Home: Whether you own or rent, living at an address for a long period of time shows stability, which is another positive sign a lender looks for.

Homeowners obviously have an easier time qualifying for an auto loan but renters with a stable home can also qualify.

Whatever your job and whatever season you work, if you work with experts, there should be no reason why you cannot access car loans with a temporary job

If you're ready for a car loan in Southern Ontario, we'd love to help with that! simply fill in the form below to get started.