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Bad Credit Car Loans in Calgary

Bad Credit Car Loans in Calgary

Having access to reliable transportation is essential for most people living in Calgary. Whether for commuting to work, driving kids to school, or running errands, a personal vehicle provides the freedom and flexibility needed for daily life. But what if your credit score isn’t good enough to qualify for a traditional car loan? That’s where bad credit auto loans come in.

With a bad credit auto loan, consumers in Calgary with poor credit scores can still finance the vehicle they need. Specialized lenders work with applicants to understand their unique situations and provide affordable loan options. For many, this represents a lifeline and a chance to get their credit back on track.

In this comprehensive guide, we’ll cover everything you need to know about getting a bad credit auto loan in Calgary. You’ll learn how credit scores work, tips for improving yours, and how to secure auto financing even with less-than-perfect credit. Whether you’re a first-time buyer or rebuilding your credit, you can find an affordable vehicle loan.

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What is a Bad Credit Auto Loan?

A bad credit auto loan is a type of financing used to purchase a new or used car for borrowers with poor credit histories. Borrowers with credit scores below 600 are generally considered subprime and will have difficulty getting approved for a traditional auto loan.

With a bad credit car loan, the lender charges a higher interest rate to compensate for the increased risk of lending to borrowers with low credit scores. The terms of bad credit auto loans also tend to be less favorable, with shorter loan repayment periods and higher down payments required.

These types of loans enable buyers with poor credit to still obtain financing to purchase a reliable vehicle. While the rates and terms are not ideal, a bad credit auto loan may be the only feasible option for consumers to buy a car if they need one.


Why Bad Credit Happens

There are many common reasons why people end up with bad credit scores. Life events and circumstances outside of your control can sometimes cause financial setbacks that hurt your credit.

Job loss or reduction in income often leads to missed or late payments on existing debts, damaging your credit score. Medical bills from an injury, illness or emergency can quickly become overwhelming if you don’t have adequate health insurance coverage. An unexpected car repair bill or large home repair due to an appliance failure or plumbing issue can also strain finances.

Divorce is another major life event that can wreck your credit, especially if you relied primarily on a spouse’s income. Racking up credit card debt to cover legal fees and temporary living expenses is also common during a divorce.

Poor money management skills or overspending can also cause credit problems over time. Taking out too many loans at once or maxing out credit cards can overwhelm your ability to make timely payments.

Younger adults with very little credit history are also prone to lower scores, since lenders prefer to see a long track record of responsible credit usage. Even events out of your control like medical identity theft or credit report errors can bring down your score.

The good news is bad credit doesn’t have to last forever. With some work, you can rebuild and repair your credit over time. A bad credit auto loan can be a good first step, as long as you make payments reliably.


Misconceptions About Bad Credit

Many people assume that having bad credit means they won’t qualify for an auto loan at all. However, this is a common misconception. While lenders view borrowers with poor credit as higher-risk, that doesn’t mean you can’t get approved for a car loan. Auto financing is available even if you have bad credit, as many lenders specialize in subprime borrowers.

Another myth is that the only option for bad credit buyers is to pay outrageous interest rates. It’s true your rate will be higher than borrowers with good credit, but there are still affordable loan options available. Many lenders now offer competitive rates to subprime borrowers. Shopping around and comparing options from various dealerships and lenders can help you secure the best rate based on your credit profile.

Don’t assume your low credit score means you have to buy an old beater car either. While you may not qualify for financing on a brand new luxury vehicle, there are plenty of quality used car options available. The key is finding a lender that works with your budget and reviews your entire financial profile, not just your credit score.

The bottom line is that with the right lender, there are many possibilities to get approved for auto financing even with bad credit. Discussing your options with dealership finance managers can open doors you may have thought were closed.


How Bad Credit Affects Your Car Loan

Having bad credit can significantly impact your ability to get approved for an auto loan and the terms of the loan. Here are some of the key ways bad credit affects car loans:


Higher Interest Rates

The lower your credit score, the higher interest rate you will likely pay on a car loan. Lenders view borrowers with poor credit as higher risk, so they charge more in interest to offset that risk. The difference can be significant – with scores below 620, you may pay interest rates of 10-20% or even higher. Improving your credit score can potentially save you thousands over the loan term.


Lower Loan Amounts

In addition to charging higher rates, lenders also often limit the amount they will loan to bad credit borrowers. So even if you need a $20,000 car, a lender may only approve you for $10,000 based on your credit history. This restricts the types of vehicles and options available to you. Building your credit can help you qualify for higher loan amounts.


Fewer Lenders Willing to Approve

The worse your credit, the fewer lenders are likely willing to take a chance on approving your application. Many mainstream banks and credit unions won’t even consider borrowers with scores below 650 or 600. This limits your options and makes finding a lender more challenging. Improving your credit expands the number of lenders willing to compete for your business.


What Credit Score is Needed for a Car Loan?

When applying for a car loan, one of the most important factors lenders consider is your credit score. Your credit score gives lenders an idea of how likely you are to repay the loan based on your past credit history.

In general, you’ll typically need a credit score of at least 600 to qualify for a traditional auto loan from most lenders. However, the minimum score required does vary by lender. Some may approve loans for borrowers with scores in the 500s, while others may require higher scores of 650 or above.

The better your credit score, the more likely you are to be approved and the lower interest rate you can qualify for. Borrowers with scores of 720 or higher are considered to have good to excellent credit and will qualify for the best rates.

While each lender sets their own credit score requirements, here are some general guidelines:


  • Scores above 660 – Good to excellent credit
  • Scores 620-659 – Fair to good credit
  • Scores 580-619 – Poor credit
  • Scores below 580 – Very poor credit


So while a credit score of at least 600 is recommended for the best approval odds, make sure to check with lenders on their specific minimum score requirements. Improving your credit score can help ensure access to more financing options and better interest rates.


Getting a Car Loan with Bad Credit in Calgary

If you’re looking to get a car loan in Calgary but have less-than-perfect credit, you still have options for financing. While interest rates may be higher for bad credit borrowers, you can still find an auto loan through a dealership, bank, or online lender.

Working first to improve your credit score can help you qualify for lower interest rates. Paying down debts, making payments on time, and avoiding new credit inquiries in the months before applying for an auto loan are some key strategies.

Having a down payment of 10-20% or a creditworthy co-signer on the loan are other ways lenders view your application more favorably. The larger the down payment, the lower risk you are to the lender.

Reputable dealers like House of Cars, Maclin Ford, and Automaxx have experience providing bad credit auto financing to Calgary residents. They work with special finance lenders and some have their own in-house financing.

Be sure to get pre-approved before going to a dealership so you know what rates you qualify for. Compare loan terms and interest rates from multiple lenders as well.


Top Bad Credit Car Dealers in Calgary

When looking for a bad credit car loan in Calgary, working with a dealership that specializes in bad credit financing is key. Here are some of the top options for bad credit car dealers in Calgary:


House of Cars

House of Cars is one of the premier bad credit auto loan providers in Calgary. They work with over 25 lenders to find the best rates and approval odds for those with challenged credit. House of Cars states they can get approval for auto loans even with credit scores as low as 500.


Maclin Ford

Located in Calgary, Maclin Ford promises fast approvals for bad credit auto financing. They work to match customers with the perfect used vehicle for their budget, regardless of their credit challenges.



With two dealership locations in Calgary, Automaxx has partnered with Bad Credit Car Loans to get their customers approved for auto financing even with poor credit histories. Their finance team works to ensure each customer can purchase a quality used car.


Crowfoot Dodge Chrysler

Crowfoot Dodge Chrysler in Calgary employs an experienced finance team focused on helping those with bad credit get approved for a used car loan. They provide tips for securing an auto loan along with getting customers into a vehicle that fits their budget.


Rebuilding Your Credit

If you have bad credit, the good news is that you can rebuild your credit score over time. Here are some tips for improving your credit:


Pay All Bills On Time

Payment history makes up a significant portion of your credit score. Set up reminders to pay all your bills on time, including credit cards, utilities, cell phone bills, etc. Even being a few days late can negatively impact your credit.


Pay Down Debt

High debt loads hurt your credit utilization ratio, which is the amount of credit you are using compared to your limits. Pay down credit card and loan balances to improve this ratio.


Dispute Any Errors

If you see any inaccurate information on your credit report, dispute it immediately in writing. This can help remove harmful errors from your credit history.


Limit New Credit Applications

Each credit application causes a hard inquiry on your report, which can negatively impact your score, especially if you have made several in a short period. Avoid applying for too much new credit at once while rebuilding.


Monitor Your Credit

Keep an eye on your credit by checking your reports regularly. This helps you catch any suspicious activity or errors early so you can address them.

With diligence and smart financial habits, you can gradually improve your credit score over time. It takes patience, but a higher score will open up better financing options in the future.


Alternatives to Dealership Financing

If your credit is poor, getting approved for financing at a dealership can be challenging. However, you may have better luck with some alternative options for financing a used car purchase in Calgary:


Private Sellers

Purchasing from a private seller means you won’t have to deal with the dealership financing process. You can often negotiate more reasonable terms directly with the seller. Just make sure to still get all agreements in writing. Private sellers may be more willing to accept a lower down payment and set up monthly installment payments.


Credit Unions

Credit unions are member-owned financial cooperatives. They often offer more flexibility than traditional banks when it comes to auto loans for those with less-than-perfect credit. Credit unions in Calgary to consider include Connect First Credit Union, Servus Credit Union, and First Calgary Financial.


Online Lenders

Online lenders like RateHub and Canada Drives specialize in helping people with poor credit get approved for auto financing. They have relationships with dealers across Canada and can pre-approve you so you walk into the dealership knowing you are approved. This takes much of the hassle out of negotiating with the dealership’s finance manager.

The key is exploring all your options – don’t assume the dealership is your only path to get approved for a car loan with bad credit in Calgary.


Co-Signing for a Car Loan

If your credit is poor, you may need someone with good credit to co-sign a car loan for you. Here’s how co-signing works:

A co-signer agrees to be equally responsible for repaying the auto loan. This allows you to qualify for a loan that you may not get approved for on your own. The co-signer’s good credit can offset issues with your credit history.

The lender will consider the co-signer’s income, assets, credit score and history when determining loan approval and interest rates. If your credit is very poor, having a co-signer with excellent credit can mean getting approved at a decent interest rate.

However, co-signing a loan is risky for the co-signer. If you miss payments or default, it will negatively impact their credit too. The lender can pursue legal action against the co-signer if the loan goes into default. Before co-signing, the co-signer should consider whether they trust the primary borrower to make timely payments.

That said, co-signing can benefit the primary borrower by allowing access to a loan that would otherwise be unavailable. It’s a short-term fix that allows you to rebuild credit over time. Just be sure to make payments on time and keep the co-signer in the loop on the loan status.


Using Collateral for a Car Loan

If you have an asset like a house or significant savings, you may be able to use that as collateral for a bad credit auto loan. Collateral allows the lender to secure the debt against an asset you own. If you default on the loan, they can seize the collateral to recoup their losses.

For example, some lenders may be willing to accept your home as collateral for a car loan. Typically, they will place a lien against the property. This gives them the right to foreclose and take ownership if you fail to repay the loan as agreed.

Using collateral can make it easier to qualify for a loan with bad credit. The lender views it as less risky since they can take the asset if you don’t pay. Just be aware that you are putting the collateral at risk if you default.

You may also be able to use a large savings account as collateral instead of real estate. The lender can freeze the funds until the loan is fully paid off. This secures the debt without putting your home at risk.

Discuss using collateral as an option with the lender if you have significant assets but are struggling to get approved for a car loan due to credit challenges. It provides them with assurance so they may be willing to work with your situation.


Down Payment Options

When getting a bad credit auto loan, the down payment amount can have a big impact on the interest rate and overall loan terms. Typically, lenders like to see a down payment of 10-20% of the vehicle’s purchase price. The more money you can put down, the better the loan terms will usually be.

By making a larger down payment, you lower the amount being financed and prove to the lender that you’re financially committed to the loan. Borrowers with lower credit scores can offset some of the risk by putting more money down upfront. A 20% or higher down payment on a bad credit auto loan could mean the difference between getting approved or not.

That said, some specialized lenders work with little to no money down for borrowers with challenged credit. These loans typically have higher interest rates and stricter terms. If at all possible, it’s best to put down as much money upfront as you can to get the most favorable loan on a used car with bad credit.

The minimum down payment depends on the lender, your credit score, and the vehicle. With poor credit, expect to put down at least 10%, if not more. Talk to the finance manager at the dealership to discuss down payment options for bad credit auto loans in Calgary.



Bad credit can make getting approved for an auto loan more challenging, but it is still possible to find financing options in Calgary. The key is being proactive by checking your credit report for errors, comparing loan offers, providing a down payment, and having a co-signer if needed. With persistence and the right auto lender, those with poor credit can still obtain the vehicle they need.

In summary, bad credit alone does not have to be a deal-breaker when buying a car in Calgary.While interest rates may be higher, focusing on other positive factors like income, job history, down payment amount, and collateral can help secure an auto loan approval despite low credit scores. Working directly with specialized subprime lenders and dealerships can streamline the process.

Don’t let a bad credit score discourage you. With the right preparation and research, you can get behind the wheel of reliable transportation, and begin rebuilding your credit at the same time.

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Questions about Bad Credit Car Loans in Calgary

To get approved for a car loan in Calgary, you generally need a credit score of at least 620. Lenders consider scores between 620-679 to be non-prime, meaning you can qualify but will pay higher interest rates. Scores of 680+ are considered prime and will qualify you for the best rates. Even with bad credit scores around 500, some specialty lenders may still approve you, but at much higher rates.

Some options for bad credit car loans in Calgary include:


– House of Cars – Specializes in bad credit auto financing with flexible terms

– Maclin Ford – Fast approvals for subprime credit car loans

– Automaxx – Partners with Bad Credit Car Loans to ensure approval

– Crowfoot Dodge Chrysler – In-house financing for bad credit

– Royal Oak Nissan – Specializes in approving bad credit auto loans

– EZ Car Credit – 60-second online credit approvals, even for bad credit


These dealerships work with special finance lenders to get loans for people with credit challenges. While you’ll pay higher interest, they make vehicle ownership possible.

The easiest place to get approved for a bad credit car loan in Calgary is through a buy here pay here (BHPH) dealer. These dealerships finance cars in-house specifically for buyers with poor credit. They require little credit verification and down payments as low as $500-$1,000. Just be prepared for very high interest rates upwards of 29%.

Here are some tips for rebuilding credit when financing a car in Calgary:


– Take out a short 12-24 month loan to start slowly building positive payment history

– Put down at least 10% to show commitment and keep payments affordable

– Pay on time every month without fail to demonstrate responsible behavior

– Refinance at a lower rate once your score has improved after a year

– Keep your credit utilization low by limiting other debt obligations


Sticking to these credit rebuilding fundamentals will help establish positive credit while driving the car you need.

The main types of auto lenders that provide financing for bad credit buyers in Calgary include:


– Subprime lenders – Specialize in higher risk loans at interest rates from 10-29%

– In-house dealer financing – Buy here pay here dealers offering their own financing

– Credit unions – Some offer second chance auto loans to members only

– Online lenders – Provide quick approvals but can have very high rates

Banks with special financing programs – Offer loans to establish or rebuild credit


So while interest rates will be higher, you have several financing options even with poor credit.

The best used cars to buy with bad credit financing in Calgary are:


– Toyota Camry – Reliable, affordable, with cheaper maintenance

– Honda Civic – Holds value well, fuel efficient, with lower repair costs

– Hyundai Elantra – Inexpensive to own and provides a lot for your money

– Ford Focus – Simple mechanicals so cheaper to fix out of warranty

– Kia Forte – Good basic transportation with warranty coverage


Stick to simple vehicles with proven reliability and lower ownership costs when financing with bad credit.


When financing a used car with bad credit in Calgary, most lenders will require 10-30% down payment. Here are some typical down payment tiers:


– 500-1000 – Buy Here, Pay Here In-House Financing

– 10% (minimum) – Specialty Subprime Lender

– 20% – Newer Car Loans Under $15,000

– 30% – Loans for Private Sale Cars


Putting down more money when you have credit challenges shows commitment to the loan and lowers the lender’s risk. This helps secure approval and get better interest rates.

With a credit score around 600 in Calgary, the lowest auto loan interest rates you can typically qualify for are between 10-15%. Here’s how interest rates currently break down by credit score tier:


– Over 720 – Up to 6% interest

– 680 – 719 – 6 to 9% interest

– 620 – 679 – 9 to 12% interest

– 600 – 619 – 12 to 15% interest

– 500 – 599 – 15 to 20% interest

– Under 500 – Over 20% interest


So with a score in the low 600’s, prepare for APRs in the 12-15% range when financing your car.

It’s generally not recommended to take out extremely long auto loan terms if you have bad credit. A longer term like 72-84 months will make the monthly payments more affordable. But you will pay much more interest over the entire loan period. Plus you may end up owing more than the car is worth if you want to trade it in after a few years. Stick to a 36 or 48 month loan term at most when financing with poor credit.

Some of the top buy here pay here car dealerships in Calgary offering on-site financing for bad credit include:


– Automaxx Auto Sales

– BonnyBrook Auto Sales

– Stampede Auto Sales

– GT Motorsports

– Auto House Superstore

– Wolf Auto Sales


These buy here pay here lots all provide flexible financing in-house for applicants with credit challenges. Just be aware that interest rates are typically very high at 25-30% APR.

Yes, getting pre-approved for a car loan even with bad credit has significant advantages, including:


– Knowing your estimated loan amount and rate beforehand

– Having stronger negotiation leverage with the dealer

– Speeding up the approval process when you do find a car

– Avoiding mistakes that further damage your credit


As long as you stick to your pre-approval terms when purchasing, the loan is virtually guaranteed. This provides peace of mind when bad credit car buying.


When applying for bad credit auto loans in Calgary, make sure you have these documents handy:


– Valid government-issued photo ID

– Proof of income – Recent pay stubs or bank statements

– Proof of address – Utility bill, lease agreement, etc.

– References – Names and contact details of people who can vouch for you

– Down payment – Funds verified in your bank account

– Previous auto loan statement (if applicable)


Having these documents ready will speed up the application and approval process.

With a 650 credit score in Calgary, you can expect to get approved for $10,000 – $20,000 on a used auto loan with terms between 36-60 months. The exact amount will vary based on these factors:


– Your income – Lenders allow maximum 50% debt-to-income ratio

– Your existing debt obligations and credit utilization

– Your down payment amount – Minimum 10% recommended

– The vehicle selling price and taxes

– The lender’s risk tolerance


A 650 score shows lenders you are a reasonable risk and expands how much financing is available.

Most lenders in Calgary require you to wait at least 12 months after a consumer proposal before they will approve you for a car loan. This allows some time for accounts to start reporting positively again. After about 18-24 months when more positive history has accumulated, approval chances increase considerably. Get documentation from your trustee showing on-time proposal payments to present to lenders. This can help improve the chances they will finance you.

Some lenders that may approve auto loans in Calgary after bankruptcy include:


AutoCapital Canada

– Car Loans Canada

– Drive Credit Canada

– Freedom Auto Financing

– Fresh Start Finance

– Rayco Auto Loans


These companies specialize in post-bankruptcy auto financing. They understand discharged bankruptcies are not necessarily indicators of future default. Approval timeframes can vary from 6-36 months after your bankruptcy discharge.

The easiest way to get approved for a car loan after a consumer proposal in Calgary is to:


  1. Wait 12 months and make all proposal payments on time
  2. Work on rebuilding your credit score in the meantime
  3. Get pre-approval from a specialty lender like Freedom Auto Financing
  4. Shop for a used vehicle priced within your pre-approval amount
  5. Provide proof of proposal payments and valid ID when applying


Using this structured approach sets you up for a smooth approval process after your consumer proposal.

With bad credit, expect to pay interest rates between 15-30% on a used car loan in Calgary. Here’s a breakdown by credit tier:


– Good Credit (720+) – 3-7% APR

– Fair Credit (680-719) – 7-12% APR

– Average Credit (640-679) 10-15% APR

– Poor Credit (600-639) 15-20% APR

– Bad Credit (500-599) 20-25% APR

– Very Bad (Under 500) Over 25% APR


The higher risk you pose, the more interest lenders will charge to offset chances of default. Improve your score before applying to access better rates.

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