Getting a car loan makes buying a car much more accessible. Whether you’re looking to upgrade, or you just want to treat yourself, a car loan can mean the difference between having to save up the money and being able to get the car there and then.
A car loan is a lump sum used to purchase a car and is paid back over a set amount of months with added interest. There are many places to get a car loan in Canada, including banks and online lenders. But, what if you want to take out two car loans? Is it possible and will it affect your credit score?
In this article, we will look at whether you can have two car loans in Canada if it is a good idea to do so, and how multiple car loan applications may affect your credit score. Take a look now to find out the facts.
Can I Have Two Car Loans at Once?
Yes, you can have two car loans at once. In fact, it is relatively common for families to have two-car loans if they own two cars. However, if you’re looking to add another car loan, you will need to consider that lenders are less likely to give out second loans. This is because it is an added strain on personal finances and is much riskier for them.
Is it a Good Idea to Have Two Car Loans at Once?
Sometimes, it is necessary for families to have two cars. There may be a hectic personal schedule that needs to be adhered to along with school pickup times, hobbies, and other journeys that require two cars to make the whole thing work.
However, getting a second car loan means you will have another monthly bill to budget for. If you’re looking to get a second car loan, you need to be entirely sure that you can afford to make the repayments on both of them at once.
Having another car loan is useful if it is necessary for your family to have two cars. If not, we would recommend avoiding it and saving on the monthly expense.
Can I Have Two Car Loans For One Car?
While it is entirely possible to do so, it is not recommended. Having two car loans to pay for the same car just increases the amount of debt you’re in. Instead of using multiple loans to cover the cost of your car, consider holding off on the purchase until you have a bigger downpayment to reduce the amount you need to borrow or look out for a more affordable car.
Can Applying For Mulitple Car Loans Affect My Credit?
When you are shopping around for a car loan, it can be tempting to apply for every good loan you see, but it is important to exercise restraint. For all hard inquiries you make about car loans, you will get a mark on your credit report. A hard inquiry means any time you submit personal and financial details as part of the application. By giving this information over, a car loan lender can look at your credit report, listing the inquiry in the process.
Fortunately, you can instead look at preapprovals and car loan quotes which only require what is known as a soft credit pull and will not affect your credit score. If you have applied for a car loan and have been rejected, this could affect your credit score, and as such, we would recommend waiting for a few weeks before applying for the next one so that your credit has time to bounce back.
If you’re looking to get two car loans for two different cars, it might be useful to give some time between the two so that a lower credit score doesn’t affect the second loan. Usually, waiting between 14 to 45 days is enough for your credit score to return to what it was.
Getting a Car Loan with Bad Credit History
While it may seem so, having bad credit no longer actually affects your ability to get a loan if you know where to look. Many banks and traditional lenders still require a good credit score, but shopping around for online lenders and bad credit car loan lenders can help you to get a car loan, even if your credit has taken a dip recently.
Be aware that having bad credit may increase the amount you must pay back monthly and could also affect the length of the loan.
Looking For a Car Loan in Markham? Get in Touch With Car Loan Masters Today!
Are you looking for a car loan in Markham but worried about bad credit? Car Loan Masters has got you covered. We can have you approved for a loan in as few as 20 minutes so that you can get your hands on the car upgrade you’ve been waiting for. Get in touch today to find out more about our car loans.