family-man

I recently shopped around with a few different financial institutions (BMO, RBC, TD) to try and get a line of credit. unsecured they wanted anywhere from 5% to 14%. Craziness. secured by my house as collateral was 4%. still abit much. I'm noticing in the states that people are getting like 1.5%-2% through credit unions. there are also some online loan websites in the states that offer really low rates. seems a big one is "penfed".

what is the best way to get an auto loan in Canada with a really cheap rate and is safe. seems like the bigger financial institutions are a rip off. also I would want to buy privately and go to the states to purchase (can you do that if you get a loan/line of credit?) whats the advatages/disadvatages to credit unions vs big name financial institutions

Black 03 Z06

Harold the Jewellery Buyer. He is your man.

camirocz

Borrow from a relative .

Airwilf

You won't see the low American rates here in Canada.I've used both the banks & my Credit Union.You'll find that due to the competitive nature of the financial world,their rates will be close to each other.I've gone to one lender & politely stated that their competition (i.e. Bank vs CU), has a lower rate & they will usually match each other's rates for your busines.Five percent these days is pretty good.A quick website search of the institions will show the going rate.Just my experience in the past.

LedfootLarry

LOL : Cashman

Mad*Max

you will not see the US rates as there is much more liquidity there right now, if I were you I would get an unsecured line of credit from a bank so that you can pay it down as you have free cash flow to reduce your interest costs

walleyejack

move to the states

hzz

save up

ZOHSIC

If you are getting a traditional auto loan, all the banks are pretty much the same. It's 4.95 on a used car and anything more than 5 years old you'll be tapped out at a three year term unless you start going to high risk, not worth it. You'll need a larger down payment if you need a certain monthly payment for your budget.

If you get a home equity line, then you can do as you wish, cut a cheque for whatever car you're getting and pay back the home line. There is no restriction on what/where you buy with a line of credit.

The larger financial institutions are not a rip off, the 20% tier 2 lenders are a rip off, you could be making 2 years of payments and still owe what you bought the car for.....

If you can't afford the car, a bank will tell you. The others will just jack your rates and you'll be paying forever, they will put you in the car no matter what.

A home equity line gives the most flexibility, but you need to be careful not to get over your head in debt.

Buy what you can afford, which includes insurance, annual maintenance and repairs.

Good luck!

ZOHSIC

one last thing, if you use a line of credit and pay the car cash with that, you can remove the road coverage insurance over the winter since the debt won't be tied to the car.

In a traditional car loan, you'll have to have full coverage insurance year round.

slickpete83

what do u think is the best % rate can u get if your house is paid off and u have a perfect credit score ???

slickpete83

^ nevermind i just went to ratehub.ca and found the answer is 3.50%
(Prime + 0.50 ) , i thought it would be lower , at the rate it doesn't make sense to ask family to use a HELOC loan

family-man

Well my buddy at work just bought a '11 Nissan Altima for $16,000. He went to his bank (RBC) and got a rate of 3.00% from his line of credit.

family-man

Thank you for the response! Few questions though...
1)I'm guessing a HELOC is kinda like savings? The money gained on the value of the house and what's been paid off so far, sound about right?
2)what is a Tier 2 lender and I'm guessing the other 80% is the banks?
3)I'm guessing the HELOC is the best solution? With the least drawbacks

Mad*Max

this can't be an unsecured line, must be secured against his home?

family-man

Secured. Is it recommended to get secured for the lower rate? Or just go for unsecured?

ZOHSIC

It really depends on your entire financial position, including how much business you have with the bank.

ZOHSIC

1) Yes, it's the equity you have in your home they are loaning against.
2) Tier 2 is a credit union or other banking institution that is not one of the big six. It goes downhill from there to household finance companies which are only one step above a loan shark.
3) HELOC offers the most flexibility, but if you lack financial discipline, then a traditional car loan might be better.

ZOHSIC

Unsecured will always have a higher rate, it's unsecured.....

Secured to your home, the rate should be equal to your mortgage rate or 10-25 bps higher.

You can get prime minus if you are a strong customer.

Mad*Max

unsecured is the way to go