New Car Loan Payments in Ontario: 36-Month Term for 600-700 Credit Scores
You're in a specific situation: you're in Ontario, have a credit score between 600 and 700, and you're targeting a new vehicle with a shorter 36-month loan term. This is a smart approach to build equity quickly and pay less interest over time. This calculator is designed precisely for your scenario, factoring in Ontario's 13% HST and the interest rates typical for your credit profile.
How This Calculator Works for Your Ontario Profile
Our tool isn't generic. It's calibrated for the details you've selected. Here's the data-driven breakdown of your calculation:
- Vehicle Price: The Manufacturer's Suggested Retail Price (MSRP) of the new car you're considering.
- Ontario's Harmonized Sales Tax (HST): We automatically add 13% to the vehicle price. For example, a $35,000 car has a total cost of $39,550 ($35,000 x 1.13) before any other fees or down payments.
- Down Payment / Trade-In: Any amount you put down is subtracted from the total taxed price. This directly reduces your loan amount and monthly payment. Even if you think you have nothing to put down, options exist. For more on this, explore our guide: Your Down Payment Just Called In Sick. Get Your Car.
- Estimated Interest Rate (APR): This is the most crucial variable. For a 600-700 credit score in Ontario on a new vehicle, rates typically range from 7.99% to 14.99%. Lenders see this as a 'fair' or 'near-prime' range. Your exact rate depends on your income stability, employment history, and overall debt load, not just the score. A stable income can often secure a rate at the lower end of this spectrum.
- Loan Term (36 Months): This shorter term means higher monthly payments compared to a 60 or 72-month loan, but you'll own the car free and clear much faster and save a significant amount in total interest paid.
Approval Odds with a 600-700 Credit Score
Your approval odds are quite good. Lenders in Ontario who specialize in this credit tier are less concerned with a few past mistakes and more focused on your current ability to pay. They will primarily assess:
- Income Stability: Verifiable income is key. Whether you're salaried or self-employed, showing consistent earnings is your strongest asset. If you're self-employed, don't worry about traditional pay stubs. As we explain here, Self-Employed? Your Bank Statement is Our 'Income Proof'.
- Debt-to-Income (DTI) Ratio: Lenders want to see that your total monthly debt payments (including this new car loan) don't exceed 40-45% of your gross monthly income. A lower DTI significantly increases your chances of approval and a better rate.
- Loan-to-Value (LTV) Ratio: A down payment lowers the LTV, reducing the lender's risk and showing you have 'skin in the game'. This is highly favourable for your credit profile.
Example Scenarios: New Car, 36-Month Term in Ontario
The table below illustrates potential monthly payments. We've used a conservative estimated APR of 9.99% for this credit bracket. (Note: These are estimates for illustrative purposes only. OAC.)
| Vehicle Price | HST (13%) | Total Cost | Down Payment | Loan Amount | Estimated Monthly Payment (36 mo @ 9.99% APR) |
|---|---|---|---|---|---|
| $25,000 | $3,250 | $28,250 | $2,500 | $25,750 | ~$829/mo |
| $35,000 | $4,550 | $39,550 | $4,000 | $35,550 | ~$1,144/mo |
| $45,000 | $5,850 | $50,850 | $5,000 | $45,850 | ~$1,475/mo |
Remember, your credit score is a starting point, not the final word on your interest rate. Lenders look at the complete picture. To understand more about how rates are determined, see our article: Your Credit Score is NOT Your Rate. Get a Fair Loan, Toronto.
Frequently Asked Questions
What is a realistic interest rate (APR) in Ontario for a new car with a 650 credit score?
For a new car loan with a 650 credit score in Ontario, a realistic APR would typically fall between 7.99% and 14.99%. The final rate depends heavily on other factors like your income stability, the size of your down payment, and your overall debt-to-income ratio. A strong application can secure a rate at the lower end of this range.
How does the 36-month term affect my car loan approval and payments?
A 36-month term results in higher monthly payments compared to longer terms. However, it's often viewed favourably by lenders because you build equity faster and the overall risk is lower. For you, it means paying less total interest and owning your car sooner. The main challenge is ensuring the higher payment fits comfortably within your budget and debt-to-income ratio.
Is a down payment mandatory for a 600-700 credit score in Ontario?
While not always mandatory, a down payment is highly recommended for this credit score range. It significantly improves your approval chances by reducing the lender's risk (Loan-to-Value ratio). A down payment of 10% or more can often unlock better interest rates and more favourable terms from lenders.
How is the 13% HST calculated on my new car purchase and loan?
In Ontario, the 13% HST is calculated on the final selling price of the vehicle. This tax is then added to the price to get the total amount. If you have a trade-in, the value of the trade-in is deducted from the vehicle price *before* the HST is calculated, which can save you a significant amount in taxes. The final loan amount is based on this total cost, minus your cash down payment.
Can I get approved for a new car loan if I'm in a consumer proposal in Ontario?
Yes, getting a car loan while in a consumer proposal or after it's discharged is possible in Ontario. Lenders will want to see a history of consistent proposal payments and stable income. Approval often depends on finding the right lender who specializes in these situations. For a deeper dive, check out our guide on how a What If Your Consumer Proposal *Unlocks* Your Car Loan, Ontario?
