Used Car Financing in Newfoundland & Labrador with a 600-700 Credit Score
Navigating the world of used car loans in Newfoundland and Labrador can be challenging, especially with a credit score in the 600-700 range. This score places you in a 'fair' or 'near-prime' category, meaning you have good options, but the details matter. This calculator is specifically designed to give you a realistic estimate for an 84-month loan term, factoring in the province's 15% Harmonized Sales Tax (HST).
How This Calculator Works for Your Scenario
This tool is calibrated for your specific situation. Here's what it considers:
- Vehicle Price: The sticker price of the used car you're considering.
- NL HST (15%): Unlike other provinces, Newfoundland and Labrador has a 15% HST. We automatically add this to the vehicle price to calculate the total amount you need to finance. For example, a $20,000 vehicle will cost $23,000 after tax.
- Interest Rate (APR): For a 600-700 credit score on a used vehicle, rates typically range from 9% to 18%. We use a representative rate in our examples, but you can adjust this based on any pre-approval you may have.
- Down Payment: Any cash you put down upfront. This reduces the total loan amount and can help secure a better interest rate.
- Loan Term: Your selected term is 84 months (7 years). This term results in lower monthly payments but means you'll pay more interest over the life of the loan.
Approval Odds with a 600-700 Credit Score
Your approval odds are generally good in this credit range, but lenders will look beyond just the score. They want to see a stable financial picture. Key factors include:
- Stable Income: Lenders need to see consistent, provable income that can comfortably cover the new car payment plus your existing debts. If your income source is non-traditional, it's still possible to get approved. For more on this, see how Bank Statements: The Only Resume Your Car Loan Needs. Drive, Alberta!
- Debt-to-Income (DTI) Ratio: This is the percentage of your gross monthly income that goes towards debt payments. Lenders typically want to see this below 40-45%, including the new car loan.
- Down Payment: A down payment of 10% or more significantly increases your chances of approval and can help you get a more favourable interest rate.
- Credit History Nuances: A 650 score with a history of steady improvement is viewed more favourably than a 650 score that's declining due to recent missed payments. If you've dealt with past credit issues, know that options are available. Many are told financing is impossible after a consumer proposal, but that's often not the case; learn about The Consumer Proposal Car Loan You Were Told Was Impossible.
Example Scenarios: 84-Month Used Car Loan in NL
Here are some realistic payment estimates for an 84-month term, assuming a 12.99% APR, which is common for the 600-700 credit range on a used vehicle. Note how the 15% HST impacts the total amount financed.
| Vehicle Price | HST (15%) | Total Financed (No Down Payment) | Estimated Monthly Payment |
|---|---|---|---|
| $15,000 | $2,250 | $17,250 | ~$320 |
| $20,000 | $3,000 | $23,000 | ~$427 |
| $25,000 | $3,750 | $28,750 | ~$534 |
| $30,000 | $4,500 | $34,500 | ~$641 |
*Payments are estimates. Your actual rate and payment may vary.
The 84-Month Term: Pros and Cons for a Used Car
Choosing an 84-month term is a significant decision. While it makes a vehicle more affordable on a monthly basis, it's crucial to understand the trade-offs, especially with a used car.
Pros: The primary benefit is a lower, more manageable monthly payment, which can help you fit a more reliable vehicle into your budget.
Cons: You'll pay substantially more in interest over seven years. Furthermore, used cars depreciate quickly. An 84-month loan increases the risk of being 'upside-down' (owing more than the car is worth) for a longer period, which can be problematic if you need to sell or trade the vehicle. Rebuilding credit after a major event like a bankruptcy takes time, but you don't have to wait as long as you think to get back on the road. Find out more in our guide: Discharged? Your Car Loan Starts Sooner Than You're Told.
Frequently Asked Questions
What interest rate can I expect for a used car loan in NL with a 650 credit score?
With a credit score of around 650 in Newfoundland and Labrador, you can typically expect an interest rate (APR) between 9% and 18% for a used car loan. The final rate depends on the lender, the age and mileage of the vehicle, your income stability, and the size of your down payment.
How does the 15% HST in Newfoundland and Labrador affect my total loan amount?
The 15% HST is calculated on the selling price of the vehicle and added to the total amount you finance. For example, a used car listed for $20,000 will have $3,000 in HST added, making the total pre-financing cost $23,000. This entire amount is then used to calculate your loan payments, directly increasing your monthly cost.
Is an 84-month loan a good idea for a used car?
It can be, but with caution. An 84-month (7-year) term lowers your monthly payments, making a car more affordable. However, you'll pay more interest over the loan's life. The biggest risk is negative equity, where you owe more than the car is worth, as used cars depreciate faster. It's often recommended for newer, more reliable used vehicles if budget constraints are a primary concern.
Can I get approved for a car loan with a 600-700 credit score if I have a low income?
Yes, it's possible. Lenders focus on your Debt-to-Income (DTI) ratio. As long as your provable income can comfortably support the new car payment alongside your existing debts (like rent and other loans), you have a good chance of approval. Lenders want to see that the total debt payments don't exceed about 40-45% of your gross income.
Do I need a down payment for a used car loan in this credit range?
While not always mandatory, a down payment is highly recommended for a 600-700 credit score. Providing 10-20% of the vehicle's price as a down payment reduces the lender's risk, which can lead to a higher chance of approval, a lower interest rate, and a smaller monthly payment. It also helps combat the effects of depreciation.
