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In YT, what should I know about self-employed borrowers for car loans?
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In YT, what should I know about self-employed borrowers for car loans?

For self-employed individuals in Yukon seeking a car loan, lenders require comprehensive documentation to verify income stability and repayment capacity, typically looking for a minimum of two to three years of consistent income history. You will need to provide your last two to three years of T1 General tax returns and corresponding Canada Revenue Agency (CRA) Notices of Assessment (NOAs) to demonstrate declared taxable income. If incorporated, T2 corporate tax returns and detailed financial statements will also be necessary, alongside personal and business bank statements for the past 6-12 months to illustrate cash flow. Due to the inherent variability of self-employment income and the common practice of writing off business expenses-which reduces taxable income but not necessarily cash flow-lenders perceive a higher risk compared to salaried employees. This often translates into higher interest rates, larger down payment requirements, or potentially shorter loan terms, particularly in the evolving 2025 Canadian market where lenders are exercising increased caution. Understanding these stringent requirements allows you to meticulously prepare your financial records, potentially improving your approval chances and securing more favourable loan terms.

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