For many Canadians who face financial hardship, a consumer proposal offers one of the best ways to start over again.
Unlike bankruptcy, a consumer proposal typically results in people having a little more money in their pocket. That’s important for those who are planning to make a purchase, such as new car.
Many might assume they cannot get a car loan while rebuilding their credit. However, it’s certainly possible if people take the right approach.
What Is A Consumer Proposal?
A consumer proposal is a great option for those in financial difficulties. It’s an agreement worked out between a consumer and their creditors. Usually, the deal is brokered by a consumer proposal administrator.
To qualify, people must have debt that amounts to at least $5,000 but less than $250,000. They must have steady income. They also must be unable to repay their creditors in full, plus the interest owed.
Consumer proposals are designed to work with unsecured debt. That includes credit cards, unpaid bills and payday loans. Most consumer proposals allow consumers to pay off debt in five years or less.
Buying A Car While In a Consumer Proposal
One of the many advantages to a consumer proposal is that surplus income is not calculated into the payments. That means if a person’s income goes up, their payments do not. That leaves the extra money in the pocket of the consumer.
One area where that cash could go toward is a new car. Having reliable transportation is seen as a crucial need for those in a consumer proposal. It allows them to keep working and earn a paycheck. That’s why many lenders will consider extending a loan to those in a consumer proposal.
There are several key issues to keep in mind.
Shop For A Lender
It’s important to get information and compare loan terms for several different lenders. A site such as Apply & Buy makes that easier, giving consumers a chance to get into contact with many different lenders to compare rates.
Find The Right Lender
Many lenders are more willing to work with those who have had financial difficulties. That attitude extends to those in consumer proposals. Apply & Buy specializes in bringing many such lenders onto one site. Don’t let your consumer proposal or past financial difficulties prevent you from searching for the right car for you.
Prepare For Extra Steps
In some cases, a lender may contact your consumer proposal administrator. While they cannot prevent you from taking a loan, they may be asked to verify that the loan is within your ability to pay monthly.
Consumer proposals are no reason to stop moving forward with your life. By ensuring that you are getting the best rate and that a car note fits into your monthly budget, it’s possible to buy the car you want even if you have a consumer proposal.