When it comes to financing for vehicles, recreational vehicles, and power sports toys there are two main different types of loans that you’ll come across. If your credit isn’t at its strongest and you’re finding it difficult to get approved, it’s likely because you’re applying for a prime loan. In this case, it may be a better idea to apply for a subprime loan. But what’s the difference? Breeze Financial Solutions is here to break down the facts for you!
Prime lending in Canada is the main type of most loans. This is the general term that refers to conventional loans obtained through banks and credit institutions when a borrower is able to meet a certain set of predetermined conditions. These can include, but are not limited to:
A credit score of over 650
No repossessions against your name, meaning you haven’t defaulted on a loan before
You earn a minimum of $1800 per month before taxes and other deductions
These conditions are used by lenders to decide how likely and able you are to pay off a loan, including interest. If you match or exceed this criteria, then it’s likely you’ll qualify for a prime loan. The main advantage of this kind of loan is that you’ll likely receive a lower interest rate making these types of loans less expensive in the long run.
If your credit isn’t strong enough to meet prime lending criteria, then there are certainly steps you can take to help improve your credit score, but it will likely take some time and hard work.
However, there is an alternative . . .
Not everyone can qualify for a prime loan. Maybe you’ve suffered financial hardship due to moving, bankruptcy, divorce, poor judgement, or maybe you simply haven’t had time to build a solid credit history yet. There are lots of reasons people are denied a prime loan, but that’s why subprime lending exists.
Subprime lending caters to the market share of people that are looking to borrow money against a purchase, but have poor or non-existent credit. Breeze Financial Solutions helps those who are struggling with credit issues by providing subprime loans for power sports and recreational vehicles.
While the interest rate will be a little higher in comparison to a prime loan, subprime loan rates are that way to help reduce the risk to the lender. Of course the main advantage to the borrower is that they’re most likely to qualify for a subprime loan.
At Breeze, we believe that just because you’ve suffered a few credit problems, it doesn’t mean you don’t deserve to have fun! We want to get you out riding on those trails, driving those roads, or sailing on the water as quickly and efficiently as possible.
Contact Breeze Financial Solutions today and learn about our financing options.