There credit rating is a crucial indicator for assessing a borrower's creditworthiness. It reflects credit history and the ability to manage and repay debts. A high credit score generally means lower risk for the lender, which translates into more favorable loan terms, including lower interest rates. Here's a detailed look at why credit scores are important, strategies for improving them, and real-world examples of how they impact the auto financing at Desjardins.

Importance of credit score

Your credit score directly influences several aspects of your auto loan, including:

• The interest rate : A high credit score allows you to obtain interest rate lower.
• Loan conditions : Borrowers with a good credit score may benefit from more favorable loan terms.
• Loan approval : A high credit score increases the chances of loan approval.

Strategies to Improve Your Credit Score

1. Pay your bills on time : THE late payments seriously harm your credit rating.
2. Reduce your credit utilization rate : Try to keep your credit card balance below 30 % of your total limit.
3. Check your credit report : Review your credit report regularly to correct any errors that could affect your score.

Example of credit score impact on interest rate

Let's take two borrowers, Mark and Julie, to illustrate the impact of credit score on interest rate.

• Mark has a credit score of 750. Thanks to this high score, he gets a car loan with an interest rate of 5 %.
• Julie has a credit score of 620. Because of her lower score, she is offered a rate of 6 %.

Comparison :

Marc borrows 25,000 $ over 5 years at an interest rate of 5 %. His monthly payments are 449 $ and the total cost of the loan is 26,940 $.

Julie borrows the same amount over the same term at a rate of 6 %. Her monthly payments are 483 $ and the total cost of the loan is 28,980 $.

Marc saves about $2,040 in interest compared to Julie thanks to his better credit score.

Chart: Impact of credit rating on interest rate. Note that interest rates are for illustrative purposes only and cannot be interpreted as actual interest rates.

Credit score	Interest rate
750+	6%
700-749	7%
650-699	8%
600-649	9%
550-599	10-20%
<550	10-40% and more

Importance of monitoring and improving your credit score

Monitoring and improving your credit score is essential to getting the best possible terms. car loan possible. Here are some additional tips to help you achieve this:

1. Maintain a positive credit history : Use your credit cards responsibly and avoid accumulating too much debt.
2. Diversify your credit types : Have a combination of credits, such as mortgages, car loans and credit cards, can improve your rating.
3. Avoid applying for too much credit at once : Each credit application can temporarily affect your credit score. Avoid making multiple applications in a short period of time.

Income and job stability are essential criteria that Desjardins evaluates when examining a car loan application. These factors help determine a borrower's ability to repay the loan. The higher and more stable the income, the greater the chances of loan approval. Here's a detailed look at the importance of income and job stability, complete with real-world examples and illustrative charts.

Importance of income

A borrower's income is crucial in assessing repayment capacity. A stable and sufficient income assures the lender that the borrower will be able to meet the monthly car loan payments.

Example :

Alex earns 60,000 $ per year and has worked for the same company for 10 years. His stable and sufficient income allows Desjardins to offer him advantageous loan conditions.

On the other hand, Sam earns 30,000 $ per year and changes jobs often. This instability makes Desjardins more cautious, which can result in less favorable loan terms or a higher interest rate.

Chart: Influence of income and job stability on loan approval

Annual income	Job stability	Chances of approval
60 000 $	Stable employment (>5 years)	Raised
40 000 $	Stable employment (2-5 years)	Averages
30 000 $	Unstable employment (<2 years)	Weak

Strategies to improve your chances

To maximize your chances of getting a car loan at Desjardins, it is important to present a solid financial profile. Here are some strategies to improve your chances:

1. Increase your income : If possible, look for opportunities to increase your income, whether through a promotion, part-time job, or additional investments.
2. Stabilize your job : A stable employment history is a sign of trustworthiness to lenders. Try to maintain your current job or avoid changing jobs frequently before applying for a loan.
3. Provide evidence of financial stability : Documents such as bank statements, employer letters or employment contracts can help demonstrate your financial stability and ability to repay.

Examples of income and job stability

Example 1: High income and stable employment

Marie earns 75,000 $ per year and has worked in the same company for 8 years. Her high income and job stability increase her chances of getting a car loan with favorable terms and a low interest rate.

Example 2: Average income and stable employment

Paul earns 50,000 $ per year and has been working for the same company for 4 years. Although his income is average, the stability of his job allows Desjardins to offer him a loan with reasonable conditions.

Example 3: Low income and unstable employment

Sophie earns 25,000 $ per year and changes jobs often. Her low income and job instability make Desjardins more cautious, which may result in a higher interest rate or less favorable loan terms.

The length of your car loan, or loan term, is a crucial factor that Desjardins considers when approving your financing application. The length of your loan not only influences your monthly payments, but also the total cost of the loan and the repayment terms. Here’s a detailed analysis of the importance of the loan term, with concrete examples and graphs to help you better understand its impact.

Importance of loan duration

The loan term determines the number of months you will make payments. A shorter loan term means higher monthly payments, but lowers the total interest cost. In contrast, a longer loan term means lower monthly payments, but increases the total interest cost paid over the life of the loan.

Advantages and disadvantages of different loan terms

Short loan term (24-36 months)

• Benefits :
  • Less interest paid over the term of the loan
  • Faster Refund Speed
• Disadvantages :
  • Higher monthly payments

Average loan term (48-60 months)

• Benefits :
  • Balance between monthly payments and total interest cost
  • Reasonable refund conditions
• Disadvantages :
  • Higher total interest cost than short term

Long loan term (72-84 months)

• Benefits :
  • Lower monthly payments
  • Immediate financial accessibility
• Disadvantages :
  • More interest paid over the term of the loan
  • Risk of negative residual value of the vehicle

Examples of the impact of loan duration

Example 1: Short loan term (36 months)

Lucas chooses a car loan of 20,000 $ over 3 years with an interest rate of 3 %.

• Loan amount : 20 000 $
• Interest rate : 3 %
• Loan term : 36 months
• Monthly payments : 581 $
• Total cost of loan : 20 916 $

Example 2: Average loan term (60 months)

Sophie chooses a car loan of 20,000 $ over 5 years with an interest rate of 4 %.

• Loan amount : 20 000 $
• Interest rate : 4 %
• Loan term : 60 months
• Monthly payments : 368 $
• Total cost of loan : 22 080 $

Example 3: Long loan term (72 months)

Paul chooses a car loan of 20,000 $ over 6 years with an interest rate of 5 %.

• Loan amount : 20 000 $
• Interest rate : 5 %
• Loan term : 72 months
• Monthly payments : 322 $
• Total cost of loan : 23 184 $

Chart: Impact of loan term on monthly payments and total loan cost

Loan term	Monthly payments	Total cost of loan
36 months	581 $	20 916 $
60 months	368 $	22 080 $
72 months	322 $	23 184 $

Strategies for Choosing the Right Loan Term

1. Evaluate your monthly budget : Make sure that monthly payments fit within your financial capacity without jeopardizing other aspects of your budget.
2. Consider the total cost of interest : A shorter term can save you money in the long run, even if the monthly payments are higher.
3. Think about the residual value of the vehicle : For longer terms, consider vehicle depreciation and the possibility that you may still owe payments on a vehicle that has lost some of its value.
4. Using Loan Calculator Tools : Online tools, such as those offered by Desjardins, can help you simulate different loan terms and see the impact on your monthly payments and the total cost of the loan.

Job stability is a key factor that Desjardins considers when reviewing your car loan application. A stable, long-term job is seen as a sign of financial security, which can increase your chances of getting a loan with favorable terms. Here’s an in-depth look at the importance of job stability, along with concrete examples and charts to help you better understand its impact.

Importance of job stability

Job stability is an indicator of your ability to maintain a steady stream of income. Lenders, such as Desjardins, assess this factor to determine your reliability as a borrower. Stable employment reduces the risk of default, which allows lenders to offer you lower interest rates and more favorable loan terms.

Components of job stability

1. Length of current employment : How long have you worked for your current employer?
2. Employment History : The continuity of your employment over the years and the frequency of your job changes.
3. Job Type : Fixed-term contract (CDD) versus permanent contract (CDI) and whether you are full-time or part-time.
4. Industry : The stability of the industry you work in can also influence your assessment by the lender.

Examples of the impact of job stability

Example 1: Stable employment (10 years in the same company)

Alex has been working for the same company for 10 years and earns 60,000 $ per year. His stable job allows him to get a car loan with an interest rate of 3 %.

• Loan amount : 20 000 $
• Interest rate : 3 %
• Loan term : 5 years
• Monthly payments : 359 $
• Total cost of loan : 21 540 $

Example 2: Moderately stable job (4 years in the same company)

Lucie has been working for the same company for 4 years and earns 50,000 $ per year. Her average job stability allows her to obtain a car loan with a interest rate of 4 %.

• Loan amount : 20 000 $
• Interest rate : 4 %
• Loan term : 5 years
• Monthly payments : 368 $
• Total cost of loan : 22 080 $

Example 3: Unstable employment (less than 2 years in each job)

Paul changes jobs frequently, working less than 2 years in each position, and earns 40,000 $ per year. His unstable job earns him an interest rate of 6 %.

• Loan amount : 20 000 $
• Interest rate : 6 %
• Loan term : 5 years
• Monthly payments : 387 $
• Total cost of loan : 23 220 $

Chart: Influence of employment stability on interest rate

Job stability	Interest rate offered
Very stable (10+ years)	5%
Moderately stable (4-5 years)	6%
Unstable (less than 2 years)	7%

Strategies to Improve Your Job Stability

1. Maintain a stable job : Try to stay in the same job or company as long as possible before applying for a loan.
2. Demonstrate industry stability : If you work in a stable industry, be sure to mention this in your application.
3. Provide evidence of stability : Submit documents such as employment contracts, pay stubs, and letters of recommendation to strengthen your case.
4. Highlight promotions and raises : If you have received promotions or pay raises, highlight this information to show your progress and value within the company.

Getting a car loan from Desjardins can be a simple and advantageous process, provided you understand and prepare for the approval criteria. By following the strategies and tips discussed throughout this guide, you can maximize your chances of obtaining car financing with favorable terms. Let's summarize the key points to remember to optimize your chances of success.

Understanding Desjardins Approval Criteria

It’s crucial to understand the key criteria Desjardins considers when reviewing your loan application. This includes your credit score, income and job stability, the amount of down payment you can provide, the term of the loan you choose, and your job stability. Proper preparation in these areas can make a significant difference in obtaining your car loan.

Credit score

Your credit score is a determining factor. A high score shows that you are a reliable borrower, which can help you qualify for lower interest rates and more favorable loan terms. To improve your credit score, make sure you pay your bills on time, reduce your credit utilization ratio, and regularly check your credit report to correct any errors.

Income and job stability

A stable and sufficient income and a stable job are indicators of your ability to repay the loan. Desjardins values borrowers who have a reliable source of income and job stability. To maximize your chances, maintain your current job for as long as possible before applying for a loan and be sure to demonstrate any progression or stability in your career.

Deposit amount

A high down payment reduces the amount of the loan needed and shows your financial commitment, which can improve your chances of getting a loan with favorable terms. By saving regularly, using bonuses or incentives, and selling assets you no longer need, you can increase the amount of your down payment.

Duration of car financing

The term of your loan affects your monthly payments and the total cost of the loan. A shorter term can lower your total interest cost, while a longer term can make your monthly payments more affordable. Use loan calculator tools to simulate different terms and choose the one that best fits your financial situation.

Job stability

Your job stability shows lenders that you have a reliable source of income. A long, stable employment history can help you get lower interest rates and more favorable loan terms. Show evidence of financial stability and highlight promotions and pay raises to strengthen your case.

Additional strategies

1. Using online tools : Take advantage of simulators and tools from Desjardins auto loan calculation to estimate your monthly payments and understand your options.
2. Prepare a complete file : Provide all necessary documents, including bank statements, proof of income, and employment information, to show that you are a serious and prepared borrower.

Contact Prêt Auto Québec

To benefit from all these advantages and obtain the best car financing conditions available on the market, contact the team at Quebec Auto Loan. Our experts are ready to help you every step of the way, providing you with the best possible service for your Desjardins auto loan. Whether you are looking to purchase a new or used car, we are here to guide you and ensure a smooth and successful financing experience.

By following these tips and preparing yourself adequately, you can maximize your chances of obtaining a car loan from Desjardins with advantageous conditions, allowing you to carry out your automobile project with complete peace of mind.