Top 10 Car Loan Lenders in Canada
1. Royal Bank of Canada (RBC)
Interest Rate: 7.49 %–9.99 % APR
Loan Term: 12–96 months (up to 8 years)
Credit Score Needed: Good to Excellent (typically 700+)
2. Scotiabank
Interest Rate: 7.99 %–11.73 %
Loan Term: Up to 96 months
Credit Score Needed: Good to Excellent
3. Bank of Montreal (BMO)
Interest Rate: 8.99 %–10.99 % APR
Loan Term: Up to 8 years
Credit Score Needed: Good (around 650+)
4. CIBC
Interest Rate: 7.99 %–13.49 % (depending on credit)
Loan Term: 12–96 months
Credit Score Needed: Fair to Good (600–700+)
5. Desjardins
Interest Rate: 8.99 %–10.49 % APR
Loan Term: Up to 8 years
Credit Score Needed: Good (~650+)
6. National Bank of Canada
Interest Rate: 7.59 %–9.99 % APR
Loan Term: Up to 96 months
Credit Score Needed: Good to Excellent
7. Canada Auto Finance
Interest Rate: 4.90 %–29.95 % APR
Loan Term: 3–96 months
Credit Score Needed: All credit types accepted
8. Kawartha Credit Union
Interest Rate: Around 7.99 % for newer vehicles
Loan Term: Up to 60 months
Credit Score Needed: Good (~650+), flexible for members
9. Vancity Credit Union
Interest Rate: From 7.95 % APR
Loan Term: Up to 10 years
Credit Score Needed: Good (~650+)
10. NLCU (Newfoundland & Labrador Credit Union)
Interest Rate: 5.50 %–7.80 % APR
Loan Term: New: 3–8 years; Used: 3–5 years
Credit Score Needed: Good, flexible for members
What to Look For Before Choosing a Car Loan
✅ Interest Rate & APR
Compare interest rates from banks, credit unions, and online lenders. New car loan rates usually range between 0% to 7%, while used car loans tend to be higher, around 8%–12%. If your credit score is low, subprime loans could go up to 30%.
✅ Loan Term Length
Shorter loan terms (36–60 months) have lower interest costs over time but higher monthly payments. Longer terms (72–96 months) reduce monthly payments but may cost you more in total interest.
✅ Credit Score Requirements
Lenders categorize borrowers like this:
Excellent (700+) – Best rates
Good (650–699) – Moderate rates
Fair (600–649) – Higher rates
Poor (<600) – Subprime or guaranteed approval loans with high interest
✅ Fees & Extra Charges
Always check for hidden fees like loan setup fees, early payment penalties, or administration charges. These can make a loan more expensive than it first seems.
✅ Pre-Approval Options
Getting pre-approved can save time and give you leverage at the dealership. You’ll know what rate and loan amount you're eligible for before car shopping.
✅ Flexibility & Early Repayment
Some lenders allow early repayment without penalties. This is useful if you plan to pay off your loan early and save on interest.
✅ Dealer vs. Bank vs. Credit Union
Dealerships may offer promotional rates (even 0% on new cars), but these usually require strong credit.
Banks provide reliable service, especially if you already have accounts with them.
Credit Unions are member-based and often offer more flexible terms and competitive rates for used cars.
Final Thoughts on Car Loans in Canada
When choosing a car loan in Canada, it’s important to consider your credit score, loan term, interest rate, and lender reputation. Banks like RBC, CIBC, and Scotiabank are great for people with strong credit. If your credit is average or poor, lenders like Canada Auto Finance or local credit unions may be more flexible and willing to work with you.
Remember: it’s not just about the lowest monthly payment. Always look at the total cost of the loan and make sure it fits your budget and financial goals.