The Best Car Loan Interest Rates in Canada for 2024

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A car loan can be a convenient alternative if you want to buy a car but don’t have the cash to hand.

Car loans make it easy to access the funds you need to buy your car so you can start using it and pay off the money over the coming months and years.

But how should you choose a car loan in Canada? There are many to choose from, all with different terms and interest rates.

Read on to learn about Canada’s 12 best car loan interest rates from lenders, including Loanz, Clutch, Loans Canada, and more.

Best Car Loans in Canada

Here are 12 of Canada’s best car loan lenders with details about their loan amounts, interest rates and eligibility requirements.

1. Loans Canada

image showing loans canada website homepage

Loans Canada is a large Canadian broker that matches you with lenders in your area. It’s a reputable broker where you can apply for several types of loans, including car loans, personal loans and business loans.

You can borrow up to $50,000, and interest rates range from 5.4% to 46.96%.

Eligibility depends on the lender, but loans are available for people with bad credit.

You can also learn more about Loans Canada here.

2. CarsFast

You can use CarsFast to access a network of dealers across the country. You can trade in your car and get access to financing, which can be a good option if you have a bad credit rating.

The maximum loan you can get here is $75,000, with interest rates from 4.90% to 29.90%.

As for eligibility, you must be in regular employment for three months or more and have a minimum income of $2,000 per month.

3. LoanConnect

Head to Loan Connect for a car loan, and you’ll be connected with top lenders across Canada.

You will only find personal loans here, but you can use these loans for anything, including a car. You can also get bad credit loans and cash loans.

You can borrow up to $50,000 here, and interest rates range from 6.99% to 46.96%. You must be a Canadian citizen or resident to apply, and loan terms are from three to 120 months.

4. Loanz

Loanz can help you get a loan even with a poor credit rating. You can deliver your funds in minutes and do not need to provide collateral.

You can apply for personal loans here that you could use to put towards a car. Loans are available from $1,000 to $15,000, and the interest rates are from 29.90% to 46.90%. Loan terms are from 12 to 60 months.

To be eligible to apply, you’ll need a steady source of income, you must not be in bankruptcy or collections, you must be the age of majority in your province, and you need a chequing account.

5. Clutch

Head to Clutch to buy used cars, trade in your old car, and get financing. It partners with large lenders, and you can get pre-approved for loans.

The maximum loan amount is $100,000, and interest rates range from 8.99% to 24.99%. This is estimated, however, and it depends on the lenders.

Eligibility depends on the lender, but low credit scores under 600 are considered. Terms are from 24 to 96 months.

6. Coast Capital Savings

You can find several types of loans at Coast Capital Savings, including car loans and auto refinancing.

The interest rates vary depending on your credit history and score. To be eligible, you must be a resident of Canada and the age of majority in your province. Loan terms are up to 84 months.

7. Smarter Loans

Smarter Loans is a broker that links you up with top auto loan providers. You can pre-apply for a car loan, and it then connects you with a suitable lender.

The maximum loan amount is $99,999, and the lenders have interest rates of up to 29.99%.

Eligibility depends on the lender, and you can get loans with terms of up to 96 months.

Related: Best Personal Loans in Canada.

8. Splash

Splash Auto Finance from Rifco National Auto Finance can be a good option if you have bad credit and want to get a car loan. It has a large network of over 500 dealerships and interest rates from 9.90% to 31.00%.

The maximum loan amount is $50,000, and you must have a regular income to be eligible. Splash is not available in Quebec.

9. Canada Auto Finance

At Canada Auto Finance, you can apply for loans for new and used cars and get same-day approvals.

It has a quick online application for car loans, and trade-ins are available. The maximum you can borrow is $45,000 at interest rates from 4.90% to 29.95%.

You can apply even if you have a poor credit rating, but minimum income requirements exist.

10. Canada Drives

Visit Canada Drives to buy cars and get loans up to $75,000. The process is completed online, and interest rates can be as high as 29.99%.

You must be in steady employment and earn $1,800 per month income to be eligible for a loan, and you must also be the age of majority in your province. Loan terms are from 12 to 96 months.

11. Car Door

Car Door is a broker that connects you with lenders across Ontario, but it is not a great option if you are based in another province.

Most loans have interest rates of 6.99%, but they could vary depending on the lender. The maximum you can borrow also varies.

You must be a Canadian resident and have a steady income to be eligible.

12. Duca

Duca offers various types of loans, including car loans, personal loans and lines of credit.

There is no stated maximum amount you can borrow. Interest rates are from 4.80% to 4.90% for a new car loan and 4.30% to 4.40% for a Hybrid Car Loan. Loan terms are up to five years.

What is a Car Loan and How Does It Work?

Car loans are very common in Canada. These are loans you take out with the specific goal of purchasing a car.

You can use a car loan to buy both new and used cars. You borrow a set amount of money, called the principal, and the amount depends on your car’s cost and whether you are buying a new or used car.

The interest rate is expressed as a percentage that the lender charges, and it affects how much you have to pay back. A higher interest rate means a more expensive loan.

The rate is impacted by many factors, including the amount of risk you present, which is primarily determined by your credit score and history.

You then choose a term for the loan, which is when you must pay it back. It is usually expressed in months. You can opt for a longer term to make smaller monthly payments, but you will pay more over the term.

Bad credit car loans are also available for people with poor credit ratings but tend to have higher interest rates.

How to Apply for a Car Loan

You can apply for a car loan at any of the above lenders, and the application process will differ depending on the lender.

Check the eligibility criteria first. If you have a poor credit rating, your options will be more limited, but there are still car loans for bad credit.

You may need to be in regular employment and meet minimum income requirements. In addition, you will normally need to be the age of majority in your province or territory and a Canadian resident.

Once you have found a suitable lender, gather any documents you need. These might include proof of employment and could involve presenting pay stubs and bank statements.

You may want to use the online loan calculator to better understand how much your car loan will cost you.

When you are ready to apply for a loan, follow the application process. You can usually do this online, but not always. You will need to provide your personal information and answer the questions.

Some lenders will allow you to get pre-approved without a hard credit check. This is a quicker process, and you can use your pre-approval to shop for a car, knowing how much you can borrow.

If the lender approves your application, you can then choose your vehicle. Many lenders will connect you to a dealership, and you can check whether the vehicle you want is available.

When you are ready, sign the contract, and you will receive the funds.

This is the process for most online lenders, like many lenders in this guide. However, there are other ways to get a car loan.

One is to get a loan directly from the car dealership. They may be more lenient if you have a poor credit rating because they want to make a sale. Discuss your options in the dealership and talk with the dealer in person.

If you have a good credit score, you might want to get a car loan from your bank or credit union instead.

Related: Canadian personal loan debt statistics to know

What to Look For in a Car Loan

There are several factors to consider when you start looking for a car loan:

  • Try to find a reliable lender. There are many unreputable lenders, so stick with a lender with a good reputation.
  • The interest rate is one of the most important factors. Ideally, you want the lowest interest rate to reduce your spending on loan over its term.
  • Understand the fees involved, like appraisal fees. Know exactly what is involved in the overall cost of your loan before you sign a contract.
  • Choose the type of loan suitable for you, such as a secured or unsecured loan.
  • Make sure you choose a term suitable for your situation, depending on whether you want to pay it off quickly or over a longer period.
  • Can you reduce the loan size by trading in your existing car? Some lenders make this easy.

Pros and Cons of Car Loans


  • There are many lenders in Canada, so you have a wide range of options.
  • Rates can be competitive if you have a good credit score.
  • It’s quick and easy to apply for loans when you use an online lender.
  • There is a lot of flexibility regarding down payments and loan terms.
  • You may be able to get a car loan even with a bad credit rating.


  • There are some dubious lenders online, so you should always use a trusted lender.
  • There may be hidden fees involved, which can make the loan more expensive.


Which bank gives car loans at the lowest interest rate?

Many banks in Canada provide car loans, but the interest rates depend on several factors, including your credit history, down payment, and more.

What is the interest rate on car loans in Canada?

The interest rate on Canadian car loans varies considerably, and it can range from 3% to 29.99% or higher.

Is a 3.5% interest rate good for a car?

3.5% is a good interest rate for a car loan, with most interest rates between 3% and 6% for people with good credit scores.

How can I get the lowest interest rate on my car loan?

Compare lenders to find the best deal. If you have a poor credit rating, take steps to improve it, and you may be able to find a more competitive rate.

Can you negotiate interest rates on car loans in Canada?

You can not typically negotiate interest rates when you borrow from an online lender. However, if you get a car loan from a dealership, you may have more room to negotiate.

Related: Best Payday Loans in Canada.

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SnappyRates Team

The SnappyRates Team comprises personal finance writers who have reviewed and personally tested hundreds of financial products in the Canadian space. With over 20 years of combined experience to draw from and expertise in all things credit cards, banking, insurance, and mortgages, our goal is to provide you with the most comprehensive guides and resources to help you on your financial journey.

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  • One of the best savings rates in Canada.
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*Terms and conditions apply. Limited time offer.