So, what exactly is a car loan? Well, it's a type of financial assistance offered by banks and other financial institutions to help you purchase what they call a necessity in this day and age OR a pre-loved beauty. Put simply, a car loan lets you own a car even if you’re not ready to come up with the money to pay the total price upfront. Essentially, they lend you the money needed to buy the car, and you'll repay the loan in monthly instalments over an agreed-upon period.

In Canada, car loans work in a pretty similar way to how they do in other parts of the world. You approach a bank or a lender, apply for a car loan, and they evaluate your financial history and creditworthiness. Based on that, they'll offer you a loan amount, along with the terms and interest rates. Basically, the bank or any other lending institution extends you the credit, which is generally equal to the cost of the vehicle, and you make loan payments to repay that amount. Once you make your final regular car loan payments, you will fully own the vehicle.

First things first, you need to do some research! Look for the car that suits your needs and budget. The reason why we are even considering this point is because owning a car might mean different things to different people, depending on their requirements. Once you have a specific car in mind, you'll have a better idea of how much money you need to borrow.

With your dream car in sight, it's time to apply for a car loan. You can either do this in person at your local branch or conveniently apply online through the website. Remember to compare different lenders to get the best deal!

In Canada, credit scores range from 300 to 900. A higher score increases your chances of approval and may even lead to lower interest rates. However, these figures are nothing to worry about! This is because roughly less than 1 in 6 people have scores high enough to reach the 800 mark, and the average credit scores range from 650 to 700.

Once your creditworthiness is evaluated, the lender will offer you a loan amount and present the terms and interest rates for car loans in Canada. Be sure to read through the terms carefully to understand the total cost of borrowing and avoid any hidden fees.

After all the paperwork is done and you drive off with your new car, it's time to start making those monthly payments. These payments usually include both the principal amount and the interest.

Car loans in Canada usually have a fixed repayment schedule, commonly ranging from 3 to 7 years. The longer the repayment period, the lower your monthly instalments, but keep in mind you'll end up paying more in interest (at the trade-off of having lesser monthly payments, of course).