Powersport Financing

Snowmobile Financing

Powersport Financing is your #1 choice for Snowmobile financing & bad credit Snowmobile loans due to our seamless application process and dedicated financing specialists. We offer competitive rates and flexible repayment terms, making Snowmobile ownership affordable. Our commitment to customer satisfaction ensures personalized attention and responsive support.

How Does Snowmobile Financing Work?

Good and Bad Credit Snowmobile Loans easy as 1,2,3

1. Application

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2. Choose Snowmobile

Choose to buy from a private seller or from a dealer

3. Enjoy!

The Fun part!

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Bad Credit Snowmobile Loans

At Powersport Financing we have a dedicated team of bad credit specialists standing by to not only get you approved for a loan but to make sure we get you the Snowmobile of your dreams!

Snowmobile Financing Q&A

Snowmobile financing in Canada allows buyers to spread out the cost of purchasing a new or used snowmobile over time through a loan. Most snowmobile dealerships work with lenders to offer financing options to customers with various credit scores. The most common loans are installment loans, where you make regular payments over a set period of time. Interest rates and terms vary based on factors like your credit score, down payment, and loan amount.

Yes, it is possible to get a snowmobile loan even if you have bad credit. Many lenders specialize in bad credit loans and are willing to work with borrowers who have less than perfect credit. The interest rates may be higher than with good credit, but you can still qualify if you meet the lender’s criteria. Look for lenders that advertise bad credit snowmobile loans and be prepared to provide documentation of income. A higher down payment and collateral like the snowmobile itself can also help improve your chances of getting approved.

 

With bad credit, it’s important to shop around and compare interest rates and terms from multiple lenders. Always read the fine print so you understand the full cost of the loan. Consider getting a cosigner with better credit to potentially lower your interest rate. And make payments on time once approved to start rebuilding your credit.

The main requirements for getting approved for snowmobile financing in Canada are:

 

A good credit score – Lenders generally look for scores above 650. The higher your score, the better the terms you can qualify for.

Stable income – Lenders want to see you have enough income to comfortably make the monthly payments. They may ask for pay stubs, tax returns, or bank statements.

Down payment – A 10-20% down payment is typical. The larger the down payment, the better the loan terms.

Proof of residency – You’ll need documentation proving you’re a Canadian resident. This includes a driver’s license, utility bills, etc.

Proof of insurance – Lenders require you insure the snowmobile, so you’ll need to provide proof of insurance.

 

Meeting these requirements gives you the best shot at getting approved and securing favourable interest rates and terms.

To get the very best snowmobile financing rates in Canada, you generally need a credit score of 720 or higher. Here’s a breakdown of recommended credit scores:

 

Excellent (720+): The best rates and loan terms. Often no money down.

Good (680-719): Still considered good credit. Slightly higher rates than excellent scores.

Fair (630-679): Approval still likely but higher interest rates. May need 10% or more down.

Poor (Below 630): Approval difficult. High rates if approved. Significant down payment often required.

 

It’s a good idea to check your credit score before applying for snowmobile financing. If your score is below 680, take steps to improve it to get better loan terms. Make payments on time, lower credit utilization, and correct any errors.

Most lenders have a minimum income requirement to qualify for a bad credit snowmobile loan in Canada. This helps ensure borrowers can afford the monthly payments. Typical minimum income requirements are:

 

– Full-time employment with steady income. Many lenders require at least 1 year at your current job.

– Minimum annual income of $25,000 – $30,000 for an individual.

– Minimum household income of $40,000 – $50,000 for joint applicants.

– A debt-to-income ratio below 40%. This calculates your current monthly debts versus income.

– Stable income sources like full-time employment rather than seasonal work or side jobs.

 

Even if you have bad credit, steady verifiable income can help you qualify for loan approval. Offering a substantial down payment from savings and collateral like the snowmobile itself can also offset lower income. If you don’t meet the minimum income level, applying with a cosigner may help you get approved.

The average interest rate on snowmobile loans in Canada is 6% – 12%. However, the specific rate you are offered will depend on factors like:

 

Your credit score – Better credit means better rates, generally below 8%.

New or used – New snowmobiles often qualify for 0% promo financing. Used sleds have higher rates.

Down payment – Larger down payments reduce rates. At least 20% down ideal for best rates.

Loan term – Shorter terms (2-3 years) have lower rates than longer terms (4-6 years).

Lender – Rates can vary between lenders. Check with banks, credit unions, dealerships.

Special offers – Look for limited time low APR promotions offered by lenders.

 

Getting pre-approved lets you compare rates. Aim for the lowest rate possible for your situation, ideally below 8% if your credit allows.

These are the typical documents required when applying for snowmobile financing in Canada:

 

Proof of income – Recent pay stubs, tax returns, profit and loss statement if self-employed.

Proof of residency – Driver’s license, utility bill, or bank statement with current address.

Proof of identity – Driver’s license, passport, birth certificate, or health card.

Down payment – Receipt if already paid, or bank statement showing funds if not.

Insurance quote – To show you will insure the snowmobile.

References – Some lenders request personal and professional reference contact info.

 

Having these documents ready streamlines the application process. Many lenders allow uploading documents online during e-application. Check with the lender for any other specific requirements.

The typical down payment amount for a snowmobile loan in Canada is 10-20% of the purchase price. For example:

 

On a $10,000 snowmobile, expect a $1,000 – $2,000 down payment.

On a $15,000 snowmobile, expect a $1,500 – $3,000 down payment.

 

Factors that influence down payment amount include:

 

Your credit score – Better credit means potentially less down payment needed.

Loan term – Shorter terms may require larger down payments.

Lender requirements – Each lender sets their own down payment expectations.

New vs used – Used sleds often require more money down.

Special offers – Look for deals with reduced or no down payment offers.

 

Ideally put down 20% or more to get the best rates and loan terms. Work within your budget, but know more down lowers payments.

Common snowmobile loan terms available from Canadian lenders are:

 

– 12 months

– 24 months

– 36 months

– 48 months

– 60 months

– 72 months

 

12-36 month terms are most common for snowmobiles. Longer terms like 60-72 months lower the monthly payment amount but increase total interest paid over the life of the loan.

 

Factors that determine available loan term options are:

 

Age of snowmobile – Newer sleds qualify for longer terms than older ones.

Loan amount – Higher loan amounts may need longer terms to lower monthly payments.

Down payment – Larger down payments allow shorter loan terms.

Lender – Each lender sets their own maximum term lengths.

Credit score – Better credit means more term length options.

 

Aim for the shortest term you can afford based on the monthly payment. This saves on total interest costs over the loan.

Yes, getting pre-approved is highly recommended before shopping for a snowmobile loan in Canada. Here are some key benefits:

 

Know your budget – Pre-approval shows the monthly payments you can afford.

Lock in rates – You may secure a low rate by getting pre-approved.

Negotiate power – Dealers know you are a serious buyer and may offer better prices.

Faster approval – Final loan approval moves quicker once you’ve found a sled.

Multiple lenders – Compare rates from different lenders without impacting your credit.

 

The pre-approval process is simple and gives you important information as you search for the right snowmobile. Dealers also prefer working with pre-approved buyers.

There are several options to get pre-approved for snowmobile financing in Canada:

 

Your bank or credit union – Many offer recreational vehicle loans, including snowmobiles.

Online lenders – Lenders like TD Auto Finance, Lendcare, ScotiaDealerAdvantage, etc. allow online pre-approval.

Snowmobile dealerships – Most dealers work with lenders and can pre-approve you through their connections.

Snowmobile forums – Fellow riders share lenders they’ve had success with.

Snowmobile events – Look for lenders promoting pre-approvals at shows, races, festivals.

Loan brokers – Brokers access multiple lenders to find you the best rate.

 

Checking rates from 3-4 of these sources will give you an idea of the loan terms and monthly payment you can qualify for. Having a pre-approval letter in hand puts you in a strong negotiating position as you search for your dream snowmobile.

Here are some common fees to expect with snowmobile loans in Canada:

 

Interest – The cost of borrowing money. Rates range from 0% (promotional) up to 15% for borrowers with poor credit.

Origination fee – A one-time fee to initiate the loan, often 1% – 2% of loan amount.

Processing fee – Cost for the lender to process application documents, $100 – $200.

Title fee – Fee to register lien on snowmobile title, around $25.

Early payoff penalty – If paying loan off early, may be charged interest for remaining months.

Late fees – Typically $15 – $30 for late monthly payments.

NSF fees – Up to $45 fee for payments returned for non-sufficient funds.

 

Ask the lender for full details on all fees to avoid surprises. Interest and origination fees are most common. Choose the lender with the lowest rates and fees for the best overall loan cost.

With a complete application, you can usually get approved for snowmobile financing in Canada within:

 

Instant approval – Some online lenders provide instant decisions.
24 hours – Many lenders provide approval within 1 business day.

3-5 days – More typical for financing through dealerships.

1-2 weeks – Timeframe when providing documentation by mail instead of digitally.

 

Factors that influence the approval timeline include:

 

Lender requirements – Each lender has their own process timeframes.

Application completeness – Missing documents delay approvals.

Credit checks – Time needed to obtain and verify your credit reports.

Verification – Calling your references and employment to confirm application details.

 

The easiest way to get a fast approval decision is to apply digitally with a lender that offers instant decisions or 1-day turnaround. Have all your documentation ready before starting the application.

When financing a snowmobile in Canada, it’s important to budget for ongoing maintenance costs like:

 

Oil changes – Recommended after first 20 hours, then every 100 hours of riding. Costs $40-$60.

Belt replacement – $120-$150 every 2-3 seasons as belts wear out.

Track replacement – $250-$350 every 2-3 seasons as tracks age.

Spark plugs – Should be replaced yearly at $10-$20 each.

Fuel filters – Require replacement every 100-200 hours of use.

Battery – May need replacement every 3-5 years. Costs $50-$100.

Storage fees – For off-season storage at dealership, if not storing yourself.

Insurance – Require liability coverage year-round. Comprehensive coverage optional.

Registration – Yearly registration/license fees that vary by province.

 

Budgeting $500-$1000 yearly for maintenance and operating costs ensures your sled stays in top condition while paying off your loan.

New Snowmobile Pros

– Lower interest rates and longer financing terms

– Under factory warranty – repairs covered

– No maintenance or repair costs initially

– Newest technology and features

– Custom ordering options

 

New Snowmobile Cons

– Higher purchase price

– Higher depreciation when new

 

Used Snowmobile Pros

– Lower purchase price

– Often no sales tax on private sales

– Someone else took depreciation hit

 

Used Snowmobile Cons

– May inherit unknown problems

– Higher interest rates on financing

– Shorter loan terms available

– Out of warranty – repairs are out-of-pocket

 

Weigh the pros and cons based on your budget, riding needs, and mechanical skills. New or used, inspect thoroughly before purchasing.

The maximum loan amount you can qualify for a snowmobile with bad credit in Canada will depend on:

 

Your income – Lenders usually require minimum $25,000 individual or $40,000 household income.

Your existing debts – The higher your debt-to-income ratio, the lower loan amount.

Your credit score – Scores below 600 will have lower approval limits.

Down payment – 20-30% down shows commitment to repaying the loan.

Collateral – Using the snowmobile as collateral provides security.

Cosigner – Applying with a cosigner with good credit can increase loan size.

 

A typical loan amount for someone with poor credit is $5,000 – $15,000. However, with strong income, sizable down payment, and other factors, you may be able to borrow up to $25,000 even with bad credit. Shop multiple lenders to compare loan offers.

Here are some tips for getting the best deal when financing a snowmobile in Canada:

 

Get pre-approved financing – Gives you negotiating leverage and shows you’re serious

Understand your credit – Know your credit score and report so you qualify for the best rates

Research prices – Compare MSRP, invoice price, and market selling prices to find deals

Be flexible on models – More common models often have better promotions and incentives

Consider used sleds – Saves money upfront, but higher financing rates

Buy off-season – Best deals as dealerships try to clear old inventory

Negotiate all fees – Don’t be afraid to negotiate loan fees, registration costs, etc.

Take advantage of sales – Attend shows where dealerships compete with discounted pricing

Bundle accessories – Ask for free or discounted addons like covers, racks, grips

 

Doing your homework pays off. Be persistent and don’t settle for the first offer.

If you’re unable to make payments on a snowmobile loan in Canada, take these steps:

 

Contact your lender immediately – Explain the hardship and ask about options. Don’t ignore the problem.

Request loan deferral – Temporarily pause making payments for 1-2 months if needed.

Extend the loan term – Making smaller payments over more time may help.

Refinance the loan – Seek a lower interest rate to reduce the monthly payment.

Sell the snowmobile – Use proceeds to pay off the loan and relieve the burden.

Consolidate debts – Combine multiple debts into one lower payment.

Use credit counseling – Non-profit agencies provide advice and negotiate with lenders.

 

The worst thing to do is default on the loan. Be proactive in communicating with the lender to explore options so it doesn’t impact your credit.

There are no specific tax breaks related to snowmobile loans in Canada. However, the tax implications when financing a snowmobile include:

 

Sales tax – In most provinces, you must pay sales tax on a new snowmobile purchase, which adds to financing amount.

Loan interest – Interest paid on a snowmobile loan is not tax deductible for personal use.

Registration and insurance – These costs may be tax deductible if you use the snowmobile for commercial purposes.

Business use – If using for commercial purposes, payments may be a business expense you can deduct.

Disposition – If you sell the snowmobile for more than your remaining loan balance, the gain may be taxable.

 

Consult an accountant or Canada Revenue Agency for specifics based on your situation. For most personal snowmobile purchases, sales tax and registration are the primary tax impacts

Paying off your snowmobile loan early in Canada has several benefits:

 

Interest savings – Pay less total interest by reducing the loan’s duration.

Faster ownership – Own your sled free and clear sooner.

Equity building – Shorter loans build equity faster as more principal is paid.

Lower term costs – Eliminate loan fees and insurance costs sooner.

Improved cash flow – End payments to redirect cash to savings or other goals.

Credit score boost – Demonstrates positive payment behaviour.

Peace of mind – The satisfaction of becoming debt free.

 

The main benefit is saving on interest expenses by shortening the loan term. Even a few extra payments can make a difference. Review your loan documents to ensure no prepayment penalties apply.

Key questions to ask lenders when applying for snowmobile financing in Canada:

 

– What are your current interest rates and promotions?

– How much down payment is required?

– What loan terms do you offer?

– Are there loan origination or processing fees?

– Will my credit score qualify me for financing?

– How long does the approval process take?

– Do you finance older model snowmobiles?

– Can I get pre-approved before shopping?

– Are there penalties for paying my loan off early?

– Do you offer extended warranty or maintenance plans?

– Will I save on insurance through your company?

– What incentives or discounts do you offer?

– If approved, when will I receive my funds?

 

Asking these questions upfront ensures you get accurate information to make an informed financing decision. Compare lender responses to find the best loan for your needs and budget.

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