A consumer proposal is a smart way to deal with debt — but most people are surprised by how many doors close once they file one. Mainstream banks usually decline auto financing during the proposal, and often for years after it is paid off.
905 Autos works with lenders who actually understand consumer proposals: how they appear on credit reports, why people use them, and which applicants are safe to approve. If you are currently in a proposal or recently completed one, you are exactly the file these lenders are built for.
How a consumer proposal affects your credit
A consumer proposal appears on your Canadian credit report as an R7 rating, and it stays there for three years after you complete the proposal (or six years from the file date, whichever comes first). During that window — and often beyond — banks and credit unions will reflexively decline auto financing.
The specialist lender world looks at it completely differently. To them, a consumer proposal is actually a positive signal compared to mounting unpaid debt: it shows you took responsibility, you are making structured payments, and you are stabilizing your finances. Many proposal applicants get approved without much friction at all.
What you need to get approved with a consumer proposal
The exact requirements shift slightly depending on whether you are mid-proposal or post-proposal:
Trustee acknowledgement (if mid-proposal)
If you are still in your proposal, the lender will want a letter or email from your Licensed Insolvency Trustee confirming you are current on your proposal payments.
Proof of income
2 most recent paystubs OR 90 days of bank statements. Self-employed: 2 years of T1 Generals.
Down payment
Typically $1,000–$2,500 — sometimes less if your file is strong on other dimensions.
Steady employment
3+ months at your current job ideally; 6 months is even stronger.
Proof of address
Utility bill, lease, or property tax statement from the last 90 days.
Photo ID
Ontario G2/G driver's licence.
How proposal-friendly financing works
Apply online
Two-minute application. Tell us upfront that you are in or have completed a proposal — it matters for routing, and lying about it is an automatic decline.
We match you to a proposal-friendly lender
Several Ontario lenders specifically approve consumer proposal files. We route yours to the one most likely to give you the best terms.
Get approved and drive
Most decisions come back same business day. From application to driving home is typically 1–3 days.
Realistic terms for a consumer-proposal car loan
Like any subprime financing, rates are higher than what someone with prime credit pays. But they are not absurd — and if you have a paid-off proposal with at least 12 months of clean post-proposal credit, you can sometimes qualify for surprisingly close-to-prime terms.
The smart play: get into a reliable vehicle now, make payments perfectly for 12–18 months, then either refinance to a better rate or trade up at much better terms. This loan is a tool to rebuild — use it as one.
- Typical loan amount: $12,000 – $30,000
- Typical term: 48 – 72 months
- Typical APR range: 10 – 20% (lower if proposal is fully paid)
- Same-day decisions are common
- Down payment: $1,000 – $2,500 typical
Frequently asked questions
Can I get a car loan while I am still in my consumer proposal?
Yes. Several specialist Ontario lenders approve mid-proposal files. They typically need a letter from your trustee confirming you are current on your proposal payments, plus the standard income and address documents.
How soon after my proposal is paid off can I get approved?
Immediately. Many of our customers apply within a few weeks of their final proposal payment. Post-proposal approvals are often easier and at better rates than mid-proposal ones.
Will the lender contact my trustee?
For mid-proposal applications, yes — usually for a confirmation letter. The lender just wants to verify the proposal status and payment standing. It is a standard step, not a flag.
Will my proposal trustee block this?
Trustees do not block borrowers from getting a car loan, but they may discuss it with you to make sure the new payment fits your budget. If your proposal is going smoothly, a car loan is almost always green-lit.
Is this going to hurt my credit further?
No — making on-time auto loan payments is one of the fastest ways to rebuild your credit post-proposal. After 12–24 months of clean payments, your file will look meaningfully better.