CTL launches Rate Reducing Loan


A new financing option that rewards qualified customers with interest rate reductions every year of the loan has hit the market.

Launched nationwide in early October with Quebec to follow in November, the Rate Reducing Loan is from the growing portfolio of options offered by CTL. The loan is aimed at non-traditional customers who couldn’t secure financing at a traditional bank.

According to company president and CEO Jeff Newhouse, the product was designed to help dealers improve business and help customers find and finance the best vehicle option for their needs.

“We wanted to create a contract that would reward consumers who were committed to rebuilding their credit by reducing the interest rate on their contract each year,” he says, noting the product essentially accelerates the principal and reduces the interest consumers have to pay.

Under the term guidelines, the interest rate can be reduced by up to 10 per cent of the current rate each year to a maximum of 10 per cent of the total loan. For example, a qualified customer who agreed to an annual interest of 20 per cent at the start of the term would be eligible for an interest rate reduction two per cent making the adjusted annual interest rate 18 per cent.

If the customer re-qualifies after another 12 months, they are eligible for another 10 per cent reduction (1.8 per cent) making the new annual interest rate 16.2 per cent, Newhouse says.

“We pride ourselves as being pioneers in the industry. We even copyrighted it!” he boasts. “We want to help consumers who have some bruised credit but want to rebuild it. CTL can help them rebuild it and then reward them by reducing the interest rate over the term of the contract.”

Customers can qualify 12 months into the term of the loan if all payments are made on time, no payments have been returned, the vehicle has not been in any accidents and if they have complied with all of the requirements of the loan agreement.

Just how much a customer can save with the Rate Reducing Loan depends on the amount, interest rate and term. For example, a customer with a $15,000 loan over a term of 66 months with an interest rate of 32 per cent would save approximately $4,053 and pay off the loan eight months earlier with CTL’s Rate Reducing Loan.

The Rate Reducing Loan applies to the entire suite of CTL’s loan portfolio. All a customer would have to do is send a written request to CTL once per year after the anniversary date of the loan agreement or previous request, he says.

This is the latest innovative product from CTL. Since hitting the market in 2010, CTL has grown to be the second largest non-bank finance company in the automotive space. It currently offers automotive terms from 48 to 72 months.

“Our motto is Respectful, Logical Lending. Our biggest goal is to ensure customer loyalty for our dealer partners,” Newhouse says. “What better way than by rewarding diligent payments with a reduced interest rate.”

For more information, contact your CTL territory representative.