There are heaps and heaps of reasons why your car loan always gets rejected. If you don’t know what they are, then you are looking at the right place. This post will give you the top five reasons you are not getting that car loan application through.
From a whole slew of things, you will never guess what the most common reasons are for car loan rejection. If you are having trouble getting a car loan, try avoiding these common mistakes. If you cannot avoid them, then Carfect can help you out.
In the beginning of your loan application, you will usually fill out lengthy forms. Although the forms are lengthy, everything is checked to the dots on your i’s and to the crosses of your t’s. Therefore, if you put in unclear or incorrect information, chances are your application will be rejected. Unclear information can play a part if you have poor handwriting. Furthermore, every thing on your application will be verified, so make sure you are using facts.
Pro tip: Go over your application form to make you you didn’t miss out on anything.
Don’t worry! You aren’t the only one in the world that has a bad credit score. Even banks can have bad credit scores, but this is another reason why your used car loan applications are always getting rejected. This could be due to problems paying off other things you have to pay for like previous loans or even your credit card. If your credit history seems a bit dodgy, you will probably not be able to get a car loan. So, make sure that you pay most if not some of your bills on time. Making sure that your previous loans are settled and bills are paid on time, you financial records could be kept straight.
Pro tip: Live within your salary. This will eliminate having to solve your credit problems.
Loan amount request
Depending on the amount you are requesting on your loan can affect your loan approval. When they ask you how much you would like to borrow, it may be tempting to say the number you are actually thinking of. However, banks usually have a policy and can only lend you an amount based on your credit score. Usually, the amount of money is based on your income and ability to pay off the loan.
Protip: To get a loan, you should have a substantial amount of money coming in to help match it.
With the economy still trying to get by, many people are still experiencing an unstable income. This, sadly, gives the highest possibility of getting rejected. Furthermore, if you have a record of having an unstable job history, you may have to rethink about even applying for a loan. Usually banks or companies that offer loans will want a guarantee that you will be able to pay them back. However, this isn’t just like asking your friend if you can borrow five bucks.
Protip: Changing your field of work every now and then is not stability. Employment stability is working in the same line of employment.
If you think this is not common, it actually is. Many people have committed fraud and really this did not help all the other honest people trying to apply. But, what is fraud? Fraud is basically deceiving the bank or the company you are applying to. This could mean intentionally changing another person’s identity, changing your credit score and history or supplying wrong data. If this is something anyone plans to do, they should be wary that this will be considered a criminal charges.
Protip: Answer the car loan application or any loan application honestly.
There are many more reasons why your car loan application may get rejected such as foreclosure, repossession, an open lawsuit amongst other things. However, do not fret as you can easily work on fixing your credit. If you have no credit history, Carfect can actually help you build your credit. If you are heavily fixing your credit, you may need to rethink about holding off buying a car for now.