Being rejected for a car loan application can be very disappointing, especially if you were counting on it to get your new vehicle. Now, being rejected once and getting accepted in your second attempt with a different lender is no harm no foul. But if you keep getting rejected each time, then it’s time to step back and assess your current situation.
“Why was my application rejected?”
You need to ask yourself this question and then look at the possible reasons. Once you’ve identified it, you can then look into fixing the problem and hopefully have a better chance of applying for another car loan. Here are the most common reasons for car loan application rejection:
Lenders will look at your complete financial profile and determine from there how they will proceed. You should be able to provide them with a source of income, and how long you have been with your current job.
These factors will help them determine if you will be able to afford the repayment rates of the loan without putting you through too much trouble.
Now, if you are new to a job; it is best to wait at least six months to a year before applying for a car loan. That way, lenders will see that you can commit without trouble. This is also the perfect time to buff up your savings. It also helps to show them that you are capable of paying all of your bills on time.
Incorrect information/incomplete documents
A lot of Australians either put the wrong information or don’t submit the complete documents that lenders require. That is why it is important to double check the information you wrote and if you have everything that is there for the requirement.
To help you stay organised, you can either request for a checklist or create your own, of documents to be handed in from the bank. This way, you can double check if you have everything you need before making the trip to submit your files.
Terrible credit score/in debt
There are many contributing factors to your credit score, and debt is one of them. When you are deep in debt, the last thing you want to do is get another one. Instead, you should focus your efforts on figuring out ways on how to lower your debt and looking to rebuild your credit score.
If you are in need of a car right now and need a way to fix your situation, then you should consider getting a car lease to help you. That way, you get a car and have the opportunity to rebuild bad credit. Just make sure to make your payments on time.
Now that you have a better idea of what could have gone wrong with your application, you can now take action and try again. But if something more significant is holding you back, like a large amount of debt, adjust your expectations and try to look for other ways to get behind the wheel of a car.