It’s no secret that some people have trouble getting approved for a loan. A loan that will be presumably used to get them something they really need, like a car or a downpayment for a house. But if misfortune smiles down upon you, what are you going to do? Are you going to just sit there and take it?
It’s pretty hard to bounce back from a rejection. It makes you feel like you have no chance to get what you need and it’s going to discourage you from trying again with other companies. And you will definitely not be approved for any loans in the future if you stay there wallowing in your sadness. So, it’s time to pick yourself up and get it together.
Understand the Problem at Hand
Before you go and hand out more applications for loans, take a step back and ask yourself: “what went wrong with the last one?” Now, take a look at your first application and find out why it was rejected. You can go up to the lender and ask them why they refused. They can give you an answer, but the two most common reasons are:
Credit problems. Lenders will have access to your borrowing history. If they see that you’ve previously taken out loans in the past and have failed to pay for it on time, then they won’t feel confident enough to trust you with their services. That’s why it’s a good idea to make sure that your history with borrowing money is a positive one rather than a bad one.
Income is not enough. A reason they check your income is to see if you can afford to pay the minimum payments for the loan. This is a way to protect themselves from borrowers who will take their money and then not be able to pay it back.
Find a Quick Fix
Now that you’ve established the problem, the next step is to try and come up with a quick solution to ensure that you can get approved for a loan. It’s important to keep in mind, however, that not all problems have a quick fix. Only a few problems have a quick solution, such as:
Clerical errors. Sometimes, mistakes happen. Double check your paperwork, and cross check it with the record you have kept of your own finances. If you see something that doesn’t add up, talk to the people whose job it is to fix it. Remember, you don’t have to suffer for somebody else’s mistakes.
A larger down payment. Some lenders may reconsider if you propose you make a larger down payment. As this can mean less money will be put at risk and your monthly payments will be a lot lower.
A Long Term Solution
Can’t find a way around your problem with a quick fix? Then maybe, a long term solution may be more beneficial. But this will mean a few changes to your lifestyle and your finances as a whole. A long term solution needs commitment and responsibility.
Build Your Credit. Think of this like building a lender’s trust. You can take out smaller loans, and make the payments on time all the time. This can help improve your credit score and help you get approved for the original loan you were looking to get.
Pay Off Other Debts. If you have other debts like phone bills and utilities that have been gathering dust and unpaid, then it’s time to get organised and pay these debts off. Clear out your previous list of debts to ensure that you have a clean slate before asking for that loan again.
Keep in Mind Before You Re-apply
As a last reminder, take a long look at yourself before you consider re-applying. Imagine yourself as a lender, and take a look at your history. Is there reason for you to reject yourself if you were to view that record? Is your income enough to sustain the payments? If you answered yes to all of these, then you’re finally ready to send that application once again, and hope for the best.
There are several reasons to have a loan application rejected. Luckily, there are also plenty of ways to work around it. Applying for a car loan even if you have bad credit shouldn't be an issue. Just make sure to look for a credit or lending company that offers low upfront payments and affordable repayment rates. With that said, come talk to us here at Alpha Car Finance. We offer downpayments starting from $290, and our selection of vehicles is guaranteed to find you the best one foryour needs. Let’s work together to find a solution to your situation.