You want to get a car but you don't have enough money to pay for it outright? What do you? Of course, the smartest and easiest way to get that dream car is to get a >car loan. You fill up all the applications, submit all the documents, and let the providers do their thing. Already, you can see yourself being all fly, driving like a boss. One day you get a call, and all your dreams of cruising through the city streets are shattered and shut down, swiftly and cruelly by the big man. You're there thinking "Why? Why me?" Here are a few possibilities:
Your Credit Score
Most people go to credit unions, banks, and dealerships to get a car loan. These businesses rely heavily on their applicants' credit score to assess risk and determine if you’re creditworthy. One of the most common reasons that lenders will consider you not to be and (in turn) deny your application is if you have a credit score that's 620 or lower, making you a "bad risk".
Did you know that whenever a creditor checks your credit report, for whatever reason, your score lowers by a few points? Constant credit report checks are frowned upon because in their eyes this means you need to borrow more money. This is another thing that your auto loan broker or car loan lender may be taking into consideration.
If you really need a reliable vehicle but keep getting rejected because of bad credit, you can always look into getting a car finance from Alpha. As long as your current income can handle the repayments, previous cases of bankruptcy and current bad credit won't necessarily be a hindrance to getting approval.
Incomplete or Incorrect Documents
Before your application is approved or denied, you need to send the lender a few documents. This includes proof of income, a correctly filled-out application, reports of previous loans, Identification and other documents. Whether the borrower forgot to attach a document or purposely withheld information, lenders will automatically see this as a red flag and deny the application on principle.
Remember that before you submit any of the documents double and triple check them for any errors or missing information. You might just save yourself from being misjudged or having your records be looked at with suspicion by a lender.
If you're a non-Australian resident, it is a great deal harder to get an auto-loan approved. It doesn't matter if you have a working visa or student visa. As long as you're not an Australian resident, lenders will automatically consider you to be a bad risk. This is because they're avoiding cases of non-residents leaving the country with unpaid debt. It has happened before. So you need to prove somehow you aren’t a flight risk.
If you're under 25, even if you are of legal age, it can still be difficult to secure an auto loan on your own. In fact, you most likely will have trouble with financial things like borrowing money, getting car hire, getting a credit card, or getting car insurance without the assistance of your parents or legal guardian.
While you may be a responsible young adult who can handle repayments and such, you will still be considered to be higher risk. If you truly need a car when you're below 25, you can have your parent or legal guardian sign as your guarantor. If that's not possible, you can improve your chances of getting a loan by ensuring that you have adequate income to cover for repayments and a good credit file.