Getting a car is the dream of many individuals. Who else would not want added convenience every day? With a car of your own, travel can be so much easier. You can also enjoy more comfortable rides.
For some, acquiring a car is not that simple. They need to secure car loans to fund their purchase. While applying for a loan is an open option for all, not all applicants might have their loans approved. Lenders have different requirements and conditions. If you want your application to get approved, you need to meet their criteria first.
The only way you can prevent that is to know why car loan applications get rejected. Let this article enumerate the top reasons car loan applications get rejected.
Reason 1: Failure to Provide Complete Documents or Correct Information
Lenders have different sets of requirements. All these aim to determine your lending capacity. Most people find the requirements tedious, but it is for the lender's safety. You need to understand that they only want to make sure that you can pay your loan.
Therefore, when you apply for one, make sure that you take your time and answer all questionnaires completely and accurately. One mistake or missing bit of information can end up with you redoing everything.
The requirements vary, but most of the time, lenders need your bank statements, copies of your payslips, and income statements. All the information you would provide should match all your documents and be free of any misinformation. Otherwise, your loan application might fail.
Reason 2: You Apply for a Loan With a Bad Credit
The credit score is what lenders use to determine your creditworthiness. The higher your score, the greater the possibility of approval. The score is determined by many factors affecting one's credit, such as your number of open accounts, total debt level, repayment history, age of credit accounts, and many other factors.
People with a bad credit score are more likely to be rejected. However, that is not always the case. Sometimes, lenders provide a different means to proceed with the loan despite your bad credit. But in general, people with a low credit score are encouraged to improve their credit first before applying again. You can raise your credit score by making big debt payments, reducing your credit card balance, limiting your requests for new credit, and more.
Reason 3: You Have Insufficient Funds
Another factor that lenders would consider is how much you make now. Not only will it help them identify the kind of car you can afford, but it would also help them determine if you have enough money to pay for your loan.
Whether you secure private financing or dealership finance will depend on your current income capacity and monthly expenditures. Other loans, your number of dependents, your length of stay in your current job, and income changes over the past six months would affect the result too.
That they might decline your application after seeing that you do not have enough income and savings to sustain this purchase.
Make sure you submit complete documents with accurate information. Have the capacity to pay your monthly dues and build a good credit history. If you have concerns about any of these factors, ask your lender for a workaround or look for alternative finance providers with more flexible requirements.
If you are looking for the fastest car loan approval in Sydney, Wealthy You can help you. We are Sydney's leading car loan and finance broker. We bring in our experience and expertise to ensure that you get the best offers and make decisions that count. Let us help you find a competitive interest rate and a repayment plan that suits you. Contact us today at (02) 7900 3288.