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My Car Loan Application was Declined, what now?

My Car Loan Application was Declined, what now?

Nobody likes rejection, especially if it stops you getting what you want, but it’s part of life. We do everything we can to help prevent refection but if you applied online or with another dealership, rejection may be something you have to contend with.

 

That isn’t the end of the story though as there is always hope!

 

We asked our Burford auto loans team to explain the next steps you should take if your car loan application was declined.

 

Lenders all across Canada are on red alert

 

Even people with decent credit are getting turned down when they apply for a car loan.

 

Your situation is not unique; lenders are on red alert because just about every report you see on the news has an expert talking about rising inflation, skyrocketing interest rates, and a recession just around the corner.

 

You need to understand what lenders are looking for, so you can position yourself for success, but remember you are not alone on this journey.

 

Get back on the horse

 

The first thing you need to do is pick yourself up, dust yourself off and get back on the horse.

 

That means taking a long hard look at the application, your situation, the loan you applied for and the reason your car loan application was declined.

 

Most lenders will tell you exactly why they declined your application so let’s start there.

 

Depending on what they said, take a look at one or all of the following.

 

Check your credit report

 

Did you check your credit report before applying? We always recommend you do that to make sure there are no errors and to check the report accurately reflects you and your financial position.

 

If you spot errors, having them corrected before you apply again. Contact the bureaus and submit a Equifax Consumer Credit Report Update or TransUnion credit investigation request depending on where the error is.

 

Also check your credit score. Did you ask to borrow too much for that score? Has it taken a hit recently? Do you have a lot of debt already? Have you recently missed a loan payment?

 

All these things can be cause for refusal.

 

Insufficient income

 

Did you provide enough evidence of income? Does your income provide enough leeway to comfortably afford the loan? Lenders now have to assess affordability as part of the auto loan application process.

 

If you’re asking to borrow too much or the monthly payments eat up too much of your disposable income, that can be cause for refusal.

 

If that’s the case, borrow less, extend the loan term so monthly payments are lower, put more money down or cut back on your outgoings so you have more disposable income.

 

Or do all four!

 

Not enough proof

 

Not having enough documentary proof of income, savings or your finances can sometimes be a reason for refusal.

 

Usually, bank statements and salary statements are enough to prove your income. Sometimes, for those with non-standard employment situations or who work somewhere with informal pay practices, it can be difficult to

prove income.

 

If that’s the case, ask your employer for formal notification of salary, use your tax return and show more bank statements showing your pay hitting your account on a regular basis.

 

Work with auto loans experts

 

If your auto loan application was refused for any reason, you need to work with the experts. Auto finance experts for whom refusal is a rarity and who value every single customer equally.

 

We’ll do everything we can to prepare your loan application so it stands the highest chance of success. It’s what you deserve!

 

We will use all our skill and experience to deliver the lowest possible Burford auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

 

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Categories: Auto Loan

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