One of the most dreaded statement when applying for a loan is “you do not qualify for a car loan.” These words can be so devastating and often lead to you asking yourself several questions. However, it is worth noting that the reasons why you might be finding it difficult to get car finance are neither hard-to-uncover nor cryptic, as they are usually easy to explain. If you are having a hard time getting car finance, below are some of the reasons that might be attributable to your situation.
Timing in this context does not necessarily mean the hour of application. Rather it has to do with your circumstances, with factors like your job status playing an important role in this case. The lender will usually want to consider your job status and the reliability of the situation to determine your creditworthiness and other such aspects of the loan.
Errors in Credit Report
This is a common factor that inhibits people from getting car finance. The bureaus handling your credit information are not always free from mistakes as they sometimes do get their facts straight. This consequently means that the lending institution will have the wrong perception of you judging by your report, which could adversely affect your chances of getting car finance. This is particularly true as lenders do not do the extra work of investigating the report to ascertain its accuracy.
This is where you have to come in to obtain a credit report and go ahead to dispute the claims if you are sure of having healthy credit and a good payment history.
One of the requirements for getting approval for a car loan is the presentation of a series of documents to the lender. Consequently, if one of such documents is not submitted for any reason, getting car finance might be almost impossible as the lender would not be able to process the application. The simple solution to the problem is to ensure that all the required documents are submitted.
Provision of Wrong Information
This is quite similar to the point raised above. If the information provided to the lending institution is inaccurate, the application will simply not go through. While no one will ordinarily want to provide the financing company with wrong information, mistakes are bound to happen and could lead to the supply of inaccurate details. Therefore, it is advised that you double check or even triple check the information provided for seemingly negligible errors that could affect your application.
One of the factors considered by the lending institution before granting a loan is the applicant’s income. It is also worth noting that lenders are usually on the lookout for probabilities and patterns. This is to ascertain the likelihood of paying the loan regularly and on time.
Other common reasons that make it difficult to get car finance include a relatively “too young” credit for a car loan and simply asking for too much considering your circumstance.