Are you in the market for a new car? Have you come to the conclusion that you need to secure a car loan in order to complete the transaction?
This sounds simple enough, and it can be if you have good or excellent credit. However, there’s no guarantee that your car loan application will be approved—and that’s especially true if your credit score is on the low side (or you have no credit history).
There are a variety of steps you can and should take if your car loan application is denied. Here’s a good jumping off point:
1. Find Out Why
Talk to the lender about the reason for your denial. This will go a long way in helping you understand what went wrong and the steps you can take to get back on track in the near future.
You may soon realize that you can make a few adjustments to your finances with the goal of obtaining an approval in the near future.
Just remember, if you don’t know why your application was denied, it’s impossible to remedy your situation.
2. Expand Your Search
Just because one lender denies your application doesn’t mean that another will do the same. By expanding your search to include both local and national lenders, you’ll find yourself in a better spot.
This also gives you a better idea of if the original lender was using too strict of borrowing requirements.
3. Make Changes
If you continue to go down the same financial path, you’ll continue to experience the same results. It’s critical that you understand why your loan was denied, and then make changes for the better.
For example, if you currently have too much debt to qualify for a car loan, consider the steps you can take to eliminate some of it in the near future.
Sometimes, all it takes is a few small changes to have a big impact on your financial health.
There’s no shortage of lenders that are willing to speak with you about your borrowing needs. When you take the time to have multiple conversations, you’ll begin to better understand your current situation, what to do next, and which lender has your best interests in mind.
A car loan application denial is frustrating, but there’s no reason to believe that it’s the end of the road.
By taking the steps above, you’ll come to better understand your current situation. And when you do that, you’re also in position to change your approach to improve the likelihood of an approval in the near future.
Have you ever run into a situation in which you can’t obtain a car loan approval? How did you deal with this? Were you able to eventually make a purchase?