After a few years, you are bound to get bored with your car. Or maybe, a new vehicle catches your eye. It doesn’t matter why you do it; the chances are sooner or later you would want to sell your old car and buy a new one.
Have you ever wondered, “If I sell my car, will I have money to buy a new one?” Well, not really. Unless you are buying a used car, you will have to pool in extra money as well. Don’t have enough resources? Don’t worry. The beauty of auto loans is that it allows you to buy a car before you have enough finances to do so!
Did you know that the cumulative auto loan taken by Americans alone has a staggering value of $564.6 billion by the end of 2017? That too at a prevailing interest rate of 4.43%. While these stats might make you hopeful that you also will get an auto loan easily, this is not always the case.
Instead, a lot of car loan applications are rejected. Here are some reasonswhy your car loan may not get approved.
- Incomplete information
The most common reason for refused car loans is incomplete or wrong information being provided during the application process. Something as small as mistakenly writing the wrong mobile number can cost you your car loan! This is why you must fill out the application as carefully as humanly possible. Double check each information. Get someone else to check it for you as well to avoid making mistakes.
- Bad timing
Let’s say you fill out your form correctly. You might still end up with a rejected car loan. Why? Well, maybe your timingwasn’t right in terms of performance. Here, we are not talking about the performance of the auto loan industry. Instead, perhaps your job status is not good enough for you to be qualified as a good candidate. For instance, when you are on a probation period, you will find it harder to get loans since your job status is not permanent.
- Poor credit score
Do you not pay your bills on time? Or maybe you already have a lot of debt on you that you don’t pay off like you are supposed to. Both these factors affect your credit score. Whenever you apply for an auto loan (or any loan for that matter), credit score is significant. It allows the lender to gauge whether you will pay back the mortgage on time. The more defaulted loans you have, the lower will be your credit score. This will lead to your car loan being rejected.
Before you decide to opt for a car loan, do your homework. Assess if you are qualified to get the loan, to begin with. If not, either improve your credit rating or get a better job. If neither is possible in the short-run, we will advise you to stay put for a bit rather than going through the hassle of applying for a loan only for it to be rejected.
About Michelle Joe: Michelle Joe is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences, and express herself through her blogs. You can find heron twitter: @michellejoe524