Rejected Car Loans: What Should You Do?
It can be really disappointing to have a car loan rejected. You may need the car for a new job, or you may simply have wanted the chance to take your family on some trips away at the weekend.
Try not to panic—You can manage the situation with a clear mind. If you have bad credit, there are bad credit car loans that may be right for you. The most important thing you can do is ask for help, understand the reasons for your rejected car loans and work with specialist lenders to figure out the best road ahead for you.
Why was your car loan rejected?
Your car loan application gets rejected for a number of reasons. These include:
- Your current credit rating. If you have a poor credit history, you’re likely to have a low credit score, which can affect your ability to borrow. There are plenty of options when it comes to bad credit car loans but knowing your credit score in advance of making any loan applications is really useful.
- Your age. Although some lenders are happy to lending to those under 21 or over 75, many people in these age groups find that their car loan applications are rejected. If you are between 18-21 you may simply not have had time to build up a credit rating, so bad credit car loans could be a good solution for you.
- Your employment situation. It can sometimes be difficult if you are unemployed, self-employed or work on a freelance basis to reassure lenders that you are able to make your car loan repayments each month.
- The type of vehicle you intend to buy. Often lenders will review the type of vehicle that you want to buy with your car loan application and make a decision to reject you on this basis. It may be that the value of the car is too high or simply that they do not see it as an appropriate choice for your circumstances.
What should you do next?
It is easy to look for solutions after understanding the reasons behind your car loan rejection.
It’s really important that you don’t keep applying blindly to loans (even if you’re panicking about getting the car that you really want). Multiple applications in a short space of time will stay on your credit history and raise alarm bells with future potential lenders.
On the other hand, you absolutely should not give up. There are lots of options available especially from companies providing bad credit car loans so take your time, do some research and find a way forward that works for you.
Here are a couple of steps you can take:
- You need to get hold of your credit report if you haven’t already seen it.
Check over it to ensure that there are no errors or mistakes on it which may have affected your car loan application.
- Try to repay any outstanding debts to increase your credit rating.
Always pay your loan repayments in full and on time.
- It can be helpful to wait before applying for your next car loan.
Wait until you have improved your credit rating. This can be done by paying off existing loans or by ensuring that you have been in a job for at least 3 months and can show lender evidence of a regular salary.
- Consider a bad credit car loan.
This is a really practical solution, which can open multiple doors for you. There are all sorts of bad credit car loans available to help you get back on your feet and behind that steering wheel.
Loans for People with Bad Credit understand how stressful it can be to have your car loan rejected. We believe that everyone deserves the chance to find the right lender for them and to have the opportunity to get out on the open road. We’ll do everything we can to work with you to help find a car loan that suits your personal and financial situation.
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