For a lot of people, a car finance application is the best way to get a vehicle. That’s because, through a loan or finance, you can pay it back in small amounts, which suits most people’s budget.
However, when your application is rejected, you will ask yourself: why? There are plenty of reasons for rejection like your income or your job stability. Luckily, there are other ways for you to get a car, namely through a car lease. But before you apply for one, find out why your application was rejected.
There are plenty of reasons applications are declined. Here are some of the most common reasons lenders are closing their doors at your face. Understand them and avoid them for your next use.
Lenders will take a look at your current income and base how much they can lend you based on that. Now, if you don’t have a regular income, then the lenders will be hesitant to approve your car finance application. That’s because they will want you to pay.
If the lender sees that you don’t have a regular source of income, they will reject your application. So, if you have an irregular income, or if your income may not be enough, this could be the reason your car loan application was rejected.
Aside from your income, your current job plays a role as well. You should be with the company for at least five to six months.
Lenders are more willing to approve applications if you have a stable place of employment. It reassures them that you will have the means to pay back the loan, and a dedication for a job that can help your living expenses.
Lastly, credit history. If you have a record of taking out loans and not paying them, or if you have missed payments on your credit cards, then your car finance application is as good as rejected.
That’s because if you have not been able to pay your past loans and bills, then this will show that you won’t be able to pay back the amount you are applying for.
To summarise, fixing your credit and your finances before getting a car finance application can increase your chances of approval. Now, if you don’t have the time to repair your credit as you wish, then there’s no need to worry. You may also find our blog on car finance application useful when applying as well.
Try applying for car leasing in Australia. With this, you can kill two birds with one stone: rebuild your credit and have a car to drive. Alpha Finance can help you get the best deal on car finance where you can decide how often to pay and for how much.
