A Few Reasons Why Auto Loan Lenders Deny Applications
Bathed in a luscious red hue, you can’t keep your eyes off that dream car every time you drive past your local dealership. It’s too bad your poor credit score will most likely prevent you from obtaining an auto loan and purchasing it, however.
Unless, of course, you give our team at PA Auto Credit a call, where we can make your dream a reality.
Our Buy Here Pay Here program in Bucks County, PA, and the surrounding areas has made it easier for customers to receive their dream cars. We believe that everyone should be able to purchase a car. It doesn’t matter how good or bad a driver’s credit is either, we’re going to do everything in our power to make sure you get what you want. We strive to get you a low interest rate and the lowest possible down payment.
If you’ve ever been denied an application for a car loan, here are a few of the most common reasons why:
Poor Credit Score
Poor credit score is the No. 1 reason auto loan lenders deny an application. A low credit score is considered to be anything that is 620 or lower. Lenders that loan money assess risk and borrowers with poor credit scores are among the riskiest; thus, many of their applications are not approved.
Incomplete Loan Documents
When you apply for a loan, your creditors will ask for documentation to prove your income, financial stability, and general ability to pay back the money you borrow. Some of the documents that your creditor might require you to submit can include pay stubs, your credit report, or bank statements. If you’re self-employed, your lender might require that you submit your entire tax report to ensure that your income is consistent enough to continue paying back your loan until it has matured. If you don’t submit all of the documentation to your creditor when you apply for financing, don’t be surprised if your lender says they cannot offer you a loan.
If you’re unsure about all of the types of documentation that you’ll need to fully complete your application, don’t be afraid to talk with your lender before you submit your paperwork. Most lenders will be able to help guide you when it comes to collecting these documents, and in some cases, they may be able to provide an alternative for you (for example, accepting a utility bill as proof of your residence in lieu of a paycheck when you’re self-employed).
Too Much Outstanding Debt
If you have more debt, you’re statistically more likely to fail to pay back any additional loan you take out when compared to a borrower with less debt. If you already have a major loan out in your name, you’ll likely want to work on paying down some of this debt before you apply for additional financing.
Issues With Reported Income
The more money you earn, the more money that your lender will allow you to take out in a loan. However, your lender needs to see documentation of all of your funds and income. If your lender rejects your application for a problem with your income, that doesn’t necessarily mean that your lender thinks that you illegitimately acquired the money—you may simply need to provide additional documentation, especially if you’re self-employed or using a financial gift to pay for the down payment of your loan.
An absence of credit is yet another reason why applications might be denied, and you might need a cosigner with a solid credit score for your loan. However, there are ways to build up your credit, like purchasing a credit card or charge card and using it wisely.
If you wish to learn more about the Buy Here Pay Here program available in Trenton, NJ, and the surrounding areas, contact us online or give us a call today!