When you go to buy a car, suppose you’ve selected your favorite, getting the features you wanted, the color you wanted, and also at the price that is within your budget. Everything is so smooth and you’re getting the car you dreamed of! But now what problem you’re facing is payment. This is obvious that no one will buy a car in cash until and unless they’ve enough money to spend or have huge savings. On the other hand, most people choose the option of car finance.

Now if you’ve decided to finance a car, sometimes you’ll find a problem in that the application for car finance has been declined. This can be a painful experience if your application has been rejected. A declined car finance application does not mean that you can’t get your vehicle finance in the future but it gives you an opportunity to improve you’re your financial position.

But here you need to know what’s the reason behind the car loans getting rejected and understanding the concept can help you get your car financed without any difficulties. 

Reason Why the car Finance Application Gets Declined?

1. One of the primary reasons is unhealthy credit and cibil score that is below 600 and which leads to fewer chances of getting a car loan.  
2. Suppose you’ve borrowed so many loans, no matter if you’ve cleared all or failed to do that, the bank will never approve your loan as they count this kind of person as a credit-hungry individual.
3. The reason behind declined car finance application can also be, that you’re underemployed. Due to no regular income, a lender can refuse to finance a car but if you prove that you have a regular source of income, there can be a chance of getting it approved. But, generally, it all depends upon the case. On the other hand, it is not mandatory that If you’re employed and necessarily getting approved for car finance, some lenders may not, until and unless you show your earnings over a three period as they want to see the evidence that you can afford it.
4. Before your bad or good credit score what matters is your age.  If you turn 18 you can apply for it and hope for approval but in this case, also due to your lack of credit score or no regular employment, there are fewer chances of the approved application for car finance. Not only young age but also lenders may not approve older people as they are concerned about their ability to make the repayments.
5. In some cases, an application may be declined due to fraud or other types of deception.
6. Some lenders may require collateral, such as a home or other assets, in order to approve a car finance application. If you don’t have any collateral, you may be declined for the car finance application.

 If you have been declined for car finance. It’s important to carefully review the reason given by the lender. You may be able to address the issue and reapply, or you may need to explore other options for financing your car purchase.    

Steps you can take to decrease the chances of your car finance application being declined:

1. Be prepared to provide proof to lenders that you have a stable income which will make them sure and trust you, that you can support the monthly loan payments.
2. By making a low credit score can make your loan secure even if you have a low credit score. A down payment shows the lender that you are invested in the loan and can help reduce the overall cost of the loan.
3. To increase the chances of an approved car finance application, It’s important to be truthful on your application to increase your chances of being approved.