How to Improve your Chance of Car Loan Approval

How to Improve your Chance of Car Loan Approval

Posted on August 11, 2021

It is relatively straightforward to qualify for an auto loan but there’s no point taking it for granted. We should always approach a loan application with the view that it might be refused. That way, we do our utmost to present the best application we can. We asked our Rockton auto loans team to outline a few tips to help improve your chance of car loan approval. This is what they came up with.

Know your credit score

The vast majority of auto loan decisions are decided by your credit score. Knowing your score before you apply helps you assess affordability and whether you would qualify for the amount you’re looking for.

Check your credit score with TransUnion or Equifax.

Save for a down payment

Putting your own money down goes a long way to help improve your chance of car loan approval. When you’re risking your own money as well as theirs, lenders assess you as a lower risk as you’re less likely to want to lose your own money.

We recommend a down payment of between 10-20% of the car’s value.

Don’t empty your savings for the down payment

A large down payment is beneficial but you shouldn’t empty your savings pot to get it. If a lender sees you still have savings after paying a down payment, they will feel more confident that you have the means to repay the loan in full.

Having no savings leaves you exposed should anything happen. While it may not cause a lender to refuse an application, it may make them look very carefully at it.

Check your credit report for errors or omissions

Simple errors on your credit report can cause a lender to refuse an auto loan application. Sad but true. Even when it’s obviously an error and has no bearing on the application.

Check your credit report carefully to make sure it is 100% accurate. Anything less opens you up for refusal and nobody wants that!

Set an achievable budget

Be realistic about how much you can afford to borrow and stick to that. Lenders are very careful about lending too much to people who cannot afford it and will refuse Rockton auto loan applications that look too risky.

Use an auto loan calculator and prequalification to assess how much you can comfortably afford. Be honest and be realistic. If you’re not, the lender certainly will be!

Only apply for the loan you want

Auto loan preapproval and applications use a hard inquiry on your credit report. Too many of these and a lender will want to know why. Lenders appreciate that you want to shop around, but most people know to only apply for the loan you actually want as there are other research tools available.

Too many hard inquiries and your credit score dips too.

Work with auto loan experts

Working with Rockton auto loan experts can also improve your chances of being accepted. We can help you prepare the application so it shows you in the best light and advise on affordability and other parts of the loan process.

Plus, we have access to a wide pool of lenders willing to work with people from all backgrounds and situations.

Contact Unique Chrysler for help, advice and competitive Rockton car finance and leasing.

Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!