Declined Car Loans Due To Affordability
One of the main factors, that is looked at when a car loan application is assessed for approval is the ability of the applicant to afford the repayments or additional finance. However there are some things you can do when you have declined car loans due to affordability.
It might seem straight forward, but a case can often be declined because the lender believes the customer will be unable to afford the repayments for the loan on top of their current commitments. There is an easy way to consider what your affordability level can be. It is to add up all of your monthly income and then deduct from it your outgoing payments. This includes rent or mortgage, existing loans and finance, any bad debts, living costs such as food and household bills. It should be quite simple to see if you have a great deal of surplus or are going to struggle to justify it!
If you already have a car on finance, then can you honestly say that you can commit to make further repayments or if you plan to swap one repayment for another then make sure you say so!
With a bad credit customer the lender will also pay close attention to this area due to having to comply with what is termed as ‘responsible lending’.
What to do next when have declined car loans due to affordability:
If your case has been declined due to affordability isn’t the end of the world. You should aim to pay off as much outstanding credit as you can before applying a second time. If you have several small weekly payments on agreements aim to pay more each month until they have been cleared. In case you have short term pay day loans ongoing it will be better if you look to stop this completely. Because it shows you are living beyond your means.
Once your agreements have been paid make sure you keep the confirmation that the account has been completed. You should also wait for at least 1 month for the records to update. We can look to run a fresh application for you and can also provide our lenders with proof the account has ceased.