Options to consider after being Turned down for a Car Loan

Rejection is never pleasant and if you have been rejected in your application for a new car loan then most probably you failed to do your homework in advance of applying. You should give consideration to the likelihood of why you were rejected, but most likely it will come down to the fact you may not have been seen as a good risk. In that case acquiring the car loan at all may have been a risk you couldn’t afford to take.

If you are still determined to buy a new car then you should plan in advance before applying for another car loan. Find out what your credit score is as it may well need improving. A low credit score will reduce your options and generally only qualify you for a loan with the highest interest rates so if this is the case you should work to improve your score. There are plenty of options to obtain an auto loan with bad credit from bad credit lenders but you will be paying a high rate to do so and should ideally wait until your financial health has improved.

The more you can pay as a down payment the better your chances are of obtaining finance. Aim to save up a substantial down payment. Consider exactly how much you need to borrow and don’t include expensive extras in the amount you borrow. You can obtain a pre approved auto loan on line before you start shopping for your new car, and take advantage of on line tools which help you to work out the monthly figures you will be looking at and exactly how much the car would cost with the interest added to the purchase price.

You could also consider simply not buying a new car but look at the used car market which will cost you less in the long run. If the car you purchase costs less in the first place there is less chance of overextending yourself and struggling to pay back the loan. You may have more chance of obtaining a loan if you have a co-signer willing to stand as guarantor for your loan.

At the end of the day if you still want to proceed with a car loan for a new car then there are a host of bad credit lenders who can find you a loan at high interest rates. There are many bad credit lenders who specialize in financing for those turned down by traditional lenders. It is an expensive route to take and high risk, as if you don’t maintain the payments you will be liable to have the car repossessed which will have a further negative affect on your credit rating.

It really is the most sensible thing to do to improve your credit score first and take the time to save up for a sizeable down payment. You can then pre-apply for a car loan knowing exactly what your finance options are, and it will be worth the wait to obtain a lower interest rate. In the meantime bicycles are becoming an increasingly popular mode of transport.