For many people, owning a car is not just a nice thing to have, it's a necessity. Searching for the right deal can be tough and car finance can be confusing. For a lot of us, it's one of the most expensive asset purchases we will ever have, second only to a mortgage. For this reason, it's important to shop around to make sure you get the best possible finance deal.Car finance isn't always straight forward and getting the right loan can be difficult for some. Car loan finance applications are often rejected, leaving the applicant confused and disappointed. There are many reasons why a car loan can be rejected, and below are a few common reasons:

1. Bad Credit History

 

 


Your credit report determines your credit worthiness and if it's less than perfect, your car loan application could be declined. Your can get a copy of your credit file by going to www.mycreditfile.com.au. It's important to make sure your credit report does not have any errors on it before you apply for a loan. If you do find an error you should immediately notify the credit reporting agency, Veda Advantage. Reports of late payments and open accounts can affect your ability to get a good loan. Please note though, even if you have credit defaults, there are still ways of obtaining car finance depending on where you apply, how much you want to borrow and the amount of money you owe.

2. Low Income


Your income can also affect your ability to get a car loan. It's important to note that if your income is too low, you may not qualify for a car loan. In this case, if you desperately need a vehicle, you could ask a trusted friend, partner or family member to be a co-borrower on the loan to increase the chance of obtaining the loan. If you do decide to do this it's important that all the parties know where they stand in terms of their personal liability, and accept the potential consequences.

3. Discharged Bankrupt


For many people suffering financial distress, becoming bankrupt is the only option. What a lot of people don't realise is that once the term of the bankruptcy ends, putting the past behind you and finding credit can still be a challenge. Rebuilding your credit reputation can be tough but if you do obtain a car loan, and manage it well, it would represent a huge step towards rebuilding your financial health. Getting a loan in these special circumstances requires a certain amount of expertise, so it's important to approach a broker who specialises in this sort of lending.

4. Applying For Credit Too Often


Credit providers will always refer to your credit file before approving a loan. One thing that may hinder a successful application might be numerous credit applications in a short period of time. If you apply numerous times for a loan within a short period of time, credit providers will think you are shopping for credit and will more than likely decline your credit application. For this reason, before you make several applications, its important to know what's on your credit file and do some research into where your loan has the best chance of approval at the interest rate and conditions your most comfortable with. Failing this, you should consider seeking the opinion of a broker that specialises in non-conforming car loans.

5. Pensioners

 

 


Being a single parent or and aged pensioner does not necessarily prevent you from applying for car finance. Before applying for a loan, you should ask an experienced broker where to place the loan (i.e. which credit provider) so that it stands the best chance of success in light of your special circumstances.

By following these guidelines, you could reduce the risk of disappointment when it comes to getting a loan for the car of your dreams, and with a little homework, you could be driving away in your new car sooner rather than later.