Car Finance

Car Loans Australia: Basic Rejection Reasons and How to Counter Them

Having a car and being able to go wherever you want to go is one of life’s greatest joys. There is nothing quite like taking a leisurely drive to the beach or the park on a weekend, with your loved ones in tow. However, before you can realize that dream of yours, you first need to acquire a car. And unless you have thousands of dollars saved up in the bank, enough to purchase a brand new car in full, you will need to first apply for a car loan!

The car loan process in Australia is naturally a simple one, with a high approval rate providing all requirements are met. However, it would be wise to know that there are several reasons why you may be rejected. Knowing about these reasons beforehand will help you be better prepared for what to expect. Some common reasons include:

Rejection #1: You are deemed too young and do not meet the age requirement when applying for a car loan
Solution: Most, if not all, Australian car loan providers made it a rule for car loan applicants to be at least 18 years old and above

Rejection #2: You have no credit history
Solution: Enlist the help of a trusted guarantor

Rejection #3: Your credit history is less than perfect
Solution: Before submitting a copy of your credit history, do CHECK to see if there any bad marks, and if they are justified. If they shouldn’t be there, rectify it immediately to facilitate the car loan process

Rejection #4: You already have too many current debts to deal with
Solution: Lenders will be naturally hesitant in lending you money if you think you cannot deal with your current debts, what more if you were to add a new car loan to your list of loans. You may try to consolidate your loans with a debt consolidator, or clear some loans before applying

Rejection #5: You have financial issues that cannot be resolved immediately
Solution: Seek out an unsecured loan provider and see if you are able to get your car loan approved. You may not need to put up collateral (hence the name “unsecured loan”) but you will need to pay higher interest rates

Car loans in Australia naturally take between a few hours to a matter of weeks depending on the case. There are even online car loan providers that approve loans on the very day a borrower applies! The general rule is to prepare all the necessary details so that the loan approval process will be smooth.