Next Steps after Car Loan Rejection in Burlington: It's Not Over Yet
Next Steps after Car Loan Rejection in Burlington: It's Not Over Yet
Posted on September 27, 2022
If you've recently experienced car loan rejection in Burlington, your feeling may be hurt; after all, no one likes to be rejected.
While this may be an inconvenience, it can also be a blessing in disguise; by forcing you to take a closer look at your car loan options, you should be able to find a better deal.
No isn't Really No with Car Loan Rejection in Burlington
If you had to deal with car loan rejection in Burlington from a single lender, it doesn't mean you are out of options.
On the contrary, there is a multitude of car loan providers in Canada that should be able to meet your needs, but you first need to understand why your loan application could be declined in the first place.
All Lenders are Different
Each car loan provider has loan underwriting criteria they are looking for; this is the lender's targeted audience or preferred customer profile.
If the customer meets all of the requirements listed by the lender, the loan should be approved, but when it comes to securing financing, nothing is set in stone.
You could meet all of the requirements but the decision to approve a loan or not rests solely with the lender.
Credit Score is Usually the Main Suspect
The main suspect or reason why your car loan application would be declined in Burlington is your credit score did not reach the minimum threshold set by the lender.
During the good old days prior to the pandemic, if your credit score was over 600, you would have no problem getting approved for a competitive car loan.
However, now that the Bank of Canada has made it more expensive to secure capital, your credit score will need to be over 620 if you want to get a decent car loan.
When was the last time you reviewed your credit score? If it has been more than a month, you should take a look.
Credit scores change monthly, and if you don't stay on top of it, you could find yourself in a situation where you need credit, and your score is not high enough to qualify.
Inconsistent or Difficult to Prove Income
This is the second possible reason why your car loan would be rejected. This is particularly true for entrepreneurs who work in a primarily cash business like delivery drivers and hairstylists.
You will need to pay taxes on this income and have your income tax assessment available for prospective lenders to prove your income is legitimate.
Income tax assessment letter. Source: http://www.jimandlisa.ca/income-tax-notice-of-assessment.html
Where to Look Next
You should contact a local car dealership if you had a car loan application rejected; the dealership is able to shop around and find you a lender that is going to give you a fair shake.
Each dealership has a different network of lenders they work with, so you shouldn't feel like you don't have options.
If you need a car loan right away Click here to get pre-approved, we'd love to help!