Rene May 22, 2018 No Comments

One of the most disappointing aspects of financing is that while you may consider yourself a suitable candidate for a loan, banks and other financiers don’t always see it that way themselves. Even more frustrating, when this happens you’re rarely afforded any sort of detailed insight or knowledge as to why your application for car financing was rejected.

Although you may be keen to move on and look into other avenues of financing, you shouldn’t disregard the reasons that may have contributed to a lender not having faith in your ability to pay back the loan on time. Here are some of the more common areas of concern that you should consider before you apply for your next car loan.

Your Employment Status

Financiers often look more favourably upon those who are not only working in a full-time capacity, but those who have a steady history of employment. If you are one to chop and change between companies, have gone some period of time without employment between jobs, or are currently unemployed, lenders will have some concerns about your ability to make repayments. Similarly, if you have just recently started a job, the fact that you are currently in a probationary period could work against you.


Income plus Other Assets and Debts

Perhaps the most prominent consideration for a financier is your current level of income. The fact that your income is sufficient to meet repayments is not enough. Lenders will want to see a buffer that provides coverage for any unforseen expenses, on top of your other debts and obligations in the form of bills, credit cards, car expenses, tax liabilities, and any other loans. A financier may also take a look at other assets under your possession – either as a means to understanding what guarantees or security you could provide, or as a picture of your broader ‘wealth’.

Credit Score

Your Credit Score, which is a picture of your credit history, will be considered thoroughly by a financier when you apply for a loan. This summary will provide lenders a snapshot of any existing and/or prior loans that you have held, including your repayment history. If they see signs that suggest you have a habit of falling into arrears, you are more likely to be rejected on your loan. Furthermore, evidence of multiple loan applications – whether approved or not – will diminish your standing as an individual on sound financial ground.


Other Unstable Patterns

Lenders will also look for signs that suggest you may lead a more volatile or unstable lifestyle. For example, if you have regularly moved house, or been party to a rental agreement through non-official sources (e.g. you are not a party listed on a lease), lenders will be conscious that you may be a more risky candidate to fulfil your obligations under the loan given a lack of stability.


The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.