Why was my car loan application declined?

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, updated on September 21st, 2023       

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Car loan declined

If your car loan application has not been approved, then you probably have some unanswered questions. As lenders try to keep their lending criteria for themselves, they will avoid offering you specific reasons for their decision.

As a customer, it is crucial to know what went wrong and what you can do to improve future applications. The most important thing you need to keep in mind is that lenders will analyse your financial habits. Ultimately they need to feel comfortable that you will pay all of your repayment and on time.


The first thing that lenders will consider is your income. This will play a significant role in their decision to offer a formal approval. As a considerable amount of your income will go into the repayments, added to various bills and daily expenses, lenders will reject your application if this sum doesnt provide a montly surplus. Lenders also look at other debts, credit card bills and loans that you have. If banks consider that you will not be able to make the repayments based on your salary, your application will be rejected.

Credit History

Have you taken out a loan or rented property? Then you have a credit history, and lenders will also check this. A credit history includes current and previous loans for the past five years, past and present employers and any defaults or overdue accounts.  You do not need to have “excellent” credit history to get approved however, try not to have too many loan applications as this also negatively impacts your ability to borrow. 


Steady work is a big point on your application form. If you regularly change jobs or if you are still in a probation period, this does make securing finance more difficult. 

Residential Situation

Your residential position is also important. If you move around on a regular basis, it does affect your ability to borrow. Generally speaking, if you are renting through a real estate agent or are paying off your own mortgage, this puts you ion a great position to get approved as it shows serious stability and thats what lenders love.

Next Steps

At Savvy, we have many customers who have been previously declined when they first make contact with us. They may have been to a bank, credit union, another broker and have been turned down. Most companies don't have the expertise, skill, and access to the relevant lenders to help out customers that have an outside the box scenario. Enquire with us to speak with a specialist broker. Working with an expert in this field will give you the best chance of approval.

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