Sharing hopes for a new car only to get the loan rejected is the last thing one wants. This emerged as a surprise because you were rejected for the loan even after being good with finances. Most individuals remain confused about it while taking car loans or 24-hour loans in Ireland.
What we miss out on often is the usage of credit cards.
Are you a frequent credit card user?
Individuals use credit cards almost unconsciously for what it could lead to at a later stage. This negligence on their part becomes the center of attraction for the credit agencies.
Credit agencies grant loans based on the credit ratings of borrowers. Lenders effectively carry out this assessment to grant bad credit loans on instant decision in Ireland. The lower the credit score is, the less likely they are to lend the money you want. Even if they do, they lend it at a higher interest rate.
What can you do if your car finance application has been rejected? We will discuss the options you have, but let’s first discuss the reasons for the loan rejection.
5 Major Reasons for Car Loan Rejection
There are several reasons you have been refused car finance. Here are some of those:
1) Poor credit score
While you may secure most loans with bad or ok credit scores, some lenders are wary of lending funds for a new credit deal. If you have a poor credit history that reveals missed payments or if you have CCJ or IVA live, then these may also prevent you from getting credit.
2) Employment status
There are a couple of instances employment status could be an issue:
- If you are unemployed,
- If you are self-employed,
3) Age factor
While applying for car finance, lenders undergo multiple credit checks and other checks like age criteria. Yes, age is not just a number. Some providers might consider lending funds to 18-21 years of age, while others may have certain age limits. Thus, explore more options and find the conditions for which you qualify. Refrain from taking another loan if you are already on money loans in Ireland.
4) Driving license Type
If you are still on provisional finance, lenders might reject your loan application. You may not be approved for financing in the UK if you have an EU license rather than an Irish license.
- Previous rejections
If you have been refused 24-hour loans in Ireland in the past, chances are you may get it refused again. Thus, analyze your credit situation deeply before applying for the loan.
How To Deal with Being Refused Car Financing?
Thankfully, there are certain ways you can improve your chances of getting a new car or car finance. Search and speaking to different creditors is one of the best options. Here is something more you can do if you have been rejected for car finance.
1. Find out the cause of rejection
Ask your lender and analyze why your loan application was rejected. Analyze whether it can affect your capability of securing 24-hour loans in Ireland or not. You can check your report and ask them how it can be corrected.
2. Don’t apply with multiple lenders at a time
While seeking car finance, refrain from the instinct to apply for multiple lenders at a time. Doing so can make you appear desperate for money and may affect your loan application and credit report.
3. Review your financial commitments
Review your credit report and check whether you have existing credit agreements and how many bad credit loans on instant decision in Ireland you can settle early.
Paying these early can have a positive effect on your credit report. You will have fewer monthly commitments. Or if you are not using some credit cards from a good time, it is ideal for closing them. It is because lenders consider these unutilized credits available to you.
4. Break-free from a joint account that has a low credit score
Believe it or not, having a joint account with someone having a bad credit history and score can affect your chances of securing a car loan. Thus, consider stopping the joint account and choosing to opt out of these joint accounts.
5. Choose a cheaper car finance option
It is ideal for reviewing your finances and other money loans Ireland obligations before applying for car finance. Your repayment obligations may persuade you to lower your expectations and choose an affordable car.
It will help you borrow less money, and eventually, the repayments will also be less. There is a thousand great value used cars to choose from for less than £10,000 and under £8,000. Yes, you can!
Spend a little more time exploring the cheapest credit available for efficiently paying the repayments. Doing your homework for choosing the right car loan terms will not only help avoid the clutter and save thousands but reduce the thin line between filing and getting the loan approved as well.
6. Hire Purchase and Personal Contract Purchase (PCP)
A loan secured against a pricey possession like a car attracts lenders the most. Because if the borrower cannot make the payment, there is something tangible they could claim.
It is for this reason, borrowers switch to the safer option of Hire Purchase or Personal Contract Purchase (PCP). These are easier to get than a secure loan. You can arrange these even when you are applying to purchase the car as well. Apart from securing the credit easily, you can track down a car with good cash to purchase the car. Though low deposit options are available in these cases, interest rates would be higher, unlike bad credit loans on an instant decision in Ireland.
7. Get a guarantor
Another option to get car finance secured is by getting a guarantor. A guarantor is a person who takes the accountability to pay the amount if the borrower fails to or misses out on a few payments.
By nominating a guarantor on your car finance, the lender feels more confident about approving your car finance loan application. But before you do that, get the complete consent of your guarantor. The lender will check the guarantor’s credit score and standing as well before sanctioning the loan.
8. Present “a notice of correction” before the creditor
Notice of correction is one way to improve your chances of getting credit. This notice is a 200-word statement stating your reasons for defaulting previously and the situation that caused it.
If you encounter a situation like this in your life, contact your unpaid lender and set up an instalment plan. A reduction in the default balance and your willingness to pay back will help improve your credit standing before the lender. However, this may or may not work with other 24-hour loans in Ireland.
What is the minimum credit score for buying a car in Ireland?
Buying a car will require a different credit score from one moneylender to another. While a lower score will mean you will not get the best interest rates, it will not prevent you from getting finance.
Figures from Experian propose that the normal credit score for new vehicle finance is around 700 and around 650 for the used vehicle. 20% of vehicle advances are granted to individuals with credit ratings below 600 and 4% to individuals with scores below 500.
There are even moneylenders who spend significant time in getting advances for borrowers with helpless credit scores. Yet, such money arrangements mostly accompany a lot higher interest rates, just as fewer positive terms than the arrangements accessible to individuals who qualify with better credit scores. Thus, always analyze the options available in the market before making the right choice for getting money loans in Ireland at affordable rates.
Caleb works as a senior content writer at Financealoan for the past 3 years. He is a writing enthusiast and invests a good time in exploring and writing about financial trends. His keenness in exploring a topic to create a research-based piece is simply unmatched. He believes in including a texture of authenticity with real-time examples and facts.
Caleb’s blogs and articles reveal deep-seated knowledge and expertise. His educational qualification forms the base of his excellent command over the industry and Jargon. He is a postgraduate in Finance and is currently involved in exploring the world of the stock market.