4 Reasons Why You Can’t Get a Car Loan… And How to Fix Them

So your old car is dead or dying, and you’re stressed because you don’t know if you’ll be able to get a loan for a new car. Here are the top 4 things that could hold you back from getting approved for an auto loan, and how to fix them.


1. Bad Credit.

If you’ve had some bad luck or just made a few financial mistakes, lenders might not want to take the chance on you, even if you’ve got yourself on solid ground again and are perfectly responsible. They usually don’t see what you’re capable of, just your credit score.

The Fix: The good news is that there are a few things you can do to help yourself if you are trying to get a car loan with bad credit. The easiest thing to do is to find a lender who specializes in bad credit situations. Of course, we can help you with that – you can apply online in about 60 seconds and get a call from one of our special finance advisors in your area who can work with you to find the right auto loan for your credit situation.

If your credit is particularly bad, you can try to get a cosigner with good credit to sign on to the loan with you – this means less risk for lenders, so they’re usually more accommodating.

Finally, if you are not in an emergency and don’t need a car immediately, take some time to pay off as many outstanding debts as you can to increase your credit score. Not only could this make it easier to get a loan, it could also lower your interest rate, which will save you money over the life of the loan.


2. No Credit.

Having no credit is the classic Catch 22: you can’t get a car loan with no credit, but you can’t build credit without a loan. Basically, lenders have no idea how you’ll perform on the loan – they would be taking a risk, and they don’t like taking risks.

The Fix: If you have no credit, you can use some of the fixes as if you had bad credit. Yes, there are lenders who will help the right people get a car loan with no credit history, and yes, you can apply for a no credit car loan with us. It’s fast and simple, and since we have a network of auto loan advisors, you will have access to more than just one lender, which improves your chances.

You could also look for a cosigner who will share the risk, which makes lenders happy. If you have the time, you could also build your credit through other means, like smart use of credit cards (unsecured cards are not hard to get – you just need to deposit money equal to the limit on your card).

3. Upside Down on Your Current Vehicle.

If you already have a car loan but you owe more than the car is worth, you’re upside down, and that could keep you from getting a loan for another automobile. Getting out from under that can be difficult but not impossible.

The Fix: Waiting until your car is paid off (or paying it all off in one lump) would probably be ideal, but if your current car is no longer operational, or if it requires some pretty expensive repairs, you might not have much of a choice.
Some dealers will take your car in trade and roll the difference into a new car loan. The downside is that your new car payment will higher than you could normally expect; the upside is that you will have a set of wheels that can actually get you somewhere


4. No Down Payment.

With good to great credit and high income, this might never be a problem. But if your credit isn’t great or if your income isn’t what lenders like to see, they might not be willing to lend you what you need to buy the car you want. Also, lenders like to see that a buyer has some investment in their purchase before giving approval for a car loan.

The Fix: Besides the obvious – waiting until you can save enough for a down payment – the best solution is to make sure you have a large pool of lenders to select from. Not all lenders make car loans based on the same criteria, so in situations where your approval is an iffy proposition, the more options you have, the better.

Of course, there are other reasons you might not be able to get a car loan, too, but getting approved is a lot easier today than it was just a few years ago. Lending standards have eased, and our nationwide network of loan advisors can help you get approved in as little as 48 hours. Take just a minute to apply today!