written by Ali Limton
When applying for car financing, it is important that you do your research well before you approach the financial institution of choice. It is advisable that you compare different products being offered by banks and other financial institutions.
At the same time you should also be aware of the credit terms that are being offered, your own credit history, relationship with an existing bank/institution etc.
In case you didn’t consider all these aspects before applying for your car loan and got rejected, you should take a more educated decision when you reapply. There are 3 key points that you need to note before you do that though:
Understand why you got rejected?
Most people make the mistake of reapplying for the loan without really understanding why they were rejected in the first place.
- You can’t just follow the philosophy of trying and trying again till you succeed.
- Ask your relationship manager why the application was rejected by the bank
- Find out what steps should you take to improve your application
For example, your loan may be rejected on the basis of your credit score. In that case you should know specific measure that you need to take in order to improve the same before you can send in your request again.
If you didn’t give it much thought when applying for financing the first time, you should definitely compare banks and their offerings before reapplying for the second time.
- While your personal information may be open data for any potential lender, you need to know exactly which institution can offer you the best value.
- In addition to this, different banks may have a different set of criteria on the basis of which they will evaluate your loan application.
You should therefore be well-informed of these so that you may consider more viable options when you don’t qualify the first time. You may even end up getting a better bargain from an alternate bank which will benefit you in the longer run.
Explore an existing relationship
If you have an existing relationship with a bank, it is always better to explore financing options with them only. You will get approached by a number of banks offering more or less the same product but if you have a good relationship with your bank, you should definitely talk to them first.
Compare the deals that are on the table with what a competitor might be offering and then take the decision based on convenience, rates, terms & conditions etc.
Get things sorted and go for it!
When you’ve identified the best deal available and understood exactly what the institution of choice requires in terms of application criteria, you should necessary steps to ensure you’ve covered all key aspects before reapplying for the loan.
This way you will end up saving a lot of time, effort and energy while at the same time get the best suited deal that will help you in the long run.