1. No capacity
No capacity means that there is insufficient income or affordability to support current expenses in addition to this new loan. When assessing an application for finance, the first thing lenders look at is whether you are able to service all your current expenses as well as the loan you’re applying for. Due to strict regulations, there are minimum expenses that all lenders in Australia must use when assessing a loan. Therefore, even if you think you will be able to make the repayments, it is possible that it still doesn’t meet the minimum capacity guidelines.
What you can do
If you have a partner or spouse who you live with, it might be possible to see if they will be a co-borrower on the loan with you. This may help increase the available capacity by splitting living expenses. Alternatively, you might be able to consider a less expensive vehicle. This will bring the repayments down and it is possible that the reduced repayments may change the capacity outcome. Speak to a Loans For U Finance Consultant today on 1800 538 287 for more information.
2. Poor credit
The next common reason car loans get rejected is due to poor credit. Before applying for any type of finance, it is good practice to get a copy of your credit report and know what’s on there. Check your credit report regularly to make sure it is up to date. You can get a free copy of your Equifax Credit Report once per year, make sure there isn’t anything on there that doesn’t look right and ensure you keep your details up to date with all your credit providers.
What you can do
The best way to improve your credit score is to make sure you stay on top of all your bills, credit cards and utility bills. Missed or late payments or defaults may get listed on your credit report and hinder your efforts to get finance.
Loans For U has access to a number of lenders who can provide car finance with bad credit or prior bankruptcy. Simply speak to one of our friendly consultants on 1800 538 287 for more information and to discuss your specific circumstances.
3. Incorrect information
It is extremely important to ensure that all information and documentation you provide for your finance application is true and correct so that the lender can make an accurate assessment of your circumstances. If you provide incorrect information or don’t provide any supporting documentation when requested to, it can negatively impact your application for finance. If the information you provide doesn’t match the documentation you provide, it can also negatively affect the outcome of your finance application.
What you can do
Ensure you stay in regular contact with your Finance Consultant and provide any relevant documentation requested in a timely manner. Before you apply, you can start getting the relevant documentation together to speed up the application process. Documentation required for finance approval will vary depending on your employment status and the type of asset you’re looking to finance.
For more information on what documentation you will need to submit, see details below.
- Identification
Driver’s Licence and Medicare Card (clear and legible) - Proof of Income
(See below for details)
Proof of Income Documents
- Employed (Full time or Part time)
2 x Most Recent Payslips - Employed (Casual)
2 x Most Recent Payslips - Self-employed
Most Recent Tax Return - Centrelink
Most Recent Income Statement
Loans For U are here to help
Here at Loans For U, our friendly Finance Consultants are always happy to help. Best of all, it’s always obligation-free, so you’re never under any pressure to proceed with finance. Whether you have a question or need more information, simply give us a call on 1800 538 287 to discuss your individual circumstances.
