Car Loan Denial: What to Do Next
The struggle to secure a car loan is becoming increasingly common, with rejection rates on the rise. However, a car salesman on TikTok is offering valuable advice to those who have been denied a car loan.
Shauon Rogers, known as @shauonsellscars on TikTok, shared a video on May 12 that has since garnered over 10,800 views. In the video, he emphasizes the importance of having proper proof of income when applying for a car loan. According to Rogers, a pay stub, bank statement, or W2 from the previous tax year are essential documents to provide adequate proof of income.
Rogers also highlights that credit score is not the only factor considered by lenders when approving car loans. He suggests that having an established credit score is crucial, and offers tips on how to improve credit, such as opening a credit card, getting a secured credit card, or opening a credit-builder account.
Additionally, Rogers advises potential car buyers to be prepared to put down a down payment of 20% when purchasing a vehicle. This can help increase the chances of loan approval.
The video comes at a time when getting a car loan is becoming increasingly difficult. NerdWallet reported that the 12-month rejection rate for auto loans reached 14.2% in June, the highest since 2013. Reasons for loan denial can include a short or inconsistent work history, high debt-to-income ratio, or incorrect information on the application.
Despite the challenges, there are options available for those struggling to qualify for a car loan. Nonprofit organizations in certain areas offer car-buying programs with low-interest loans, focusing on long-term financial stability. Additionally, having a co-signer or adding a co-signer to a loan can help improve the chances of approval.
Overall, Rogers’ advice serves as a valuable resource for those navigating the car-buying process, offering practical tips to increase the likelihood of securing a car loan.
