reasons why a car loan rejected will and how you can still get a car loan.
The important thing in a nutshell
Why was my credit application rejected?
There are two typical reasons for the rejection of a credit request: either were requirements for the granting of a loan is not fulfilled, or the bank is not of the credit score of the applicant convincing.
1. Unfulfilled prerequisites
The banks have internal acceptance guidelines on the one hand and must comply with legally prescribed guidelines on the other. This results in list of acceptance criteria, which every applicant must meet. Due to the bank’s own guidelines, the requirements may vary from bank to bank, but the requirements are usually similar or the same. This is where z.B. Age and employment relationship play a role.
Banks often require the following requirements:
- Age of majority
- First residence in germany
- Account in germany
- Verifiable monthly income
2. Creditworthiness is not sufficient
The second reason is lack of creditworthiness. In the case of creditworthiness (also credit rating called) it does not depend solely on the monthly income. Rather, the issue is twofold:
- The ratio of income to the credit amount
- The applicant’s prospective willingness to pay the loan installments on time and in full
In the case of the income-to-credit-amount ratio, it is a matter of ensuring that the income is sufficient to pay the pay monthly credit installments without problems. With a low income you can get a car loan with a low credit amount without any problems. With a high credit amount, however, there may be problems. A reason for refusal of the credit can therefore be a too high chosen credit amount.
How is the creditworthiness checked??
When asked how likely it is that the applicant will pay his monthly installments as agreed, the bank checks the payment history of the applicant in the past. In doing so, the bank first takes a look at its own records if the applicant is already a customer of the bank: were the installments paid on time for a previous installment loan (not only car loans)? Next, the bank is getting to grips with the schufa in connection. Here it asks the score of the applicant. The schufa score is a single number that indicates how well or how poorly the applicant has recently paid their bills to banks, retailers, online merchants, etc. Paid. When the number was high, the behavior was good, when the number was low, it was rather bad.
Credit inquiries and the schufa score
A credit application and its rejection are also transmitted to schufa and can worsen the score. So apply for loans primarily when you need them a good chance of approval HAVE.
If the bank believes, based on the information available, that the applicant can repay the financing in full, the car loan is approved. If not, there is a rejection.