When your auto loan gets rejected

Jun 14 2010 If you are one of those whose auto loan has just been rejected and you learn from the bank that the reason has got to do with your low credit score, then you slip into the subprime category of borrowers and while that sounds like a condemnation, it need not set you back and does not mean that you can never borrow in future. It means that your credit score has slipped below the acceptable level of 620 and you need to take steps to increase it in the days to come.

It also means that you need to look for a different kind of lender and not somebody who only deals with prime borrowers. These lenders specialise in lending to subprime borrowers and are willing to take on the risk on the basis of the much higher interest rates that they would be charging for the loan. If you still want that loan immediately, you have no choice but to pay the higher interest. Alternately, if you can wait, then you have to focus on how to improve your credit score so that your loan application does not get rejected again.

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