Can a lender actually cancel a car loan?

My friend was telling me that his lender canceled his car loan, but I didn't really understand the details. Plus, he's been known to exaggerate every now and then. Can a lender actually cancel your car loan?

Answer
If your friend had his car loan canceled, it’s likely that he was given a spot delivery and the financing didn’t go through. A spot delivery occurs when a car dealer hands over the keys to the buyer without getting full approval from a lender first.
The car dealership is an intermediary between the borrower and the lender. In most cases, dealers assume that the financing will go through no matter what. If the financing isn’t approved, the dealer has two options:
  • Find another lender who can provide financing
  • Ask the buyer (your friend) to return the car
If you get your loan directly from a lender and not through a dealership, you shouldn’t worry about having your car loan canceled. The only thing you may have to worry about is getting the best rate on your car insurance. That’s when you should use the Jerry app to compare insurance quotes from over 50 companies.
Eric Schad
Answered on Nov 18, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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