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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?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
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.View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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