What should I do if I get denied a loan from my bank?

I want to get a car loan and I already have a relationship with U.S. Bank. The car I want to purchase is $30,000. I make $80,000 a year and my credit score is 784. However, I was shocked when U.S. Bank denied my loan due to my limited credit history. My question is should I go to another bank, or should I go directly to the dealer to get the loan?

Answer
“Sorry to hear you were declined for your car loan, but don’t stress. You have several other options. But before you do that, understanding why you may have been rejected is important. You say that it’s because of limited credit history, but is that the reason they quoted you?
If you indeed got denied for limited credit history, your chance to get approved elsewhere is significantly diminished. Instead of continuously trying to seek a loan, you may want to open up a credit card or take on some other type of debt to build your credit score.
The other side of this loan looks at your necessity for a car. Are you without transportation? Or do you just want to upgrade? If the necessity of transportation is part of the issue, then you may still want to apply at other places. Dealerships are often more flexible with their lending than banks and may offer rates as low as 0% financing for new cars. However, financing directly through a bank may help you avoid extra fees sometimes charged by dealers, as well as get you a lower interest rate (at least when dealers aren’t running promotional APRs).
The best plan of action is to apply at both dealers and banks or other lenders as much as you can. Credit bureaus allow you to shop rates for a 14-day period and it only counts as a sole hard inquiry. This means that your credit might take a small hit (five to 10 points), but you won’t have tons of hard inquiries at once, which would decimate your credit.
If you want to get a loan, but you’re still having trouble, you may also want to consider a larger down payment. A larger down payment lessens the amount of money you need to borrow, which increases your chances of getting a loan.
Hopefully, this will get you approved for a car loan. But don’t forget about car insurance! Most lenders will require full coverage car insurance per the stipulations of the loan. Just as you would with your car loan, shopping around for your car insurance can save you money.
That’s where the free Jerry app comes in. Sign up in less than a minute to compare quotes from dozens of reputable car insurance dealers and get the best deals delivered to your phone.”
avatar
Eric Schad
Answered on Aug 20, 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.
thumb-up

Did this answer help you?

Ask us a question by email and we will respond within a few days.
thumb-up

Have a different question?

You can meet us at our office and discuss the details of your question.