What should I do if I was "approved" for a loan through the dealer, but then I got a letter saying I'm not approved?

I was approved for a loan through the dealership on my new car, and I even made a $5,000 down payment. A week later, I got a notice from a bank that my loan application has been denied and I'm not approved for the loan. What should I do?

Answer
“Unless a dealer has their own financing department (it appears as though that isn’t the case here), they send your loan application to numerous lenders.
While these lenders will approve strong applications, they may have borderline cases such as yours where they’re on the fence about approval.
However, the dealership usually gives them enough business that the lender will often approve these applications or overturn a denied application, simply because it’s beneficial for them to do so.
Therefore, you might want to call the dealership and ask them what’s going on with your loan application. You might need to reapply for financing or shop around on your own.
Or it could be nothing at all. Don’t panic until you have all the facts.”
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Eric Schad
Answered on Apr 27, 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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