times not to apply for a car loan

6 times not to apply for a car loan

Sometimes in life timing is everything! If you’re looking for a car loan, here’s 6 times it can be best to wait.

When your recent bank statements aren’t too flash

Generally, as part of any finance application you’ll be asked to supply your last 90 days bank statements. Lenders are looking for multiple missed payments or unarranged overdrafts, which suggest you might not be able to make loan repayments. These reduce your chances of getting the go-ahead on a loan.

Recent gambling transactions

The odd sports bet or the occasional trip to the casino won’t tank your chances of car loan approval, but anything regular or significant will. For lenders, it’s not about moral judgement of your spending, it’s about assessing your ability to pay back a loan. If you’re gambling on the regular, especially if you can’t afford it or are using finance to fund it, this will be a red flag for lenders.

When you’re new to your job

Scored yourself a new gig? Congrats! But you generally need to be out of trial or probation period to get your car loan across the line. As soon as you get the green light from your new employment, you can jump online to apply for your new ride. 

Out of employment

Here at The Lending People we have some of the most flexible lending criteria in the country, but as responsible lenders we also need to ensure you can afford the repayments. At a minimum you need to be employed part-time. We generally find that customers with WINZ or IRD as a primary income struggle to meet affordability requirements. However if you receive WINZ or IRD as well as part-time or full-time work, we encourage you to apply.

 Recent payday loans

Payday loans are easy to get, but they can very quickly ruin your chances of any loan approval. Payday loans are a sign of unaffordability, and can quickly send you into spiraling debt – avoid them like the plague! 

When you’ve got the cash!

If you’ve got the cash to pay for a suitable vehicle, consider skipping the car loan all together! You’ll save in interest, and it will free up your income if you need a personal loan or other finance in the future.