Several reasons can encourage a bank or a credit company to refuse a car loan. However, the rejected private individual can ask for explanations, and try again.
Reasons for refusing a car loan
Any financial institution is entitled to issue a car loan refusal to an individual wishing to take out a loan to finance the purchase of a car. Here are the situations that motivate a refusal from the bank, the broker, or the credit company:
- registration in the National Payment Incident File (FICP) centralized by the Cream bank
- a debt ratio higher than 33% of its budget;
- insufficient income;
- an unstable professional situation;
- a context of multiplication of consumer credits.
Understanding the refusal of a car loan
In France, no law obliges a financial organization to put forward the reasons which led it to decide to refuse a car loan. However, it is entirely legal for the rejected private individual to be able to request the reasons for refusing the car loan in writing from their financial advisor. The banking establishment must then transmit to the requester any comments recorded in their file, or let them know if their car loan request has been subject to a rating process. It is then possible for him to have information corrected, or to object to his credit organization keeping some of it.
Auto Credit Refusal: Remedies
There are remedies following the refusal of auto financing. Thus, if the applicant for a car loan considers, with supporting documentation, that all of its resources and expenses have not been estimated at its fair value, or if it has other elements of information to be brought to the attention of his financial institution, he has the option of requesting a review of his file. To do this, he must contact the consumer or customer service department of the financial institution that issued him a car loan refusal.