Applicants who are marked as a high-debt ratio individual are often rejected when they apply for a car loan. Most lenders frown on the applications of these types of individuals who are considered high-risk and more likely to default on their debt payment.
Commonly, lenders look at specific ratios in order to determine whether to advance credit on a car loan. When these ratios are higher than their thresholds, lenders will decline a car loan application.
Here are some tips on how to apply for a car loan even if you are a high-debt ratio individual.
Car Financiers Use a Wide Approval Criteria
According to Toronto, Canada-based auto lender TREND Financial, there is another approach when looking at an individual’s application for a car loan. One is to review the individual's total financial picture which avoids an automatic application decline.
Car loans can also be customized loans for everyone including those with high debt service ratios and can do so because it uses wide approval criteria to assess a car loan application. This means that if a loan applicant is weak in one area, such as with high debt ratios, other factors can make up for a successful car loan approval.
For car loans to those with existing high debt ratios, the company looks at the following financial qualifications including but not limited to, provision of a signed employment contract from an employer showing the person’s salary, employment verification contacts, a housing lease/rental agreement or mortgage or proof from an employer showing that the employer is providing housing, and more.
According to Eric Kaplan, COO of TREND Financial, “Certain individuals don’t fit within traditional lenders requirements in being outside qualification thresholds, regardless of their credit strength and general stability.”
This Financing Company Assesses Applications Differently
“This very limited view of a person's financial position without anything more, means that the person is ineligible for a car loan. At TREND Financial we take a different approach and look at the whole individual, not being bound only to specific ratios, as an alternative to traditional lenders,” he added.
Article Created: 2013-10-18
Article Updated: 2013-11-13
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