Applying for credit can be a daunting experience, especially when you consider the anxiety one feels of potentially being turned down. However, understanding the process can ease your worries.
WesBank has provided the following overview to help consumers navigate the steps involved in applying for vehicle finance. Taking account of these factors, it says, is likely “to enhance the chances of your application being approved”:
Why we assess your application
The NCA requires finance providers to ensure that consumers can afford the financial commitments they agree to. This means that when you apply for vehicle finance, your ability to manage the required credit repayments responsibly must be evaluated. This assessment focuses on two main criteria: your affordability level and your creditworthiness.
Affordability and creditworthiness
Affordability at its core, is about determining how much you can reasonably manage for new credit repayments. It’s closely tied to your discretionary income—the money you have left over after covering essential expenses. To boost your chances of approval, it’s crucial to have a clear understanding of your budget. Calculate your discretionary income carefully and consider all additional costs associated with owning a vehicle, such as insurance, fuel, and maintenance.
The WesBank App and website are invaluable tools in this regard, that allow you to check your affordability upfront, customise your finance terms, and even sign your vehicle contract—all in a matter of minutes. This proactive approach can save you time and help you set realistic expectations before you even step into a dealership.
Your creditworthiness is essentially a measure of how likely you are to repay the money you owe, based on your credit history. This means your credit score, which is not influenced by race or gender, plays a pivotal role in the approval process. Regularly review your credit report to ensure there are no errors and strive to maintain a good credit score by paying your bills on time and reducing outstanding debt.
Best practice for improving your approval chances
Save for a deposit: A larger deposit not only reduces your monthly repayments but also signals to lenders that you are financially responsible and committed to the purchase. If you have an existing vehicle, consider trading it in to lower the amount you need to finance.
Settle existing debt: Reducing your current financial obligations can significantly enhance your affordability level. Focus on paying off existing debt to improve your financial standing and increase your discretionary income.
Final thoughts
The WesBank App and online tools have revolutionised the vehicle finance landscape. Through these, the entire application process is streamlined, making it easy for anyone serious about securing vehicle finance.
Finance and Insurance (F&I) consultants at reputable dealerships can also provide invaluable insights and ensure you fully understand all aspects of the finance agreement. Furthermore, consulting with a financial advisor can help you manage your finances better and improve your credit health.
Engaging with approved and credible dealers, such as those affiliated with the National Automobile Dealers’ Association (NADA), can provide you with reliable information and offer robust aftersales support. These dealerships typically have F&I consultants who can tailor finance agreements to meet your specific needs.
Applying for vehicle finance doesn’t have to be stressful. By understanding the factors that affect your affordability and creditworthiness, and by utilising the tools and resources available to you, you can undertake the process with confidence.