The chances are high that you’ll need financing if you have your sights set on a Tesla model. Therefore, you’ll need to know the best practices to maximize the likelihood of loan approval.
Alternatively, you can learn the worst techniques and do the opposite of those.
These are 11 ways to get disproved or rejected for a Telsa loan.
1. Have a poor credit score.
Maintaining a poor FICO or credit score is the quickest way to get disproved or rejected for a Tesla loan.
You’ll need to ensure that it comes nowhere close to a 720 score, which is what most Tesla lenders desire to approve loan requests. Keep your credit score in the 500 range or lower to obliterate your chances of receiving the funding you need.
The FICO score is a number that accurately represents your creditworthiness and the level of risk you pose to potential lenders.
It ranges from a low point of 300 to a high end of 850.
The score measures several factors, such as:
- your payment history,
- account mix,
- new credit,
- and credit length.
You can worsen your score and make your application grossly unappealing to Tesla lenders by maxing out all of your credit cards and not paying any of your bills on time.
Performing numerous credit inquiries within a short period will help as well.
2. Don’t earn an adequate income.
Tesla lenders like to see that you earn enough money each month to afford your car payments after you take care of your bills.
Thus, the prospective lender will ask for proof of income and expect you to earn a wage that leaves room for a car payment and more.
One of the fastest ways to obtain disapproval is to earn much less per month than your current bills cost.
That way, you’ll have no way to pay your car loan, and you will likely default within the first month.
3. Have a visa status.
You can also do some damage to your financing application by being in the United States on a visa.
The finance company may reject you if you apply for financing in the country where you don’t reside permanently.
In this case, your credit score and time spent in a non-native country will not affect the lender’s decision.
They’ll know that you have to return to your home country one day; thus, they may be extremely nervous about helping you get a car in their country. Try this tactic if you want to improve your chances of getting rejected for Tesla financing.
4. Have a high debt-to-income ratio.
All financial companies pay attention to the debt-to-income ratio; some give it more value than others.
It’s a figure that explains the percentage of your income you use for your debt. A 36 percent DTI is generally acceptable because it leaves room for non-debt bills, living expenses, and other costs.
Furthermore, it shows that you could recover from a crisis or emergency during the course of your loan.
Thus, you should wait until you have a gigantic debt-to-income ratio if you want lenders to reject you. Get as close to a 100 percent ratio as possible and then request a loan for an $89,000 Tesla model.
5. Don’t provide proof of income.
Pay stubs, W-2 forms, and 1099s are all documents that verify your annual income.
You can tell the lender anything when you apply, but you’ll need to have proof of adequate income to receive an answer regarding your loan request.
Avoid providing any income documentation to facilitate your disapproval effectively.
Come up with an awful excuse for why you can’t provide any form of income verification. For example, you can tell them your dog ate all your pay stubs, or you get digital stubs but don’t have a computer.
The lenders who might give you a no-doc car loan likely don’t have partnerships with Tesla.
However, if you work at Tesla you’re probably having an easier time getting approved for a Tesla. Read more here about how many Tesla employees drive Tesla cars.
6. Choose the wrong Tesla model.
Not all lenders provide loans for all Tesla models.
The Y, 3, S, and X are typically the easiest models to get approved for.
Anyone seeking a Telsa outside of those four models (such as the Roadster or) must do additional research to find a lender willing to cover the expense. Thus, you can choose an alternative or unlikely model if you want to receive a denial on your application.
7. Maintain a spotty work history.
Having considerable gaps in your work history, being unemployed, or being self-employed can scare a potential lender and cause them to reject an application faster than other methods.
Lenders need to see that you earn the income to repay your loans and want to know that your income is consistent.
Being a new or unemployed person will give them the red flags you want to reflect to get swift disapproval.
8. Have a limited credit history.
Avoid applying for credit building accounts or doing anything that will leave traces of a credit history for the prospective lender to assess.
You’ll want to keep your credit history as undetectable as possible to increase your chances of receiving a rejection.
If you do have credit accounts, make sure they aren’t for auto or installment loans.
A Tesla lender will likely disapprove you if you don’t have a record of paying off any high-end auto loans.
9. Submit an erroneous credit application.
A surefire way to obtain an immediate rejection for a loan is to submit false or erroneous information on your application.
For example, the lender won’t be able to verify who you are if you spell your name wrong or miss a digit from your social security number.
In fact, you may want to give them your employee ID number or a random confirmation number instead of your social security number just to throw them off.
That way, they might reject you for being a ghost or having illegal residency in the country.
Other errors that can result in rejection include annual income typos, incorrect address or inadequate length of residency, and missing employment data. You probably won’t get a loan if you earn $500 a year, work at BLANK, and have lived at Reynold’s pond for two weeks.
10. Ask for much more than you need.
Multiply the value of the Tesla model you desire by three and ask for that amount when you apply for auto financing.
Lenders typically offer loans to cover the loan amount, not anything extra.
Thus, you might put yourself out of the approval bracket by asking for just a little bit more than that.
Why not go way overboard and seal your own rejection fate?
11. Mention zero references or cosigners.
Your prospective lenders might ask for references they can call to inquire about your borrowing and repayment habits.
They may also want to reach out to these people for a character reference. Additionally, the company might offer you the opportunity to have a co-signer sign the agreement to get you approved.
Don’t provide any such information.
When asked for references, tell them you don’t know anybody. When asked for a cosigner’s name, tell them everyone you know is busy. Make it as difficult as possible for the lender to gather any significant information about you. You can almost guarantee a denial that way.
Now you know 11 great ways to get disproved for a Telsa loan.
Ensure that you do the complete opposite if you want to obtain approval for a Tesla model.