Applying for car financing for a loan or lease is easy with Tesla. The process is online and you can complete the application in a few clicks.
That’s also one reason many people do not know what made Tesla decline their financing request.
If you are one of those, go through this blog to find out the top 5 reasons why Tesla declined your financing request.
What is Tesla Car Financing?
Tesla car financing is an auto loan program that lets you buy or lease a new car from Tesla.
Tesla offers financing on selective new car models and in a few states. This program is not offered for old cars.
The financing terms vary from 48 months to 72 months. Unlike many other auto loan programs, Tesla does not offer an 84-month financing option.
Lending rates at Tesla financing start at 2.49%. It means your APR will be upwards of this rate depending on your financing application and selection criteria.
Customers can directly apply through Tesla’s website for an auto loan. However, Tesla does not own a financing section. It handles all financing through undisclosed third-party lenders.
Your financing application can be reviewed within a few minutes and it may take up to 48 hours.
How to Apply for Tesla Car Financing?
Applying for a Tesla car financing program is simple with its online portal.
You’ll need to choose a car model, make, and financing option as a “loan” to get started. Then, you’ll need to log in with your Tesla account and use the online calculator to know the right amount of financing.
Remember, Tesla financing is not available in all states. You should choose the relevant state and car model. Then, fill out the online application form and provide the necessary information.
At this stage, you can choose to select the financing option through Tesla or a third-party loan provider. Tesla also offers financing through its lending partners.
Once your application is submitted, it will be reviewed for approval. If your application is approved, you’ll get a notification for your car delivery and loan terms.
What Do You Need to Apply for Tesla Car Financing?
Your proof of income is the first thing you should consider when applying for Tesla car financing. Then, you should check your FICO credit score before applying if you don’t know it yet.
Here are a few other things you’ll need to apply for Tesla financing:
- Vehicle model, name, and make year
- Social security number, contact number, date of birth
- Your residence address
- Your income details, employer name, and employer contact number
Top 5 Reasons Why Tesla Declined Your Financing Request
Tesla will review your financing application within 48 hours. In most cases, if it is a rejection, you’ll be notified within a few minutes.
There are several reasons for an auto loan application rejection. One reason of Tesla financing loan rejection is the availability of the financing facility in your state.
Tesla does not offer car financing in US states and for all car models. You should check these two facts before considering any other reasons for loan rejection.
Here are our top 5 reasons to consider if Tesla declined your financing request.
If you didn’t check your credit score before applying, it could be the biggest reason for your financing rejection.
Like any other car financing, Tesla will also look at your credit score before any other checks. You’ll need a good credit score (720+) for approval with Tesla.
Your credit score represents the summary of your personal financials. Therefore, check your credit score before you apply for financing with Tesla.
Also, depending on the loan amount, loan term, and income level, your credit score requirements may change. In short, the higher the credit score, the better it is for you.
Short Credit History
Like any other lender, Tesla will also see the length of your credit history. An established credit history records your previous loan payment practices.
If you are a young credit filer, chances are that Tesla will deny your financing application. Like other lenders, Tesla would also be interested in seeing your loan payment patterns.
You can work towards building your credit score and establishing a good credit history with alternative options.
Also, you can get a cosigner for your car financing application with Tesla to get approved.
You’ll need to submit your gross annual income and employer details with your financing application. Tesla will review your income and repayment capabilities.
If you have a good source of income and a stable income stream and you are still denied, it may be due to your low income-to-debt ratio.
It means if you already have another loan, your income-to-debt ratio will decrease. In short, if your gross income cannot support the minimum monthly payments, your car financing application will be rejected by Tesla.
Misinformation on Application
The car loan application for Tesla financing is online. Yet, you can make mistakes that can prove costly to you.
For example, if you entered the wrong social security number that doesn’t match your name, your application will be discarded.
Similarly, providing inaccurate or wrong personal information, employer details, and income details can get your application rejected immediately.
Mistakes in your credit report are also a relevant reason for your application rejection. It’s always good to review your credit report before submitting a loan application.
Hight Loan Amount
If all points mentioned above are in your favor and your loan application still got rejected from Tesla, then you simply applied for too much.
Lenders evaluate loan applications from different perspectives. One of them is to assess how much the borrower can repay.
Depending on your credit score, credit history, and gross income sources, your final loan amount will be analyzed.
You can discuss it with an official from Tesla about it in detail and adjust your loan amount by making a higher down payment.
Pros and Cons of Tesla Financing
Tesla car financing is simple to apply through its online portal. It offers several pros and cons for borrowers.
Convenience is the biggest advantage of Tesla car financing. You can apply for a loan without visiting any car dealer at a physical outlet.
Loan application approval is quick at Tesla financing as well. It also offers competitive APR on car loans starting from 2.49% currently.
Tesla car loan and leasing options are more suitable for borrowers looking for small vehicle loans.
Tesla car financing is not available for all car models. It is also not offered in all US states. Therefore, the limited availability of this financing program is its drawback.
APR at Tesla starts at 2.49% and goes upward. It can be expensive as compared to third-party lenders.
Also, the Tesla financing application does not offer a prequalification scenario. It means you’ll never know your final APR until your loan application gets approved.
Tesla does not offer cash rebates, 0% financing, or any other types of special deals. So, there are no cash savings when you apply for Tesla car financing.
Generally, you’ll need a high credit score (720+) to get approved at Tesla. So, if your credit score is low, you are out of luck.