What should I do if my car loan was denied after purchase?

Full question:

I purchased a car on Jan. 19, 2009 thinking everything was taken care of with my loan. I had all the paperwork, took out insurance, and bought a tag. I receive a call today saying the bank who was going to do my loan has refused (10) months have gone by and I need to redo the paperwork or they get the car. I paid $5000.00 down payment on the car which they would refund. What are my options?

  • Category: Contracts
  • Date:
  • State: Mississippi

Answer:

When you buy a car, you typically sign a promissory note with a lender to secure financing. This note outlines the payment terms, and the lender usually provides the funds to either you or the dealership. After paying for the vehicle, you receive the title, which includes a lien from the bank. With the title, you can register the car and obtain insurance.

It’s important to review all loan documents you received. Check for any clauses that allow the bank to rescind the loan. The loan agreement is a contract, and its terms will dictate how to handle this situation. If the bank has violated the agreement, you may have options for recourse.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Yes, a bank can revoke a loan under certain circumstances, even after you have signed the contract. This typically occurs if the bank discovers issues such as inaccuracies in your application, changes in your creditworthiness, or if the loan agreement includes clauses that allow for rescission. It's essential to review your loan documents for any such provisions.