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Car Buyer Receives Auto Loan Denial without Application

Joey got confused when he received a letter from a bank stating that he was rejected for an auto loan; he had already picked a car loan from a dealership.

“I am confused because, while this bank provided me a quote, I didn’t request a car loan from it. Why am I getting this letter?” Joey wrote to

Joey bought new wheels a month before the letter landed in his mailbox. He related that the F&I guy from the dealership showed him several car loan quotes from different lenders, and he picked one.

However, receiving a rejection letter from the bank which he did not contact puzzles him. “Is there any reason to be concerned?” he asked.

According to full-time automotive writer and Bankrate adviser Tara Baukus Mello, there are times when the car loan decision and the interest rate come later.

In her reply to Joey’s question, Mello said, “Usually the lender’s initial approval or disapproval of the car loan and the associated car loan interest rate being offered are spot-on, but occasionally the lender comes back with a different interest rate or denying the auto loan altogether, as in your case.”

Moreover, Mello assured Joey that there is no reason to be concerned as long as he is confident that he has been approved for the car loan he picked at the dealership.

Dealers normally act as the middleman between lenders and car buyers. They complete car loan applications in several lenders for their customers. Lenders give them quick quotes so dealers can proceed with the sale. However, the loan has yet to go through the entire process with the lender before being approved.

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