7 Reasons Tesla Financing Declined? (What To Do Now!!)

Tesla financing is convenient and competitive, but it’s not guaranteed.

Sometimes, Tesla financing may decline your application for various reasons, such as your credit score, income, debt, or car model.

This can be disappointing and frustrating, especially if you have already ordered your dream Tesla.

By the end of this article, you will know how to deal with Tesla financing rejection and get your Tesla as soon as possible.

Why Tesla Declined Your Financing Application?

#1. Your Bad Credit Score

Your credit score is one of the most important factors that affect your Tesla financing approval.

Tesla financing typically requires a good to excellent credit score, which is usually above 700.

If your credit score is lower than that, you may have a higher chance of getting rejected or getting a higher interest rate.

#2. Misinformation on application

Tesla’s financing application is online, but you still need to be careful and accurate when filling it out.

If you make a mistake on your application form, such as entering the wrong social security number, name, address, employer details, or income details, your application might be discarded.

You should also check your credit report for any errors or discrepancies that might affect your credit score.

#3. Short credit history

Tesla will check your credit score and your past loan payment behavior to see how reliable you are as a borrower.

If you have a new or limited credit history, Tesla might not have enough information to assess your creditworthiness.

You can build your credit score and history by using alternative options, such as secured credit cards or personal loans. You can also ask someone with a good credit history to cosign your application with Tesla.

#4. Your car model and its Limited Availability

Tesla financing is not available in all states or for all car models. Currently, Tesla only offers financing in 19 states and for the Model 3, Model Y, Model S, and Model X.

If you live in a state where Tesla financing is not offered, or if you want to buy a different car model, you might not be able to get Tesla financing.

You can check the availability of Tesla financing on their [website] or contact their customer service for more information.

#5. Your Insufficient income

Your income is another important factor that affects your Tesla financing approval.

Tesla financing typically requires a stable and sufficient income that can cover your monthly payments and other expenses.

If your income is too low, inconsistent, or unverifiable, you may have a higher chance of getting rejected or getting a lower loan amount.

#6. Your Poor debt-to-income ratio

Your debt-to-income ratio is the percentage of your monthly income that goes towards paying your debts, such as mortgages, credit cards, student loans, etc.

Tesla financing typically prefers a low debt-to-income ratio, which is usually below 36%.

If your debt-to-income ratio is too high, it means that you have too much debt relative to your income, which can affect your ability to repay your Tesla loan or lease.

#7. You have an expired visa

Your visa status is another important factor that affects your Tesla financing approval. Tesla financing typically requires a valid U.S. driver’s license and proof of residency.

If you are not a U.S. citizen or permanent resident, you may need to provide additional documents, such as your visa status, employment authorization, etc.

If you have an expired or invalid visa status, you may have a higher chance of getting rejected or getting a shorter loan term.

What Happens If Not Approved For Tesla Financing?

If you are not approved for Tesla financing, you have a few options to consider. You can:

Try to improve your credit score and reapply for Tesla financing later.

You can check your credit report for any errors or negative items that might be lowering your score. You can also pay off some of your existing debts, make timely payments, and avoid applying for new credit until your score improves.

Apply for financing with a third-party lender, such as a bank, credit union, or online lender.

You might be able to find a lender that offers better terms or has less strict requirements than Tesla financing. You can compare different lenders and their rates and fees online or by using a loan broker service.

Pay cash for your Tesla vehicle.

If you have enough savings or assets, you can pay the full amount of your Tesla vehicle upfront.

This will save you from paying any interest or fees and give you full ownership of your car.

However, this option might not be feasible or advisable for everyone, as it can deplete your emergency fund or affect your cash flow.

Lease your Tesla vehicle instead of buying it.

Leasing is another way to get a Tesla vehicle without financing it. Leasing allows you to pay a monthly fee for using the car for a fixed period of time, usually 24 to 36 months.

At the end of the lease term, you can return the car, buy it, or trade it in for a new one.

Leasing might have lower monthly payments than financing, but it also has some drawbacks, such as mileage limits, higher insurance costs, and no equity in the car.

These are some of the possible alternatives if you are not approved for Tesla financing. You should weigh the pros and cons of each option and choose the one that suits your needs and budget best.

Will I Get the Tesla Order Fee After Being Rejected by Tesla Financing?

The order fee is only applied to the purchase price of the vehicle if you complete the transaction and take delivery of your vehicle.

The order fee is non-refundable, regardless of whether you cancel your order, fail to take delivery of your vehicle, or are declined financing by Tesla or a third-party lender.

Therefore, if your Tesla financing is declined, you will not get the order fee back.

You will have to either find another way to finance your purchase, such as through a different lender or a trade-in or forfeit the order fee and cancel your order.

You should also be aware that Tesla may cancel your order if you do not secure financing within a reasonable period of time after placing your order.

Best Alternatives To Tesla Financing (Upvoted by Reddit)

If you are looking for other ways to finance your Tesla purchase, you have several options to consider. Here are some of the most common alternatives to Tesla financing and how they compare.

#1. Bank of America Auto Loan

Bank of America is one of the largest banks in the U.S. and offers auto loans for new and used cars, including Teslas.

You can apply for a Bank of America auto loan online, by phone, or in person at a branch. You can also use the Bank of America auto loan calculator to estimate your monthly payment and interest rate.

Some of the benefits of a Bank of America auto loan are:

1. It has low interest rates and flexible loan terms, ranging from 12 to 75 months.

2. It offers a 0.25% interest rate discount if you have a Bank of America checking or savings account.

3. It has no application fee, origination fee, or prepayment penalty.

Some of the drawbacks of Bank of America auto loan are:

1. It requires a minimum loan amount of $7,500 and a minimum credit score of 660.

2. It may not approve loans for older or high-mileage vehicles.

3. It may charge a late payment fee or a returned payment fee if you miss a payment or bounce a check.

#2. PenFed Credit Union Auto Loan

PenFed Credit Union is a federally chartered credit union that serves members of the military, veterans, and their families.

It also offers auto loans for new and used cars, including Teslas.

You can apply for a PenFed Credit Union auto loan online, by phone, or in person at a branch.

You can also use the PenFed Credit Union auto loan calculator to estimate your monthly payment and interest rate.

Some of the benefits of PenFed Credit Union auto loan are:

1. It has very low-interest rates and flexible loan terms, ranging from 36 to 84 months.

2. It offers up to 100% financing for new and used cars, which means you don’t need a down payment.

3. It has no application fee, origination fee, or prepayment penalty.

Some of the drawbacks of PenFed Credit Union auto loan are:

1. It requires you to become a member of PenFed Credit Union, which may involve opening an account or making a donation.

2. It requires a minimum loan amount of $500 and a minimum credit score of 610.

3. It may not approve loans for older or high-mileage vehicles.

#3. MyAutoLoan

MyAutoLoan is an online platform that connects you with multiple lenders that offer auto loans for new and used cars, including Teslas.

You can fill out one application on MyAutoLoan and receive up to four loan offers within minutes.

You can also use the MyAutoLoan auto loan calculator to estimate your monthly payment and interest rate.

Some of the benefits of MyAutoLoan are:

1. It gives you access to a network of lenders that compete for your business.

2. It allows you to compare different loan offers and choose the best one for you.

3. It has no application fee or origination fee.

Some of the drawbacks of MyAutoLoan are:

1. It may involve multiple credit checks, which can lower your credit score.

2. It may charge a prepayment penalty if you pay off your loan early.

3. It may not offer the lowest interest rates or the best customer service.

What Other Financing Options Are Available for You?

If you have tried all of the above ways to improve your chances of getting approved by Tesla financing, but you still get rejected, don’t worry. There are still other financing options available for you to buy or lease a Tesla. Some of them are:

Trade-in: Trade-in is a way to use your existing car as a down payment for your new Tesla. You can trade in your car to Tesla or a third-party dealer, and get an instant offer and credit towards your new Tesla.

You can also use the Tesla website or app to estimate the value of your trade-in and apply it to your order.

Cash: Cash is a way to pay for your new Tesla in full without any financing. You can save up enough money to buy your new Tesla outright or sell some of your assets, such as stocks, bonds, etc., to raise enough cash.

You can also use free tools and services online to create and follow a savings plan over time.

Conclusion

Tesla financing is a convenient and competitive way to buy or lease a new Tesla, but it’s not for everyone. Sometimes, Tesla financing may decline your application for various reasons, such as your credit score, income, debt, car model, or visa status.

But don’t let that stop you from getting your dream Tesla. There are still some options and alternatives that you can try to get your Tesla financing approved or find another way to finance your Tesla.

In this article, we explained the possible reasons why Tesla financing declined your application, how to improve your chances of getting approved, and what other financing options are available for you.

We hope you found this article helpful and informative. If you have any questions or feedback, please feel free to leave a comment below. Thank you for reading!