The difficulty getting approval is hitting applicants across the board—including those in the market for homes, mortgage refinancing, vehicles, credit cards, and credit card limit increases.Lenders reject loan applicants for a number of reasons, many of which are related to the interest rate environment in which banks are lending. After the Federal Reserve has raised benchmark interest rates 11 times since early 2022, borrowing any amount of money is more expensive now than in recent years.
Buyers use a loan to finance most new vehicles sold in the U.S. According to the latest Experian report, the number of Americans taking out loans for new vehiclesThat's as average monthly payments have ballooned 25% between the second quarter of 2021, when inflation really began to heat up the car market, through the same period in 2023. For loans issued to buy new vehicles between April and June 2023, the average monthly payment is $729.