What Happens if You Make an Error in Your Car Loan Application

Depending on the type of error you make in your car loan application, you will need to take different steps to repair the problem. Some errors are easily corrected while others can place you at risk of fraud accusations. In both cases, it is best to correct any error before your application has been processed.

Correcting an Application Pre-Funding

Before your loan is actually processed and funded, you can make changes to the loan application by contacting the lender. You may want to request a whole new application if the error is large. Otherwise, minor changes can be made through an amendment or other steps. There are relatively few consequences to withdrawing an application and correcting it. However, if you have to make several corrections, your lender will be concerned you are not responsible. This can lead to a denial of the loan, especially for a high risk borrower. If you must withdraw your application to correct an error, ensure you correct all errors at that point so you do not have to go through the process again.

Correcting an Application Post-Funding

Correcting an error after a loan has been processed or funded is much more challenging. First, you will have to contact the lender as soon as possible. Next, you will need to explain the cause of the error and discuss steps to correct the problem. Depending on what information was inaccurate, you will either simply amend the documents or go through a complicated process. 

Minor Errors

Minor errors on a car loan application can be corrected through an amendment to the loan document. Minor errors can generally be described as any that would be subject to change even if they had not been entered wrong to begin with. For example, you can change your address, phone number or employer in the future, so these items tend to be minor changes. You will simply need to assure written requests to change the information are filed. Your lender can then update your documents, and you will move forward with relatively few penalties if any.

Major Errors

Major errors on your loan application must be caught before the loan is sourced to avoid penalty. Even then, your lender may take issue with the error. If you do not catch the error early, then you will have to take a number of steps to avoid any accusation of fraud. Essentially, a major error on a car loan application is one that affected your ability to get the loan. These errors could be interpreted as lies or fraud in order to help you get the loan. Entering the wrong social security number, for example, could mean you used someone else's identity in order to gain your loan. Similarly, entering inaccurate salary information may have lead you to gain higher loan limits than you would have previously been able to achieve. It is best to contact a legal professional with questions regarding avoiding any accusations of fraud on your application. In the end, your loan will likely need to be closed.

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