Are you sick of being rejected for a loan? 

If you’re in need of a loan and have been refused everywhere, it is more than likely that you have not met the requirements of the lender. Whilst this may be annoying, it is not the end of the world. The key to dealing with loan rejection is understanding why your loan has been rejected. Once you discover the reason, you can work on improving your situation and securing the loan you need.

When you apply for a loan, the lender (regardless of whether it is a bank, credit union or alternative lender) will assess your ability to repay the loan. To do this, they will look at a variety of factors. These factors are used to help determine whether or not you are a risky borrower. If they find that you are not capable of repaying the loan, they will not take the risk on you. As such, your loan application will be denied.

Let’s take a look at some of the main reasons why your loan may have been rejected.

Low income

A lender will consider your level of income and whether you have any income at all. If your income is considered too low, you may be rejected. This becomes even harder if you have a new business as it is difficult to show income, particularly if you have just begun your business operations. 

Unstable Employment

Lenders are concerned about whether or not you can repay your loan. If they see that over time you have hopped from job to job, it may discourage them. As such, they may not approve your loan application.

Too many hard enquiries

Each time you apply for a loan, a credit enquiry can be placed on your credit file. This can decrease your credit score which in turn makes it more difficult to secure a loan. Whist alternative lenders such as Bad Credit Loans may not necessarily factor in your credit score, more traditional lenders such as banks will deny your application.

Payment Defaults

Have you checked your credit score recently? If your income is stable and you have a default on your credit file, you can well and truly get rejected for a loan. So if you need a loan but have been refused everywhere, start by checking your credit score. The last thing that you want is a late phone bill or a missed rental repayment ruining your chance of loan approval.

Inaccurate Information

Is your credit score high? Is your income strong? If so, you may have been denied due to providing incorrect information. Make sure that all the information provided is honest and accurate. Lenders will verify any information and documentation. If it is incorrect, they will reject your loan application.

Over leveraged

Do you currently have more than one loan? If so, you may not be able to keep up with the additional payments of a new loan. A lender may assess your level of income, and compare this to your loan repayments. If your income is insufficient to repay multiple loans, you may be denied a loan. 

How can you improve your chances of securing a loan?

  • Check your eligibility requirement: Before you apply for a loan, check out the eligibility requirements. Lenders will display their lending criteria online. If you don’t match these requirements, don’t apply. That way you won’t face rejection and take a hit on your credit score.
  • Attach a statement of any saving and investment: Keeping a record of your income and any investment will boost your case for approval. A positive loan history will demonstrate to lenders that you are capable of saving money and investing. Remember, lenders look for two things;
    • The ability to pay back the loan
    • A financially responsible borrower.
  • Take control of your finances:
    • If your credit file has a negative listing, it may be time to remove it. Fortunately, there are professional services that can help you remove any negative listings, defaults, and even court judgments. It is possible to remove them yourself, but we recommend going to a trustworthy and reputable credit repair agency. Here they can assess your credit situation and find any discrepancies with your credit defaults. Above all, they are aware of all the necessary legislation required to help you repair your credit. 
    • Pay your credit card bills and any other payments on time
    • Don’t ignore verification calls from the banks, pick up the phone. 
    • Don’t apply for several loans as it may decrease your credit score

If you have been refused everywhere, apply for a bad credit loan

At bad credit loans, we have a team of experts that can quickly understand your financial situation. We offer personal loans for people with bad credit along with business loans and low documentation loans. Even, if your application has been denied in the past we can help you secure a loan. If you would like to enquire online, it will only take you a matter of minutes. Alternatively, you can call us on 1300 123 328 to speak to one of our loan specialists.

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