What to do if the loan application is rejected?

 

 

 

When we apply for a loan, we naturally hope that it will be reviewed positively. Sometimes, however, this does not happen. The reasons for refusing a loan can vary, but we don’t have to break down. Sometimes it really doesn’t take much for the lender to change his mind. In that case, let’s check what to do if your loan application is rejected.

Negative verification of the loan application – how is this possible?

Negative verification of the loan application - how is this possible?

Non-bank lenders do not follow such stringent lending rules as banks. This does not mean, however, that anyone can get a loan. First of all, we must meet certain formal requirements. They may apply to age restrictions. Some loan companies are not willing to grant loans to those under the age of 21 or over 70 years of age. That is why it is worth getting acquainted with formal requirements before we decide to complete the form. An inappropriate age range is not the only reason for refusing. Let’s look at others.

Errors in the registration form

Errors in the registration form

They do not necessarily result from deliberate concealment of facts. Most often this is the result of entering data too quickly, and especially of not checking their correctness before accepting. Proposal? It is better to look at what we are entering twice than to be surprised that the form was rejected because of typos in the name, email or phone number. It is a waste of time to re-submit the application and unnecessary nerves.

It’s worse when we deliberately try to mislead the lender and, for example, overstate our income or hide our debt. If such a fact is discovered by the lender, we can immediately forget about the loan in this company.

Unpaid outstanding obligations

In the case of loan companies, the rule is that a person who has an active loan in the same institution or arrears in repayment will not get another loan. In other words, we can’t have two loans from one company, so the next loan application is rejected. What advice There are two possibilities – we either pay back the previous commitment and only then apply for the next one (if we necessarily want the same lender), or submit an application to another company. It is only important that the other company does not have the same owner, so we need to check it.

Problems with the verification transfer

Problems with the verification transfer

One of the ways to confirm a customer’s identity is a verification transfer made according to strictly defined rules. And the most important one says that we can only do it from a personal account, of which we are the only owner. Therefore, our loan application will be rejected if we try to transfer a symbolic dollar from a company or account kept with someone else (whether it’s a spouse or a child). What can we do in this situation? Again, we have two solutions. One is to set up an individual personal account. We can do this online, and free-to-use accounts are available. The second option is to use another form of identity confirmation, eg using special applications – but not all lenders provide this option.

Too low income

Such a problem may arise if we apply for a high loan amount in relation to the declared income. If finding a better-paid job is out of the question, we can always consider taking some extra work, eg seasonal work. In the spring and summer it is easy to find some work in agriculture or horticulture, in turn in the pre-Christmas period in trade, postal or courier services. Another option is to reduce the amount requested.

Debt or bad credit history

Debt or bad credit history

We must remember that some lenders check the database or economic bases that record debtors. Negative entries in them may (although they do not have to) become the basis for rejecting a loan application. What do we have to do to make such an application successful? If we are afraid of negative verification due to entries in checker, then first of all we should see if we have a chance to eliminate them. We can try to clear your negative credit history or pay off debt to creditors. Another option is to check which databases a given lender has access to and possibly choose another company.

What can we do if your loan application is rejected?

What can we do if your loan application is rejected?

As you can see from the examples above, we always have a reasonable solution, so we don’t have to give up. The problem may arise because the spectrum of reasons for refusal is broad, and not all lenders justify their refusal to grant a loan. In this situation, we can try to ask for justification. However, the most important thing is to choose a potential lender wisely and, above all, write the truth in the form. It is also necessary to check all the data so that there is no accidental mistake.

In case of refusal, we have a choice – try again at the same company or submit an application to another loan company (but it must also have a different owner). There is also a third option, ie using a private loan.

Loan – how to ensure that the application will be accepted?

 

Loans can be a burden, especially if you are required to repay your monthly income. Therefore, for some, using a loan is never the best option. However, for large expenses that can improve your way of life and well-being, a personal loan or payroll loan can be an intelligent tool (of course with proper planning). But with the strict application process, you are not always sure that you will receive consent, especially if you do not have solid proof that you have the opportunity to pay back.

Have a good credit history!

Your credit history will be solid proof of your reputation and ethics. A great credit history will bring you much easier, even if you think that you do not need a loan now or think that you will not need it in the future. All unpaid loans, rejected checks, credit card arrears, and dishonest loan objectives include red flags that can exert pressure on the application process.

Running a savings account

Running a savings account

If you can’t afford a loan but really need money for any reason, you may want to set up a savings account. It’s best to regularly put something away. When you do this, you’ll learn that you’ll probably be able to manage your money better.

Provide relevant information

Provide relevant information

Banks will constantly verify all information provided in the application form. During the application process, banks and other lending companies will request you to check all personal information.

If they are unable to reach you in the first phase, the lending process will not take place. Other information such as finances, mortgages and employment should not be taken for granted, as any discrepancies in your data and documents may cause a delay in your application or a total rejection.

Aiming for a realistic loan

Aiming for a realistic loan

Make an amount that is realistic according to your cash flow. Finally, the bank will check the current situation with all the documents you intend to send. The bank may grant a loan, but probably less than what is desirable if it decides that you cannot return it. It is also possible to completely abandon the application.

Be patient

Be patient

Do not apply for too many loans at once, because the credit report contains all current inquiries and the banks could imagine that you are really in a financial trap. This may result in higher credit risk, which means less approval.

Compare interest rates and loan terms

Compare interest rates and loan terms

Before applying for a personal loan or credit line, make sure you compare the market and strive to get the best offers with the simplest payment terms. Don’t let the loan be a burden on your cash flow.