”I need a loan but keep getting declined”
Has your loan application been declined? There are many reasons that may make you consider applying for a loan including debt consolidation, educational expenses, or vehicle purchase. However, one of the problems that many people succumb to is getting rejected everywhere they go to apply for a loan. So what do you do when you need a loan but keep getting rejected? If you are facing a similar situations here are some steps that help cater a successful loan application.
1. Find out why you were declined
Lenders cannot refuse to give out loans with no reason attached. Therefore, when a lender declines your loan request, you should first understand your financial position so that you can try to improve it before going out to seek another lender. Some reasons why a lender can reject your loan application include:
Low income: A loan lender needs to be sure that you can easily make the repayments of the loan in it’s entirety. One of the ways they can determine this is by looking at your current income and relating it to the expected loan payments.
Evidence of a regular income: There are instances whereby someone may be employed but has no evidence of a regular income. In this case, the lender assumes that he or she is unemployed and denies them the loan.
Too much debt: Lenders also considers how much debt a person already has before they can offer them a loan. In case they find that you are already struggling with a lot of debts, they are more likely to deny you the loan.
Adverse credit score: Your credit score is an indication of your credit worthiness to a loan lender. When you have a lower credit score, it shows the lender that you are not safe to lend to or cannot be trusted to keep up with the loan repayments.
Gambling: Loan lenders consider gambling as an irresponsible thing to do with your cash. Therefore, a lender can deny your loan request when they check as your statements and discover that you have made some payments to gambling sites.
2. Build up your credit and re-apply
Once you have discovered why your loan application was declined, the best thing to do is seek professional help of credit counsellors. A credit counsellor will analyse your current financial position and advise you on the best ways to improve your credit for you to be able to qualify for a loan.