The most common reasons for rejection of a personal loan include a low credit score or credit rating, a high debt-to-income ratio, unstable employment history, too low income for the desired loan amount, or lack of important information or documentation in your application.
Incorrect information in your application, such as incorrect address and misstated income, may result in a loan denial. Review all details before you submit your application. It is possible to have an excellent credit score and still have a negative event on your credit report; that might not sound sensitive to some online personal loan lenders.
This is because even after something big like bankruptcy or foreclosure, you can improve your score within 18-24 months if you play your cards right. Unlike an unsecured loan, a secured loan is a loan that is backed by collateral such as a car, tangible asset, or a cash deposit.
To do this, look at your budget and use a personal loan calculator to understand better how much you can afford to spend on repaying your loan each month. While it’s not uncommon to change jobs from time to time, keep in mind that the history and stability of the job carry weight when you’re considering a loan.
As mentioned, pre-qualifying for specific amounts of loans through our marketplace allows you to check your offers with multiple lenders at once and check their loan rates instantly. If your loan is rejected, it won’t affect your credit score as it won’t be considered a hard request. If you become a federal credit union member, you may also gain access to an alternative payday loan (PAL).
Once you’ve figured out why your loan application was rejected, you can take steps to improve your chances for the next time. Not only does it help approve your loan, but it can also help improve your financial situation over the long term. A credit score is essential when evaluating a potential candidate’s credit score. Lenders usually have stricter credit requirements if you’re looking for an unsecured personal loan.