Once you’ve determined the likely reason for your rejection, you’ll want to work on improving your financial situation before applying again. Below are some steps you can take to increase your chances of being approved.
Improve Your Credit Score
One of the best ways to ensure your qualification for a personal loan is to improve your credit score. The first step you’ll want to take is to check your credit report to verify it has no errors. It’s possible to obtain your credit report through various online resources and websites, but your best option is AnnualCreditReport.com where you can get a free weekly credit report from each of the three major credit bureaus all in one place. If you find any glaring errors in your credit report, you’ll want to dispute them with the appropriate bureau.
Once you’ve checked your reports for errors, consider how you can build or improve your credit score. You may want to:
Request a credit limit increase: Asking your credit card company for a limit increase and then not using the card will lower your credit utilization (a big factor in your credit score).
Pay down your credit card debt: Paying off as much of your credit card debt as you can afford to pay will lower your credit utilization. Using a debt payoff method or talking with a financial advisor can help you prioritize and overcome credit card debt.
Set up automatic payments: Having your payments automatically deducted from your bank account each month will help you avoid missing or making late payments.
Taking steps to repair your credit score can also help lower your DTI, increasing your odds of loan approval.
Ask Someone To Co-Sign
If your financial situation isn’t sufficient for loan approval, another option may be to ask someone to co-sign a loan with you. Getting a personal loan with a co-signer that has a strong credit score and a solid income can boost your application.
Your co-signer – ideally, a family member or close friend – will apply alongside you, and you’ll both be responsible for repayment of the loan. Because both your credit score and your co-signer’s score are on the line if you miss a payment, it’s important to make sure any potential co-signer understands the risks involved.
Please note that Rocket Loans℠ doesn’t currently offer the option to co-sign on loans.
Compare Lenders
Lending requirements aren’t the same across all lenders, so it’s often worth comparing multiple lenders to see if you may be loan eligible somewhere else.
Using a broker or lending comparison website might increase your chances of finding a lender that will approve you for a loan. With these services, your loan request goes to several lenders at the same time. This doesn’t damage your credit in any way, and it can provide you with more options.
If you’re still struggling to qualify through a traditional lender, consider working with your local credit union. Credit unions are often more flexible in their requirements and are willing to work with you to evaluate your financial situation.
Use Collateral To Secure The Loan
Most personal loans are unsecured, meaning they don’t require collateral and are approved primarily on your creditworthiness. If your credit score is lower than you need it to be, you could consider a secured loan.
The inclusion of collateral makes secured loans easier to get approved for, as it assures the lender they’ll get their money back one way or another – even if you default on the loan. After enough missed payments, your lender can take permanent possession of the collateral asset you’ve offered up.
Prequalify For A Personal Loan
Prequalifying through a lender can also be a beneficial strategy. Getting prequalified typically only requires a soft credit check and can provide you with a strong indicator of whether you’ll be approved. A prequalification also includes your tentative loan amount and interest rate. It’s important to note that although a positive response may come from your prequalification letter, this doesn’t guarantee you’ll be approved for a loan.
Credit score, income and debt-to-income ratio are the main factors lenders consider when reviewing applications. Paying down debts, increasing your income, applying with a co-signer or co-borrower and looking for lenders that specialize in loans within your credit band could increase your approval odds.
You may not find out exactly why your loan was declined, but you can take steps to avoid the same happening again. You should check that your credit file is accurate. Improve your credit score by managing existing credit effectively. If you still need a payday loan, consider using a broker or comparison site.
No-credit-check loan options like pawning something or getting a cash advance don't require a credit score at all. Also, they can be a way to get the cash you need if you're having trouble finding loan approval.
insufficient income, suggesting to the lender that you can't afford the loan. your employment isn't seen as a secure or reliable source of income. there are indications of fraudulent activity on your file. your finances are linked to someone with bad credit, e.g. you have a joint mortgage.
A hardship loan is a loan to cover an unexpected financial shortfall, either because your expenses went up or your income went down. Hardship loans are not like other loans that are designed to meet an expected or planned need (like a car loan or a business expansion loan).
Your options for poor credit loans include: Personal loans: Some personal loans are available with bad credit, but you will likely pay higher interest rates and may not be able to borrow the full amount. Secured loans: With a secured loan, you put up an asset as a guarantee when you apply for a loan with bad credit.
Fair Finance is a direct lender. This means there is no middle man involved, such as a credit broker, agent or financial advisor. If you want to take out a personal loan with us, you apply to us directly. We then make the lending decision without needing to involve anyone else.
HDFC Bank offers pre-approved loans to customers in 10 seconds flat*. Non – HDFC Bank customers can get loans in 4 hours. If you've wondered how to get an instant loan, wonder no more.
What is the easiest loan to get approved for? The easiest types of loans to get approved for don't require a credit check and include payday loans, car title loans and pawnshop loans — but they're also highly predatory due to outrageously high interest rates and fees.
The easiest online loans to get with bad credit are typically payday loans, installment loans, or loans from lenders that specialize in subprime borrowers.
If you're thinking about borrowing cash to stabilize your finances, a hardship loan is an option to consider. Below we discuss the best hardship loans and what you need to know to compare and apply for hardship loans when you have bad credit.
Different lenders have varying minimum credit score requirements for a $30,000 personal loan. Generally, a score of 670 or higher is recommended to access better interest rates and terms.
Your credit score isn't the only factor lenders consider when processing an application, which means even people with an excellent score risk being denied.
Getting denied for a loan or credit card will not be recorded on your credit report, and it will not directly impact your credit scores. To improve the chances that you'll be approved for credit, you may want to take a look at your credit before you apply, and take steps to improve it if you need to.
Introduction: My name is Dan Stracke, I am a homely, gleaming, glamorous, inquisitive, homely, gorgeous, light person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
