Find lenders that will say Yes
- See your personalised rates
- Good and bad credit histories accepted
- Fast funding with no hidden costs
Would-be borrowers can find themselves on a lender’s rejection pile for a variety of reasons. Most commonly, it’s because you don’t meet all the lender’s eligibility requirements – like residency, employment status, minimum income, etc. – or because your credit profile isn’t what the lender’s looking for. Either way, it’s pretty frustrating stuff.
The good news is there are plenty of lenders out there, targeting different sections of the market. The goal is to identify which of those lenders can help you, and then which of those can provide the cheapest loan.
If you’ve been rejected for a loan, try to find out what went wrong. Many lenders will automatically provide you with the reason you were rejected, but if that didn’t happen, you could contact the lender to request an explanation.
Lenders have basic eligibility criteria which they typically publish for all to see. This covers things like being a UK resident, being within a specific age range or earning over a specific threshold. They might also specify a list of unacceptable loan purposes. If you didn’t meet the lender’s basic eligibility criteria, they should be upfront about this.
However, lenders also check your credit record, and frustratingly, they don’t publish exactly what it is they’re looking for. Naturally people who can demonstrate a positive history of responsible use of credit are more attractive to loan companies, but at the same time, some lenders are specifically seeking to help those with lower credit scores. If it was the credit check that held you back, then it’s simply a question of finding the lenders that can lend to credit profiles like yours.
Either way, it’s a smart idea to get to know your credit file. That way you’re seeing the same thing the lenders are.
Once you’ve determined the reason you couldn’t get a loan, whether it’s because of your credit history, current financial position, or some other reason, you can work to fix the issue before applying again or you can look elsewhere.
Most lenders will let you apply for a loan provided it’s for a worthwhile purpose. This includes paying for a wedding, a car, a holiday, home improvements or to consolidate your debt.
While there is no “best” reason to put on your loan application, there are a number of things that you’ll be unable to get a loan for. This includes things like borrowing money for gambling, investing and any illegal activities. This also includes getting a loan that you then use as a down payment or deposit on a larger loan.
Ultimately, the reason you give on your application should be truthful. If you lie on a loan application, you’re likely to risk damaging your profile. Even if the lender believes you, if they find out at a later date, the loan could be called in. In a worst-case scenario, you could end up with a Cifas marker against your name (simply meaning you’ve been flagged in the fraud database as a potential offender).
Late repayments can cause you serious money problems. See our debt help guides.
These are things you should avoid when applying for a personal loan:
There’s no way to completely guarantee that your personal loan application will be approved. Even if you meet all the eligibility criteria listed by a lender, the lender can still reject your application at its discretion. What you can do is avoid common mistakes that lead to personal loan application rejection and follow the tips we’ve discussed to improve your chances of approval.
Find out if a bridging loan or commercial mortgage would suit you if you’re buying or refinancing commercial property and when a bridging loan can be a better option.
See how to get a business loan as a limited company in the UK, and how much you can borrow.
Find out how to get a loan if you work for yourself, including which lenders offer business loans for sole traders.
Everything you need to know about commercial bridging loans. We look at when they’re useful, how they work and what to be aware of before taking one out.
Learn everything you need to know about hard money loans – also known as bridging loans. Find out how they work, what they can be used for and their benefits and downsides.
Read our in-depth guide to 100% bridging loans, including how bridging loans work, how to borrow 100% of the property’s value, how to get the best deal and the pros and cons.
Learn about government support and alternative options for businesses needing finance to help deal with the impact of coronavirus.
Everything you need to know about the benefits of using a bridging loan to fund a property development project if you don’t have the cash already available.
Find out if a bridging loan could be a good option versus other types of finance if you’re buying land.
Everything you need to know about residential bridging loans, including what to consider before taking one out, what they can be used for and their pros and cons.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.