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There are a few common reasons why you may not be approved for a loan, but generally speaking, the reason you can’t get a loan will be because you don’t meet all of the lender’s eligibility criteria. This may because of things like your age, income, or overall situation, or because you’re completed your application form incorrectly.
Ultimately, when considering your loan application, lenders want to make sure you’re likely to repay your loan on time, and anything that marks you out as a risky borrower may prevent you from getting a loan.
If you’ve been rejected for a loan, the first thing to do is confirm with the lender the reason your application was unsuccessful. Many lenders will automatically provide you with the reason you were rejected, but if not, it’s worth contacting them.
Once you’ve determined the reason you couldn’t get a loan, whether it’s because of your credit history, current financial position, or another reason, you should work to fix it before applying again.
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.
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