Can’t Get Approved for a Loan? Here’s What to Do About It.
One of the best parts about personal loans is that even people with bad credit can often get financing and pay for what they need right away. However, because of unique financial circumstances, we cannot approve absolutely everyone for a loan.
If you can't get approved for a loan and are wondering why, here are common reasons for denial and how to improve your chances and reapply.
Why Am I Not Getting Approved for a Loan?
Approval is not guaranteed when you apply for a personal loan. However, lenders send adverse action notices explaining their denial if they cannot loan you money.
Here are the most common reasons you might not get approved for a loan:
- Your debt-to-income ratio is too high, so lenders question if you'll be able to make monthly payments
- Your credit score is too low, so lenders worry about not getting paid back
- You don’t have a stable job and income
- You asked for more money than your lender is willing to loan you
- You don’t have a bank account, permanent address, or email address
- You aren’t a U.S. citizen over the age of 18
- You didn’t fill out your loan application properly
I Need a Loan but Keep Getting Declined
If you keep getting denied a loan, don't panic. There is still hope that you can get approved to borrow the money you need. The time that you applied for a loan may also be a factor. During tough economic times, lenders tend to stick to stricter credit requirements. Therefore, it may be beneficial to apply again later, especially if your credit score increases or you can boost your income.
Loan Declined, When Can I Apply Again?
Whenever you apply for a loan, the potential lender runs a hard credit inquiry that can impact your credit score. If your loan application is denied, waiting at least 30 days to apply for another loan is recommended. However, some financial experts recommend waiting at least six months to apply again if you can wait that long for the money.
Tips for Increasing Your Loan Approval Chances
If you’re still saying, “I need a loan but keep getting declined,” consider these tips from our financial pros to improve your future chances of approval:
- Dispute any errors on your credit report
- Make all payments on time
- Ask for a raise, work more hours, or launch a side hustle
- Ask someone to co-sign your loan
- Secure a new loan with collateral
- Request a more realistic loan amount next time
When you’re ready to apply for a loan again, please apply online or visit a local branch near you.
