Why Has Your Short Term Loan Application Been Rejected?

Why Has Your Short Term Loan Application Been Rejected?

Identifying the exact reason for your short term loan rejection can be extremely difficult when you don’t know the possibilities. Before applying for any kind of loan, you should always educate yourself on the risks surrounding borrowing and the basics of the process. However, most of the time when applying to lenders, even to those who accept applicants with bad credit, we don’t consider thinking about being rejected. Rejection can bring relative amounts of strain and worry to your financial situation. So, gaining an understanding of the reasoning and, potentially, your next steps can help you decide on how to move forward. There are a variety of reasons why your application may not have been accepted. Here are just a few examples for you to consider and reflect upon. 

Reasons For Short Term Loan Rejection

Most of the time, when people apply for short term loans, they are dealing with a financial emergency in which they cannot support themselves. Hence the efficiency and speed of loans within the industry right now. Typically, we advise that loans should be your final option. This is because when it comes to borrowing credit, you can easily make a mistake and fall further into the cycle of debt. However, once you’ve been declined by the lender, you may find it almost impossible to find a different route to take. We suggest addressing your concerns with those around you to try and receive some sort of help or support.

Your Credit Report

Your credit report acts as one of the key players for lenders when making their final decision. Despite the information being quite relative, a lender can easily gather as much as they need when deciding whether to accept or decline your application. Usually, your credit report shows your personal information, including your name, your current and previous addresses, employers, etc. It will also include data regarding your credit, for example, late payments, credit accounts, and recent loan inquiries, as well as other general information that a lender will find useful. You can also see the information above by accessing your credit report online. The issues may arise if a lender picks up on aspects like poor repayment schedules and unsubstantial credit history.

You’ve Applied Too Many Times

Despite being far from the truth, many people believe that applying to multiple lenders and creating a number of applications will increase their chances of being accepted. However, this can be extremely harmful to both you and your finances, since it could reduce your chances of acceptance. Whenever you submit a new application, the lender will conduct a hard credit check on your finances. These hard credit checks will slightly decrease the credit score shown in your credit file every time. Even though it may not sound very damaging, many people already have poor credit scores and cannot afford to lose any further points. As a result, before applying for a loan, you should familiarise yourself with how lenders operate and the risks involved.

Bad Credit or No Credit

As we mentioned, your credit score is an important factor for a lender when making a decision. Having a higher credit score will indicate that you have a better relationship with your finances. This alone will reflect your reliability as an applicant. The higher the number shown on your report, the greater your chances of approval may be. If you have a bad credit score, you can still borrow a loan. However, your chances will be smaller. Many lenders believe lending to those with lower scores is too much of a risk. Here at LoanPig, we believe that your past financial experiences shouldn’t always hold you back. Especially if you are trying to progress and build your financial skills. Therefore, we offer specific bad credit loans to give everybody the opportunity to borrow during their emergencies.