Cigno Australian Pty Ltd

Loan Rejection: What To Do If You Can’t Get A Loan

coins spilling

When you need money in a hurry, few things can be as distressing as being rejected for a loan – especially when the loan was the last option. At this point, you’ll likely be dreading loan rejection in the future. But it’s also worth mentioning that not all hope is lost.

Understand Why Your Loan Was Rejected

There are a number of reasons why a loan can be rejected, and knowing these can be the difference between another rejected loan and a successful loan application in the future. Personal loan rejection reasons include:

If your loan application is rejected, see if any of the personal loan rejection reasons above apply to you. You may need to improve your credit score or pay off some outstanding debt in order to prove to future lenders that you are responsible with money.

Prepare For Your Next Loan Application The Right Way

Now that you know the reasons why a loan can be rejected, you are better equipped to set up your next loan application for success.

Get A Copy of Your Credit Report

As mentioned above, your credit score can greatly influence whether or not your loan application is successful, as lenders use this to better understand your financial history. You can get a copy of your credit score from sites such as Equifax, Experian or illion.

Pay Off Some Debts

Paying off outstanding debts can go a long way when it comes to a successful loan application, as it increases your borrowing power and shows lenders that you actively work on your financial situation. Plus, it lessens financial stress on yourself.

Consolidate Outstanding Debts

Debt consolidation is a great way to bundle all of your outstanding debts into one, with the added advantage of being able to take advantage of a possible lower interest rate. When you consolidate your loans, you will also be making just one repayment with one interest rate, rather than lots of smaller repayments (and fees!) throughout the month.

Form A New Budget

A budget is, more or less, an essential in anybody’s life, whether you’re an expert saver or the complete opposite. A budget helps you to assess where your money is going every week, fortnight or month. When you create a budget, you can set money aside for savings, for groceries, for car repayments – whatever you need. But when you make a new budget ahead of a loan application, you should also have a category for loan repayments. This way, you’ll be in much better control of your finances and know that you have money set aside to repay your loan.

Don’t Apply for A New Loan Until You’re Ready

This is a very important piece of advice, especially if you’re afraid of loan rejection, as applying for multiple loans within a certain period of time is a quick way to damage your credit rating. Instead, take the time to set yourself up for a successful application, allowing time to pass between applications.

Alternatives to A Loan

If you are sure that you will not be approved for a loan in the future, don’t fret: there are other options out there if you still need to borrow money.

At Cigno, we pride ourselves on our responsible lending practices that have helped thousands of Australians when struggling with financial problems. Talk to us today and find out how we can be of help to you.

Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.