Was Your Loan Rejected? Here’s Why And What To Do Next
Anytime there’s a loan rejected; it hits hard. But in times of economic trouble or personal financial emergencies, having a loan rejected can feel like the end of the world.
It doesn’t have to be that way. While there could be many reasons why your loan is rejected, there are some beneficial avenues to take to enhance your chances of scoring the loan you need.
Loan Rejected? It’s Probably For These Reasons
There are a few typical reasons why you encounter a loan rejection. Often, a credit score is too low, whether it’s because of late payments, lack of credit history, or another issue, such as bankruptcy.
Your credit score number gives lenders an indication of whether you’re likely to pay back the loan responsibly.
The number two reason? A high debt-to-income ratio, which looks at your monthly income and compares it to your monthly debt. If the ratio is too high, it’s another strong indicator that you won’t be able to afford the loan repayment.
Lenders also take a hard look at your general income to determine how likely you are to repay the loan, and many even have minimum income requirements.
Other Common Reasons Why You’re Having Your Loan Rejected
While the above three reasons are the likely culprits behind your loan rejection, a history of employment that’s unstable could also be the blame. Along with having a low income, having an inconsistent income is another reason why lenders may be hesitant to give you a loan.
Since there are so many different types of loans available, a rejection may come if your loan application doesn’t match what you want to use it for.
For example, if you’re looking for a loan primarily related to educational efforts, a student loan is usually more appropriate than another type of loan. While some loans come with flexibility, others are more strict about how the funds are used.
Always be sure that you’ve filled out loan applications completely and accurately. There’s often a lot to include — employment history, credit reports, tax returns — and it’s easy to overlook one part of an application. But it’s also easy to get a loan rejected if it’s missing even just one of the required items.
What To Do If You Have A Loan Rejected
The first thing to do if you have a loan rejected is to put it into perspective. It’s not the end of your loan journey if you get a rejection notice.
Take the time to read the loan rejection notice completely to get a full understanding of some of the issues at play. It should outline the exact reason or reasons your loan was rejected.
Your next step will likely be to look over your credit report. If you’re declined for a loan, you should be able to get your credit report copy for free.
Look for any information on your report that’s inaccurate since you have the option to dispute certain information that may be contributing to your loan rejection. For example, a bill you paid on time may be marked as a late payment on your report.
There are other approaches to take. One avenue is to rethink your needs and apply for a loan that’s smaller than what you originally asked for. It may also be beneficial to try your loan luck with another lender.
Different lenders have different requirements, terms, fees, and rates. You may not only be approved for a loan elsewhere but pay less for it than you expected.
Depending on the main reason for your rejection, taking a few strategic steps may help.
Look for some additional income streams (or try for a raise at work), be sure not to overuse your credit cards and refrain from applying for new lines of credit for a while or find someone with a better credit history to co-sign a loan application.
Try A Car Title Loan
Just because your loan application was rejected doesn’t mean you won’t be able to score another type of loan elsewhere.
A car title loan at Delaware Title Loans, Inc. can take as little as 30 minutes to qualify for with few requirements, making it an option for those who are struggling to overcome a financial emergency.
If you qualify for a car title loan at Delaware Title Loans, Inc., you may get up to $15,000 either the same day or the next business day.
A car title loan uses your vehicle’s title as collateral for a loan that’s paid off over time. It’s easy to get started. Head to our homepage and fill out the inquiry form.
Very soon after you submit, we’ll give you a quick call and guide you through the rest of the car title loan process.
Get Started Today
If you have a loan rejected, consider the option of a car title loan for help with overcoming a financial emergency quickly and easily. Start online, give us a call, or visit us today to get the assistance you need.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.