Why Loan Providers Deny Your Loan Applications? Mention Some of Main Causes

A lot of people apply for loans following several unavoidable needs for money.  It is noticed that the loan application of some people is accepted by the loan provider, whereas the loan application of several people are rejected by banks and financial firms. There might be various reasons why your application for the loan has been discarded by the loan provider. Some of the main causes of the denial of loan applications are mentioned below-

•     Your residence address is listed on the defaulter list:-

If you live with someone under the same roof who has skipped the loan repayment and has been reported to credit agencies as a defaulter, then, there is high possibility that your loan application might be denied by banks and loan providers as your residential address will match with a person who is listed in the defaulter’s list.

•    Poor credit rating and loan repayment skipping:-

Your loan application is rejected by banks and conventional loan providers if you have low credit scores because lenders consider such borrowers as risky loan applicants.  If you have huge pending payment as your credit card dues, you have slipped on a few EMIs, telephone bills and insurance premiums; it is possible that you may get rejected for loans. So, keep close eyes on all these things very carefully.

•     Too much application for loans previously and very small income:-

Your loan application can be rejected if you have applied for a number of loans at the same time and your income is insufficient.

•    Lack of loan guarantor:-

Your loan application is denied by the loan provider if you fail to arrange any loan guarantor for the loan. A loan guarantor is a person who assures of loan repayment if the primary borrower of the loan fails to pay back the loan. So, be careful while becoming a guarantor for the loan.

•    Your co-applicant has low credit scores:-

All the loan applicants need to have good credit records in order to get approved for the loan. If your co-applicant has a credit score problem, then it is possible that the loan provider might not think about your loan application.

•     You change your jobs regularly:-

Banks and other financial organizations prefer giving loans to applicants having a stable and reliable job. You need to be employed with a particular company or organizations for at least 3 years or more to get applied for loans. If banks and loan providers see job hopping scenario in your career profile, they might deny your loan application without any consideration.

•    You may be willing to get loans jointly:-

Banks and loan providers may reject your loan application if you try to take loans jointly along with your sister, brother, friends etc.

•    Your application for the loan has been denied before:-

Applying for loans without any reason is not appropriate as when your loan application is rejected, it is noted in your credit report and lenders can reject your loan application on the basis of it.  So, it’s always wise to update your credit report before applying for the loan.

•    Loan Applications with inaccurate information and errors-

Fill up your loan application otherwise it might be rejected by lenders if mistakes are found in it during the loan verification process. Also, if your loan application carries the wrong information about you, lenders also deny your loan application without any consideration.


Location: Adelaide SA, Australia

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