Denial for a personal loan application can be frustrating to people. We understand the sentiments. However, we need to understand the reason behind the rejection so we could work on it in the future.
Some take their frustrations to the lenders, but we need to keep in mind that they are only doing their job. The process is all business and it is not personal. With that said, what can we do to get a higher chance of approval in our next loan? Here’s how your next move should be.
Denial for a personal loan application can be frustrating to people. We understand the sentiments. However, we need to understand the reason behind the rejection so we could work on it in the future. Some take their frustrations to the lenders, but we need to keep in mind that they are only doing their job. The process is all business and it is not personal. With that said, what can we do to get a higher chance of approval in our next loan? Here’s how your next move should be.
Ask the Denial Reason
Many of us just walk out the door after we found out that our loan got denied. However, asking your loan officer might be the best step to prepare for your next move. Our credit history and our credit score is important information for lenders when they consider our loans. Most of them only offer loans to people with good or excellent credit record.
The best approach for this is by asking our lenders if they have a minimum credit score requirement. This will give us a quick insight if our loan will be more likely to be approved or not.
Check Our Personal Records
Looking at our credit report and our credit history says something about our creditworthiness. It is also important to take note that our income is also one of the biggest factors that affect our application.
Check if your income is enough to meet the minimum income requirement set by your lender. Another thing to consider is the debt-to-income ratio that is calculated by getting your monthly debt and divide it over to your gross monthly income.
Looking at our own record will tell what most likely our financial condition is. Improving this right after we got rejected is our number one priority.
There are other things that most lenders consider when approving a loan. One notable example would be our employment history.
If our employment records show that we jumped from one company to another in a very short amount of time, they might think that there is a possibility that our payments will not be that consistent.
Working to Get Better Chances
There are things that we can do to improve our chance when it comes to being approved in our loans. All you need to do is to know the things we need to work on and the things we should do.
Looking at our Credit Report
Checking our credit report and looking for noticeable things that we can work on is one of the easiest ways to get a better chance of being approved on our next loan.
Take a quick look and think of things that we can do to improve our current financial status. Once you settled this, you’ll have a better chance of dealing with your loans in the future. It is also worth mentioning that maintaining a good credit standing is better than repairing so always keep a good score if possible.
Most of us only look at one side of the picture and forgot that there are other lenders out there in the market. If we got denied because of the minimum requirements, it is best to look around and try other lending firms.
Utilize all the resources we have like the internet and look for possible lenders online. It is also good if we could ask our friends and relatives about their experience in their past dealings with their lenders.
Being denied for a personal loan is always a hard pill to swallow. However, we need to keep in mind that sometimes, the reason behind the denial is not always because of us and the best thing that we can do is to move forward and improve what we currently have.