5 Reasons Why Your Loan Application Was Turned Down

Having a loan application denied can be disheartening and stressful, yet it's important to recognise that this setback doesn't spell the end of your financial journey. Here are some key reasons why your loan application might have been turned down:

1. Insufficient Credit History: Lenders look at the credit history of the applicant to measure their reliability in managing and repaying debt. A sparse or non-existent credit history offers little to no proof of your ability to handle borrowed money responsibly, which can be a red flag for lenders. This is often the case for young individuals or those who have avoided credit up until now.

2. Low Credit Score or Remarks: Your credit score is a critical factor in the lending decision. It reflects your past financial behaviour and repayment patterns. A low credit score, typically due to late payments, high credit utilisation, or having defaulted on past debts, can cause lenders to view you as a high-risk borrower, thereby increasing the rejection chances of the applications.

3. Unstable Employment: Lenders need to assess whether they have a steady income source to meet monthly repayments. Frequent job changes or recent unemployment signals financial instability, making you a less attractive candidate for a loan. Consistent and stable employment is often a requirement for approval.

4. High Loan Amount Request: Requesting a loan amount that is disproportionately high on your income and existing debts is another common reason for denial. Lenders must ensure that you can comfortably handle your existing financial obligations plus the additional debt repayment. They use your debt-to-income ratio to evaluate this.

5. Mismatch with Lender’s Criteria: Each lender has a unique set of criteria for loan approval. Some might be more lenient with credit scores but strict on employment history, while others might prioritise a longer credit history over high income. A rejection from one lender doesn’t necessarily mean that all lenders will reject your application.

Measures to Increase Your Future Chances of Loan Approval

1. Check Your Credit Report: Begin by obtaining a copy of your credit report from major credit reporting agencies. Review it meticulously for any inaccuracies or outdated information. If you find errors, dispute them immediately to get them corrected. This can include incorrect account details, payments wrongly marked as late, or outdated personal information.

2. Register on the Electoral Roll: Ensure you're registered on the electoral register at your current address. This can aid lenders to verify your identity and confirm your residence in their decision-making process. Being on the electoral register can sometimes improve your credit score as well.

3. Build a Steady Employment History: Lenders typically look for signs of stability and reliability. A steady job and continuous employment history reflect financial stability and predictability in income, which are positive indicators for lenders. Aim to maintain stable employment for a substantial period before applying for a new loan.

4. Save Regularly: Demonstrating the ability to save money consistently helps in building a financial buffer and shows lenders that you manage money responsibly. Even small amounts saved regularly can reflect positively on your financial habits.

5. Limit Credit Inquiries: Every time you apply for credit, a credit inquiry is logged on your report. Too many inquiries in a short period can be seen as a sign of financial distress. Therefore, apply for new credit accounts only when necessary. Additionally, consider using pre-qualification tools offered by many lenders to see your chances of approval without affecting your credit score.

How we generate revenue?

At our core, we prioritise transparency in every aspect of our business operations. We want you to understand exactly how we sustain our services and continue to provide you with value. Here’s how we manage that:

Commission-Based Revenue Model

Our primary source of income is through commissions. Unlike some services that might charge their users directly, we operate differently. We have agreements with various lenders who compensate us for our matchmaking services. Here’s how it works:

1. Partnering with Lenders: We establish partnerships with a diverse array of reputable lenders who are interested in extending their lending services to a wide range of clients.

2. No Direct Cost to You: Our platform is designed to be completely free for you to use. There are no hidden fees, upfront costs, or additional charges imposed on you at any point.

3. Successful Matchmaking: We earn our commission only when we successfully connect you with a lender who approves of your profile as a good fit for their lending criteria.

4. Aligned Interests: This model motivates us to find the best possible match for you. Our success is directly linked to your success in securing the right lender for your needs.

By adopting this commission-based model, we ensure that our interests align with yours. This approach not only helps us maintain the integrity of our service but also builds trust and reliability among our users.

5 Reasons to Choose a Credit Broker Like Us

Time-Saving Convenience

A credit broker acts as an intermediary between you and potential lenders. By taking on the time-consuming task of comparing loan offers, a credit broker can swiftly sift through multiple options. This is especially useful if you're busy or find the details of loan comparisons daunting. Instead of having to contact multiple banks or lenders and navigate through their various offers, a credit broker does all this legwork for you.

Access to Better Deals

Credit brokers often have established relationships with a wide network of lenders. Because of these connections, brokers are frequently able to secure deals that might not be directly available to the public. They can negotiate on your behalf, potentially getting you lower interest rates or more favourable repayment terms than you might be able to secure on your own.

Higher Chances of Approval

One of the key benefits of using a credit broker is their ability to match you with lenders more likely to approve your loan application. Brokers have insights into the criteria used by various lenders for approving loans. With this knowledge, they can guide you towards lenders who are more lenient or more inclined to lend based on your specific financial situation. This matchmaking aspect significantly increases your chances of getting a "yes" where you might otherwise face rejection.

Tailored Financial Solutions

Credit brokers provide a personalised service, tailoring loan options to fit your individual needs. They consider your financial history, your borrowing needs, and your ability to repay, ensuring that the loan offers you consider are the best possible fit for your circumstances. This personalised approach helps avoid the one-size-fits-all pitfalls that often come with direct lender applications.

Expert Guidance and Support

Navigating the financial landscape can be complex and confusing. Credit brokers not only provide expertise in finding the best deals but also offer guidance and support throughout the loan application process. They can answer your questions, clarify the fine print, and help you understand your obligations under different loan agreements.