5 Reasons Your Loan Application Is Always Rejected

Creditors do not play dice with your loan application. If you’re wondering why your loan application keeps getting rejected, then you might want to step back and take a look at your credentials. Read below to have a deep understanding of how banks process applications—and soon you’ll master how to get approved for a personal loan.

Incorrect and/or unclear information

The initial part of every loan application is filling out those lengthy forms. While you think that those forms are merely a part of the rigorous process of loan application, no item there doesn’t go unchecked. An inexistent number cause by poor handwriting? Such simple missteps can get your application rejected, so make sure that every piece of information written in your application is factual and verified. Go over your form at least three times before submitting it just to be sure.

Bad credit score

By any chance, did you have problems paying off previous loans or credit cards? If your credit history is spotty at best, then you may have a higher chance of having your loan application rejected. Make sure that your previous loans are settled, your bills are paid on time, and your financial records straight. Keep in mind that banks share lists of clients with shaky credit history, so the only way out is through solving your credit problems.

Over-the-limit credit cards

Similarly, how you use your credit card greatly affects your loan approval. In case you missed it, credit cards are express permissions for you to get loans at points of purchase—and a lot of people tend to forget that. If you have an outstanding credit in your account, banks will go over it and see if your credit line is over the limit. If you’ve used more than 70 percent of your credit limit, it can greatly affect your loan application negatively; much more if you’re over the limit.


What is fraud, to begin with? If you supplied incorrect information regarding your credit history, used another person’s identity to apply for a loan, and other deceptive methods intentionally, then it constitutes to fraud. Aside from having your application rejected, you may also face criminal charges.

Huge loan amount

“How much would you like to borrow?” If this question pops out when during your interview, we’re pretty sure that you’re tempted to retort “as much as possible.” However, banks have a strict policy when it comes to the amount they can lend to an applicant—and there are computations based on your credit history and other information that tells about your financial health. Most especially, the amount of money creditors will lend you is based on your income and ability to pay loans. Remember, exorbitant loans also require a substantial income to match it.