If you recently tried to procure a bank loan but were unsuccessful in doing so, there are many reasons why this could have happened. Bad credit, failure to pay off previous loans on time, and too many loans are just a few of the obstacles that could be standing in your way. Before attempting to get approved for a loan, if you haven’t already done so, you should first do your own thorough finance check to make sure you have a good understanding of your financial situation.
This way, you will be better able to determine if you will be approved for your loan before even stepping foot in the bank. You can also maybe try to clean up your credit a little before visiting the bank, if you need to, so that you are more likely to be approved for the money you need.
Some reasons you weren’t approved for your bank loan could include: Bad credit score— Probably the most obvious reason is due to a bad credit score. This could stem from many different factors including failure to make payments on credit cards, bills, and other financial obligations. Before even going to the bank to enquire about a loan, you should try to find out your exact credit score first.
If you already have multiple loans out, your chances of getting another one decrease by each subsequent loan, depending on your income. Too many loans are never a good thing, so you might want to check into other alternatives of receiving financial aid.
After checking into your loan history, your bank is sure to deny you a loan if they find you have a bad history with making on time payments on previous loans. Even if you have every intention of paying this loan back in full and on time, your bank would be taking a risk by lending you money.
While you may be approved for the loan, if you have a co-applicant signing with you, the problem may be on their end. If you plan on having a co-applicant, be sure they’re in good financial standing before agreeing to co-sign with them. Job instability— Banks also tend to look into your job history before approving your request for a loan. If you’ve had an unusual amount of jobs in a short period of time, this could be another reason why the bank is rejecting your appeal for a loan.
Simply asking for too big of a loan could be a cause for a bank denying you money. If you’re asking for a large amount of money and your income does not reflect the ability to handle payments, including interest, the bank won’t agree to the loan. Try asking for a lesser amount if you can. See how the bank will work with you so that you can at least get approved for something.
Ways that you can improve your financial standing in order to be approved for a loan include: Open a credit card,
Opening a credit card can be a good way to build some initial credit. Charge an item you are sure you can pay off to the credit card and make payments on time. This will give you at least a little credit to work with. If you can’t get approved for a normal credit card, you can always try opening a secured credit card. This is a card with the credit line being as large as the deposit you make.
If you have multiple cards open with lots charged to them, banks may be hesitant to loan you even more money that you’d have to make payments on. While paying off cards with high interest rates first can be beneficial, so can paying off cards close to their credit limit in this instance. It will create a space between the current credit being used and your available credit limit, which banks like.
During the process of applying for a loan and being approved, you may want to make sure you’re using all credit cards lightly so that you are sure you can make adequate payments, and you also aren’t spending too much. The less you spend the better it will look to prospective bank loaners because it shows them your money can be directed on paying off their loan.
And remember, just because you weren’t approved for a bank loan doesn’t mean you can’t get the money you need. There are smart alternatives, like title loans from TitleMax.biz, that give you fast cash without using your credit.