Top reasons for personal loan rejection and how to deal with it : PaydayLV
Everyone knows the value of money and its impact on social and economic welfare. Especially during the pandemic, when many faced financial constraints. In such a situation, your only bet is applying for a loan, but what happens if the application is rejected? It is definitely not a pleasant experience, so to help you out, we have compiled a list of reasons why your loan application can get rejected and what possible options you have.
- Incorrect information
Stating the obvious but incorrect information or inconsistency in your loan application is still the number one reason that causes your application to be denied. You may also find out-of-date information, duplicate debts, or incorrectly listed personal information that contributes to your loan application getting rejected. So, your credit file must contain accurate and updated information. If you believe the credit report is inaccurate, it is a good idea for you to get a copy and have it corrected immediately.
- Credit score
A credit score is an indication on how good you are with credits and will determine your fate for getting any loan approved. They are scored from 300 - 850, and anything above 700 is considered good. But if your score falls below this, there is a high chance of getting your loan rejected. So, we recommend you ensure that your credit score always surpasses the recommended threshold. But we also know how difficult it can be to maintain a high credit score, especially if you have missed just one installment of your credit card. What makes things more convoluted is that once your credit score starts dipping, it gets increasingly difficult to raise the bar again unless you know the nifty little trick we discuss later in the article.
- Large outstanding debt
Although It is not against the law to take multiple loans, your loan application might be overturned if the total amount of debt you have owing is too large or your roof of funds to support your loan is not enough. Lenders will take a look at your income, and if the ratio of your loan is too high, you are most likely denied to avail any loans.
Often you need to pledge collateral to the bank for getting a loan approved. Failing to do so may hinder your chances of getting the loan approved. It also takes quite a substantial amount of time and resources to verify the authenticity of the asset pledged, increasing the time and, in some instances, the possibility of getting the loan.
- Irregular income
For most people, their primary source of income is their full-time time job. But, due to the pandemic, there is a considerable number of people getting laid off and losing jobs. This makes it more critical than ever for lenders to be sure about the financial capabilities of their clients. Even after a background check, if the lender thinks your job is a high-risk job, you may be denied from getting a loan approved. On top of that, income from contractual jobs may not be considered as they no longer fall in the category of regular income, making life for freelancers and contractors challenging to get a loan approved.
- Loan purpose mismatch
Loan lenders may also put a lot of restrictions on the purpose of the loan and how you plan to spend it. A particular lender may have different schemes for different purposes of loans, for example, different rates for student loans compared to car loans. So, make sure you understand the meaning and take the loan accordingly. Also, a point to note, there are few things your lender may restrict you from using the money, like investing in the stock market or anything that is borderline illegal like gambling.
Every problem has a great solution. There is no denying that getting a loan approved, especially during the pandemic, is hard, but you can always apply for Guaranteed payday loans. What is a payday loan, and what's with the buzz around it, you ask? Well, a payday loan is a fast, guaranteed loan that requires no credit check to get approved within hours after applying. Payday loans have gained exponential popularity, especially during this pandemic, because of their ease of access. To avail of payday loans, you do not require a bucket load of documents, just proof of employment, a bank account, and proof of permanent address. That's it. Anyone with these documents can now apply for a payday loan. And the best part, you do not have to pledge any collateral to get the loan approved, making it a safe and reliable form of a loan.
Interest rates and use cases
There is a lot of speculation and myths surrounding the interest rates of payday loans. There are many myths on the internet on how you have to spend a considerable amount of money as interest, which is absolutely wrong. Many people fail to understand the convenience and use cases of a payday loan. You have access to some quick cash which you are free to spend on anything you need, and will come and ask you for an explanation. Payday loans are short term loans, and as they do not have any collateral, it is regarded as a high-risk loan for the lender, so paying a $20-$25 premium for all these conveniences can be considered to be a safe investment. Think of it this way, if you take a loan from a friend, you would have needed to give him a fancy treat, right? Payday loan interest rates are lower than that. To get an exact quote on the interest rate, apply here free for a quote today.
No matter how good you are with budgeting and planning, it can often be challenging to cope up with financial expenses. There are a variety of instances like medical emergencies or urgent cash crunch that may require urgent money. But a personal loan can be a time-consuming endeavor, so that a fast payday loan can be the most effective solution for you. Please visit our website at paydaylv to learn more.