Lenders actually have varying loan approval standards. You may realize that you can easily get a loan approval from one loan provider and be disapproved on another. If this is the case, you may look around to find programs that truly match your criteria.
There is no guarantee that your loan application will be instantly and easily approved. You should expect the unexpected and be prepared to take rejection. Once you get disapproval, don’t treat it as the end of the road for you. Instead, be sure to be successful in getting approval for a loan next time. Here are some recommended measures you should take.
Just like when dealing with any problem, the first major step for resolution is to determine the root cause. This should not be a problem because it can be easier to identify the possible reasons for the loan application disapproval. The loan provider may have disclosed its reasons for declining. If not, you may consider major factors like your credit history, required income, and completion of documents.
Correct any error, if there is any
If your loan was disapproved because of your insufficient income, you should correct this problem through applying for a loan that is intended for borrowers within your salary bracket. If you are getting a secured loan, you may have been asking for a loan that is equivalent to about 96% to 100% of your collateral’s appraised valuation. Try to renegotiate and make necessary adjustments before resubmitting the loan application. Be sure you are qualified to apply for and obtain specific loan products.
Improve your credit score
If the rejection was based on a poor credit score, you should aim to deal with it. First, ask for a copy of your credit report to make sure there is no error in reporting. If there is any mistake, immediately seek correction from credit reporting agencies. Your score may also be reflecting negative transactions that you did not actually make. If your credit score is really low, you may opt to take special loans available specifically for bad-credit borrowers. You may spend some time generating positive scores to boost your credit history so that you may have a stronger rating when you apply again for a loan.
Apply for new loan
After doing all the measures described, you may start to fill out forms and apply for a new loan. It could be from the same loan provider that rejected you or from another lender. If there were corrections on your files, you may immediately resubmit a loan application to the same lender. If you were disapproved due to other factors, consider those reasons and move on to find other lenders.
Know what type of loan you need and how much you actually require. Now is the time to consider as many loan providers as you possibly can. If a bank’s approval is elusive, why not consider non-traditional loan providers, which may have better offers and less stringent policies on providing loan approvals?