3 Crucial Things to Do When You’ve Been Refused a Loan
Loans are resources individuals can borrow from banks or financial institutions to financially manage planned or unforeseen events. As the borrowers borrow money, they’ll receive a debt they’ll need to pay at a required time.
Unfortunately, sometimes things will go differently than planned. Being refused a loan can be stressful and frustrating, especially if you need the money for an emergency. However, you’re never alone, and it can happen to anyone at some point.
We’ll discuss three things you can do if you can’t get a loan. We’ll also answer some frequently asked questions.
Find Another Lender
One thing you can do after getting rejected is to find another lender. While other lenders can give loans to people with bad credit scores, you must limit yourself to a few additional loan applications to protect your credit report.
You can use an eligibility calculator to get extra protection and determine if you’re qualified for a loan or credit card. You can also consider other loans or borrow from your loved ones and credit unions. Moreover, you can remortgage if you’re a homeowner.
Rebuild Your Credit Score and Apply Again Later
The credit score predicts how likely a person will pay the loan back on time based on the information from their credit report. Nobody wants a bad credit score. Fortunately, you can improve your credit score if you repay debts, avoid missed payments, and pay off your overdraft.
While you can’t improve your credit score overnight, you must remember that small steps in the right direction can eventually help you boost your score. And you can track it for free!
If the other steps don’t work, it’s time to stop borrowing. Whether you don’t spend money on a not-so-essential item or if you have extra savings, this habit can make you a more attractive borrower and reduce your debt-to-income ratio.
Frequently Asked Questions about a Declined Loan
It can be daunting for most people if they get a declined loan, especially if they urgently need it. After discussing what you can do in this stressful situation, this section will answer many frequently asked questions.
Can a Declined Loan Impact My Credit Score?
Receiving a rejected credit application won’t affect your credit score. The credit file only logs if you’ve applied for a loan. On the other hand, consistent applications (especially with hard credit checks) may cause your credit score to go down, so ensure you limit your applications to only a few chances.
What Happens If I Get a Declined Loan?
If a lender rejects your loan application, they’ll reach out to inform you. Sometimes, they only give a general reason for declining your application, not a specific one. However, they will tell you which credit reference agency they’ve used. From there, you can contact that company to check your score and correct any errors on your document.
How Do I Get a Loan After Being Rejected?
Just because one lender rejected your application doesn’t mean you can’t get a loan from other companies. Fortunately, there are plenty of other lenders out there, so ensure you find one suitable to your needs.
When Can I Get Another Loan?
While there’s nothing wrong with finding another provider immediately after your unsuccessful attempt, we still recommend taking a few steps back and evaluating your options. Otherwise, it can make you look like you’re in financial distress, reducing your chances of getting another loan. You can take a break for at least a few months to improve your credit score.
Finding Better Options
While you can’t control getting a rejected loan application, you can still find ways to improve your next chances. Managing your finances responsibly and boosting your credit score may help you secure a loan in your next application.
For over 40 years, King of Kash has provided affordable online loans for bad credit with no credit check. Apply now and secure your loan!
Cary Silverman is a consummate entrepreneur having sold multiple companies during his 20 years of business experience in the financial industry, but for him, it isn’t about the money. His success is rooted in his passion to focus on doing something better today than it was done yesterday. These days, he’s the CEO of Waldo General, Inc. that oversees the operation of King of Kash.