Finding out you've been denied a loan can be a terrible experience, especially if you don't know why or how to fix your financial situation. David Sant with Cyprus Credit Union shares some of the major reasons why you may find yourself rejected from a loan and what you can do to fix it.
Find Out Why
Start off by finding out why your request for a loan was rejected. Reach out to the lender and ask if they are able to provide the reason why you were denied. Once you are able to pinpoint the exact reason why you weren't able to receive your loan, it will be easier to fix.
Not Enough Income
Lenders will look at the minimum monthly payments for the loan and compare it to your monthly income. If they feel you are at risk at not being able to make your payments, your loan may not be approved.
Obviously, fixing this problem isn't as simple as making more money or else everyone would do it. However, you can look at ways around this. For example, if you applied for a car loan and were denied, try saving up for a down payment as that will help lower your monthly payment.
Too Much Debt
Often times, your loan will be rejected because you carry too much debt through credit cards or other loans. Before applying for another loan, come up with a plan to start paying down some of your existing debt.
Low Credit Score
Too often people hear their credit score is too low but they never really know why. Request a free copy of your report and review it. If you have judgments, garnishments or slow pays, chances are they are negatively affecting your credit.
If you have a low credit score, you are more likely to be denied from receiving any loans. Before applying, make sure your credit score is in good shape. When you apply for a loan, a hard inquiry takes place on your credit which make knock your score down even lower.
Sometimes, it`s just a specific lender that won't approve your loan. If you feel confident in your credit score, have the ability to make monthly payments, your existing debt is in control and your loan is for a
Find out more at cyrpuscu.com.