The loan company refused you a loan? Don’t worry – there’s a chance you’ll get it from another company. However, before you send another application, check what may have caused the decision to grant funds to be unfavorable.
We have prepared a list of the most common reasons for issuing a negative loan decision in relation to the application process. Mostly they relate to the lack of creditworthiness or verification process that the loan company had a problem with.
The most common reasons for rejecting a loan application
- Errors in the registration form
- False data provided in the application
- No verification transfer or incorrectly carried out transfer
- Non-compliance with formal requirements
- Lack of adequate income
These points are the most common reasons for rejecting loan applications. To understand what is under them, read on.
Errors in the registration form
Registration forms on loan portals are part of the loan application. Data such as name, surname, e-mail address and telephone number are transferred on the loan application. The application should also include the number of the personal bank account.
The invoice must be kept individually by the borrower, because the company verifies the identity on the basis of a verification transfer in which the recipient’s data is provided. If these data do not match those in the application (e.g. there are typos) then the application will be rejected.
False details given in the loan application
Declaring inflated income or withholding bailiffs are common cases of providing false information. Data inconsistent with reality can not only block the loan at the moment, but also in the future. The information is checked in different ways. Examples are:
- the lender makes a phone call to the client,
- checks information in databases,
- it reaches data collected on the Loan Info Exchange Web.
No verification transfer or incorrectly carried out transfer
The verification transfer has two meanings. First, the lender once again checks the compliance of the data provided in the registration form and loan application. Secondly, it verifies the bank account number to which the money should be transferred in the event of a positive decision. The loan company will give you the account number and the title of the transfer that you must make.
The usual amount of the verification transfer is USD 0.01, which is returned to the borrower. If you make a mistake in the transfer title, it will be classified as an incorrect transfer. If you enter the account number incorrectly and the transfer does not reach the recipient, your loan application will also be rejected.
Non-compliance with formal requirements
Loan companies always determine who can apply for a loan. Age range, citizenship, legal capacity – these are the main formal requirements. For example, Vivus will grant a loan to a person who is 19 years old. The 18-year-old will be rejected in the verification process.
Lack of adequate income
The loan will not be granted to a person who cannot afford it – these are legal requirements. Therefore, if you apply for a loan of several thousand USD and you do not punish income at all or they are too low, the decision to grant a loan will be negative.
Loan application rejected. What to do?
Do not lose hope! A rejected loan application from one lender is not the end of the world. Calmly think about what could have caused this situation, and when you’re ready, submit an application to another company.
And remember! Providing all necessary, consistent with reality information and double checking whether there is no error in the application will pay off.