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Why Was I Declined for a 1000 Cash Loan?

26
Apr

Have you tried asking for a bank loan, but end up being rejected without a clear answer why? These are some common reasons why borrowers are declined even though they have been loyal customers at their respective banks for years. Initially, not able to borrow 400 dollars urgently when you needed it may leave you wondering what had just happened. If you find yourself in such a fix, welcome to how banks and lenders choose to evaluate borrowers. Many people are not able to get a bank loan easily now compared to the past years. Since the subprime crisis, financial institutions now have to follow stricter lending guidelines so high risk borrowers will not be granted loans or credit.

After being declined a $1000 cash advance, many people simply tried again at several lenders. This is in fact the worst way to get things approved, because you will damage your borrowing/payment history. Each time you do so, the lender will make a credit search and this is recorded by the credit agencies. When many credit checks are made on your account within a short timeframe, it looks bad. Anyway, most lenders will not say OK if you have attempted within the past 30 days.

The top reason you cannot get approved is simply because your are not the type of borrowers the lender is prospecting. Before you try for a new loan, make sure you verify the guidelines to see it suits you – such as minimum income, collateral required etc. Otherwise, going ahead is not only a waste of time – you will damage your FICO score as mentioned above. There are many lenders with specific loan offers, so find one that is more likely to accept you based on your credit ratings.

For those having temporary or part time employment, not many lenders will give you a $1000 dollars personal loan with no collateral simply because of the risk of default. Most lenders prefer borrowers to have some income stability so that they have the ability to pay back the borrowed money. It is easy to get a personal loan with bad credit when you have a stable and well paying job. However, some signature lenders offer unemployment loans for people who cannot find a job currently.

Are you asking to borrow too much money? Lenders may not want to give you a big $5,000 unsecured loan when your monthly income is $1,500 which probably means you need at least 6 months to pay back in full. It is important to be realistic about the maximum loan you can be approved based on your income and credit. Try a smaller loan for easy success.

Have you default on payments previously? This can be a very difficult issue to resolve since you cannot change your past. Thus, make sure you treat your loan obligations responsibly or you will have problems getting approved for unsecured loans for the next 6 years minimum. Banks will not trust borrowers who have defaulted on loans since they are more likely to repeat due to financial difficulties. Substantial improvements in your FICO score is needed in order to get for new credit.

Do you have a lot of existing debts to be paid? If that is the case, your current debt-to-income ratio (DTI) may be too high, and you cannot get a new loan until some of these debts have been paid down. Try to clear off the smaller debts and close these accounts to increase your chances to get approval for bank loans.

Check your credit reports for errors and outdated information. For example, you may have fully paid off a loan but it still appears on your credit history, dragging your FICO score down. Do not expect your credit information to be accurate, because many people have found errors using the free annual credit reports from Experian, Equifax and TransUnion. You can easily dispute credit report mistakes and get your score corrected.

If you have many credit cards and some are not being used, we recommend closing unused credit card accounts. On the other hand, you need to maintain a few cards with long history to avoid lowering your FICO rating. Simply use these occasionally and pay the monthly balance on time. Having a lot of open accounts can make you appear financially stretched to potential lenders.

So, the next time you are declined for a 1000 dollar personal loan, do not attempt to do this elsewhere within 30 days. You are better off spending time and effort to increase your chances of success on the next try. Use the above guide for getting installment loans approved easily, such as checking your latest credit report for erroneous info.