Personal Loan Denied? Here Are Some Possible Explanations
A personal loan denied by the lender has to be disclosed to the applicant along with the reason. This is the law under the Credit Opportunity Act o you can take actions to remedy the situation and apply for another loan. These are some of the reason a personal loan is often rejected.
Bad Credit Score
There is a minimum credit score requirement by the lenders and if you fall below that then it can get your personal loan denied. The lender is obligated to tell you which credit bureau they used to check your credit score and what it was. You can also get a free copy of your report from any of the bureaus once a year and another copy if your loan is rejected. If there are any discrepancies in the report you can file a claim to have it fixed.
To get approved for a loan you have to have a steady source of income so the lender knows you will be able to pay the monthly installments. If you do not prove a source of income and satisfy the lender it will lead to a personal loan denied. Not only should you be employed but also maintain the job for some period of time. Self-employed individuals have to provide a copy of their clients and contracts.
If you already have outstanding loans then it will be harder for you to secure another loan. The debt can be mortgages or car loans which are recent. You should wait a few months after applying for a loan to ask for another one so the lender knows you can handle the financial obligations.
A few documents are to be submitted with the loan application and if they are not complete then consider the personal loan denied. The documents have to be accurate and updated because lenders verify the information themselves.
It is illegal to deny a loan based on race, gender, color, religion, marital status, age or national origin. If you believe you have been rejected on this basis then you can file a complaint at the Consumer Financial Protection Bureau.