We tend to put some funds down aside for a rainy day but it may happen that your savings don’t cover up for an emergency.
Personal loans are an easy way out of such situations. Whether you want to finance an important trip or buy a needy appliance, there are multiple loan programs that can help you do just that.
However, loan applications don’t carry a chance of 100% approval. More often than not, they can be turned down. Fortunately, you can be aware of the reasons and try to avoid them next time you apply for a personal loan.
You Will Need to Show a Stable Source of Income
Lenders who are willing to loan you a handsome amount of money need to confirm that you have an appropriate and regular income through a stable job.
You have low chances of scoring a personal loan with a poor credit history, pending debts, scattered income, or a struggling credit report.
In this case, It would make more sense to explore advances that can help you get through a tough month before your paycheck arrives. These carry flexible approval terms and may let you off the hook even with a low credit score.
Check the Application Thoroughly Before Submitting
Frequently, applicants have to face loan rejection simply because they were not careful enough while submitting the application.
Providing inaccurate data such as contact address, invalid contact number, name, etc. would eventually have the loan request turned down.
The only way to fix this is to re-check the fields that you have filled in before forwarding it to the bank or the credit union. Moreover, you can opt for a review by contacting their customer support service.
Lastly, You Have to Get Rid of Previous Loans
Banks run a credit check before approving or disapproving your loan application. As a result, the financial institutions would know if you own any previous debt or have faced bankruptcy in the past.
Pending loans can make it difficult to apply for a new one. Therefore, it is always recommended to pay off debt and do it with timely installments.
The bottom line is that, with multiple ongoing debts, your chances of approval for a personal loan is quite low. You would have to think of a way to get rid of the debt beforehand.
So, What Can You Do Now?
When you are in dire need of funds, it is important to keep your options open. As you can see, personal loans can be turned down for a number of reasons but your financial emergency won’t wait an extra day.
You can consider money loan apps, however, some of these may require you to have a stable credit history.
Other than that, apps like Cash App do more than just send and receive funds from other accounts. Particularly, it keeps the option of borrowing money open to all its account holders. You can also loan the money via Chime by utilizing its SpotMe feature.
Regardless of the option that you find fit to use, keep in mind that loans never come easy and untimely repayment can get you in trouble. Interest rates peak if you are late with clearing a debt and that can make it difficult to stabilize your financial life.
Therefore, you can keep the option of requesting funds from friends or family members on the table.
Although it makes sense why many won’t be comfortable with this idea, it is a good way to avoid the interest that banks impose and you won’t need to go through a credit check as well!