Have You Had A Loan Application Declined? Here Is What You Should Do Next

What Should You Do If Your Loan Is Declined in Australia?

1. Have a Clear Understanding

Make sure you fully understand the reason why your loan was declined.

If it is due to affordability, ask exactly how much more income you would have needed to have the loan approved. Every lender is different, so that means every lender’s affordability calculator is different. By you understanding how close/far you were from getting the loan approved will help you to be directed to a suitable second chance lender. If you just start applying to many other lenders without understanding your financial situation, this will create many new entries on your Credit Report, which means your credit history will be instantly tarnished with too many recent applications.

If the decline is due to your credit history, then you should ask for a copy of your credit report and understand what is listed on it. If the lender is not allowed to give you a copy, then you can easily obtain a free copy from Veda Advantage. When you understand what has caused your decline, for example a telephone account that was never paid, then you can use this knowledge and talk to a lender who deals with bad credit loans and may consider your application.

2. Approach Other Lenders and Ask If You Are Eligible Before Submitting A Formal Application

Be honest and approach other lenders armed with your decline reason. When you are open and completely honest, the lender can give a good indication if your application would be worth submitting, or if you are better to wait for a certain time to improve your circumstances. There are many reasons for a decline. The most common are affordability, credit history and security but there are many others such as being on probation or even not being able to provide enough proof of the income you have stated.

3. Be Prepared for Your Next Application

The best thing you can do after being declined is to learn from it and be better prepared for your next application. Make sure you have all your paperwork organized before you apply for the loan, such as pay slips, bank statements, employer details, identification documents etc. Ask the Lender before you submit your application for a checklist of items you will need. Get a free copy of your credit report to ensure nothing new has been listed against you, and if something has, then get straight on it and get it paid or have that included in the purpose of your loan.