What if you have been refused a loan?

No one takes a loan for fun. No one wakes up in the morning and decides "you know what would be fun today? Taking out £20,000 in unsecured debt and risking both my credit and my lifestyle."

No, loans are taken out because of need. Whether the need is to pay back previous debts, cover school or medical costs, purchase a house or car, or even to take a much needed vacation. Loans are taken out because people need the money. It is never a rash decision.

 

Bad Credit
Unfortunately, however, lending agencies do not care why you need the money if you have bad credit. If your credit score is too low, you can be refused a loan, and that can feel like being left in the middle of the ocean with no boat.

Many people make the unfortunate decision of taking out a loan with a less than reputable lending company to make up the difference. But these high interest, high risk loans and lending agencies are equally as likely to put your life in further peril - a peril you may be unable to recover from.

What Should You Do When Your Loan Application is Refused?
To start, make sure everything on your credit score is accurate. For far too many individuals, a loan application's refusal is the first time they learn they have been a victim of identity theft. Depending on the extent of the damage and fixing any errors, you may be able to salvage your credit quickly and still get the loan you need.

The next step is to see if there is any information you can provide the lender that will make them more confident in your ability to pay back the loan. If your credit score is low due to missed payments in the past, but you have recently gotten a new job that pays double what you were making previously, or you were injured for a while and unable to work and have recently started working again, this is all information that could talk some lenders into providing you with the loan you want.

The third step is to see if you have collateral or a cosigner that could help you receive your loan. A secured loan , or a loan with a high credit cosigner, are both effective ways of showing lending companies that you are a lower risk candidate.

Finally, consider other alternatives. How vital is it for you to get the money? Can you look to others for financial assistance? If there is any way to delay the payment, do so and spend the time trying to improve your credit so that you can qualify for a loan in the future.

Getting your loan refused can be a stressful experience. Try to search for ways to fix your credit and convince lenders that you are a worthy candidate of their financial assistance and get loan from a reputable company. Never resort to an untrustworthy lending company simply because you need the money, as the risk is nowhere near worth the reward.




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