How Do You Get a Loan When You’ve Been Previously Declined

Not everyone has excellent credit, and for years, I was one of the many that suffered from bad credit.

For those of you not aware, your credit score can affect the rates you get from the bank when applying for products, whether or not you can borrow money, have an apartment or even a phone. Lousy credit can hang over you like a dark cloud, which means, when it comes to applying for a loan, you may be declined.

There are some factors to consider and ways to help yourself out today, and along the way to take control, and raise your credit score along with your opportunities, so you can live a more comfortable and less worrisome life.

Photo by Steve Johnson


Know why you were declined

Most people don’t ask why they were not approved. Many things can lead to loan rejection; asking the loan provider is a direct way to know, that will help you gain the information to course correct.

There are a few things that can lead to loan rejection:


  • Wrong paperwork: If the loan provider cannot confirm your details, and verify your paperwork; even a little mistake is enough to prevent them from giving you the loan. Wrong paperwork can include outdated information, incorrect entry of transaction details. It’s necessary to check all paperwork before submitting.


  • Bad credit: Many businesses and loans are judged based on credit score. The bad history recorded during all transactions can affect you getting a loan; late bills payment, the high levels of debts also wavey heavily against you.


  • Income: The amount you earn is a factor to consider before you can gain approval for a loan. Your income determines the partially denotes how much money you’ll be able to pay back and thus borrow. The loan provider has their standardize level of income that must be met before considering a loan.


  • Debt to income ratio: DIT, also known as debt to income ratio, is considered before a loan can be given. As a general guide, the highest the DTI that can be considered for a loan is approx 43% (depending on country and region). The higher the DIT, the lower the chance a provider can give loans. Likewise, the lower the DIT, the higher the chance of getting a loan.


  • A large amount of debtsthe number of initial debts reduces the chances of getting a loan. A clear credit and low amount of debts increase your chance of getting a loan.


  • Applying for too many loans in a short period: There’s a reluctancy for lenders to loan if there are repeated applications within a specified period. It doesn’t weight as heavily as some of the above listed, but it does matter.


How long will you have to wait to correct the problem of not getting a loan?

The reason for the rejection determines the time required to get another loan after a rejection. If many factors had led to the denial, the time to be considered for another loan would be longer. Also, if there were not many high priority red flags, then the left of waiting time would be significantly shorter.

Realistically your credit score can change month to month, but for you to see significant changes, it will take months if not years based on your history from the past seven years on average.


What can I do to get a loan after rejection? 

Before applying for another loan after a rejection, there are several factors to consider.

Although the loan provider can offer resources and procedures to follow, this might help to resolve the problem of getting a loan again;

Rebuild credit: if the loan rejection was due to credit, then building your credit should be the first step you take. Taking care of the debts and paying off all bills is essential. It’s one of the factors why most people are declined.

Sufficient collateral: having enough collateral boosts the chance of getting a loan. Even after rejection, the favourable building of collateral is a good option because it will way the odds in your favour.

Prove that you can pay your debt: a bank always considers this fact; if the loan can be paid back on time. Time is the value of money; putting time in mind can increase the opportunity of getting a loan. Debt to income ratio is important. The lesser the DTI, the higher the chance of getting a provider.

Reason for loan: You should have a valid reason for getting a loan, and a plan as to how you’re going to pay it back before every applying your intent plays into this process is the gaol. At the same time, the loan providers goal is to generate income.

Minimum requirement: check the minimum requirement that has been stated by the loan provider before thinking of getting a loan.

Try another loan provider: the initial transaction might have polluted the mind of the loan provider. Thit is necessary to try another loan provider. Just don’t make a habit of going around to everyone, as we mentioned, to many applications will work against you.


Research is required in taking an initial step if you’ve been declined for a loan or credit product. The fact that there was a disappointment of not getting what you wanted in the first place that does not mean you should not try again. You should take time, make a plan, learn the options that might work for you, even if it means finding a moneylender open on Sunday.

Educating yourself, knowing your options and knowing the right reasons will have you on the right path in no time at all.






Founder, CEO at Addicted
Mark Munroe is the Creator and EIC of ADDICTED. He's ADDICTED to great travel, amazing food, better grooming & probably a whole lot more!