Refused Applications
Essentially, a loan will only be approved if there is a reasonable chance that the applicant will be able to repay the amount borrowed within the period stated in the loan contract, plus the interest on the full amount borrowed. If the bank or financial institution to which you have applied deems that you will be unable to meet the repayment conditions outlined in the contract, they may refuse your application.
Incomplete or illegible applications may be refused immediately: it is essential that you read every section of the document and fill in all the relevant fields. Even if you think the section does not directly apply to you, it may be worth simply entering N/A (not applicable) to show that nothing has been overlooked. Although personal loans can be used for almost any purpose, remember that banks and other lenders are unlikely to approve a loan application if the purpose of the loan is unexplained.
Nowadays, many loan application forms are filled out online, but if an application must be handwritten it should be as legible and neat as possible.
Considering how important the accuracy of your credit file is, you may be surprised to learn that many people who would otherwise be deemed to have a good credit rating are refused personal loans due to administrative mistakes. Even seemingly small errors can have a significant effect on your loan application. For example, if your salary was wrongly recorded as £3,000 when you actually earn £30,000, you will obviously be less likely to be approved for a large loan. For this reason it is worth checking the details of your credit file to make sure that there is no inaccurate or misleading information. However, checks for accuracy should not be made too often as this can also have a negative effect on your credit rating. Checking your file once a year, or just before making significant loan applications, should be sufficient. Make sure that you are well informed regarding your current financial situation before you apply for your loan, even if someone else manages your finances, and ensure that you list any existing debts you have as well as any debts which are owed to you.
The amount requested will have a big influence upon the lender's decision to loan to you, because it directly affects their estimations regarding whether or not your repayments will be feasible. If the lender feels that the amount you have requested is high and you might struggle to pay it back, they may either offer you a lower amount than that which was originally requested, offer you the same amount but at a higher rate of interest, or they may refuse your application altogether.
