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I've been declined for a loan, now what?

Updated on March 18, 2013
What Now?
What Now?

Declined for loan, what now?

So you have been declined for a loan. Besides the fact that you are by far not the only one, what should you do now, if anything?

Whether the decline is for a personal loan or business loan, there are several steps one can take to either obtain financing now, or better position themselves for financing in the future.

- Review the decline reasons. Categorize the reasons for decline as either strong or flimsy. Lenders often decline for reasons beyond their core decline reasons in order to have something to maintain the decline with if the applicant resolves some of the decline reasons.

- Call the lender. Ask if there are any circumstances under which the decline can be turned into an approval. Will they approve it for a lower amount, with a strong co-signer, with more collateral, etc.?

- Consider other types of loans if the loan you were approved for cannot be salvaged. If you were declined for a personal line of credit, consider applying for a consumer installment loan backed by collateral. These loans are often somewhat easier to qualify for, especially if the collateral has a good value. Try to identify 2 alternative types of loans that you may be more likely to qualify for. If the request was a business loan, consider other types of business loans such as a loan using bank statements, or a loan based on invoices outstanding.

- Call up prospective lenders in advance and try your best to get to the credit department or a credit representative that will be making the decision. If you cannot get a hold of any of the actual people making the decision, get as close as you can. It is better to speak with a representative of a specific department than a customer service representative for the company in general.

- When speaking with the lender, give them your scenario and ask them what your chances are of being approved. Tell them you understand you won't hold them to task for giving you an idea if you have a good chance or not. Some lenders will tell you in advance you have a strong chance of being approved or a strong chance of being declined, while many will not.

- If you have identified other loan programs that are viable, apply for the lowest amount you need, not the highest amount you wish for.

- If you cannot get a loan at this time due in part to credit reasons, familiarize yourself with contacting the credit bureaus and disputing derogatory information that is wrong. You can do this yourself. Once you have a basic understanding of the process, you can send dispute letters yourself, and often get better results and save money compared with hiring a company to handle this process. If you do not have time to handle all of this, consider learning how the credit repair companies operate. You may be able to get rid of some of the derogatory information they were not able to remove.

- If you do not have any options now, you may have to wait until you can get your credit score higher, your income higher, or your time in business higher.


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      mary 3 years ago

      What an incredible story in my life, I am Mrs MARY JACK currently living in New York City, USA. I am a widow at the moment with three kids and i was stuck in a financial situation. Last two months i needed to refinance and pay my bills and some others serious debt. I was looking for a loan of $ 650,000.00 USD then I apply for a loan in one of the on-line loan company where i was scam about $3,800,00 usd in lending in the UK, but when I put the complain my good friend told me that the only place to get a loan on-line is the company is 100% guarantee that if I apply in a business loan I am to get the loan without any delay in the transaction, so i did, with a great fear in my heart not to loose money for the second time. My brothers and sister i want to let you know that there are still good people in the world we can trust and have faith on. With the advice of my friend in which I ask the company for a loan last week and to my greatest surprise i just got my loan yesterday. My hope and trust was all gone but now i new there are real loan firm we can trust. Am using this opportunity to inform you all that if you are in need of a loan, do not go else where so sick for a loan. i have found a real loan lender that can help you because he told me that the success of the societies is his pride i want you to sick for a loan in Here are the company email: And i promise you that your life will never remain the same again,

      I will be waiting to hear your own testimony.

      Mrs MARY JACK

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