What to do If a Bank Rejects Your Loan Application
So, your loan application has been rejected. Don’t worry, here’s what you need to do next.
Try Another Lender
If you’re not sure exactly why the bank rejected your application, and you think the decision was unfair, you should try another lender. It might be the case that a different lender comes to a different conclusion. Just because one creditor is not willing to lend money to you, that doesn’t mean that they all aren’t. But you shouldn’t get your hopes up. It’s true that you will find it very hard to get an unsecured loan if you have a particularly bad credit rating. If you get rejected again, it’s time to try some of the following ideas.
Consider a Secured Loan
Secured loans are good for people who are homeowners and are struggling to get an unsecured loan. They don’t rely on credit ratings because the lender can take your home as collateral if you don’t repay the debt. The risk of this kind of loan is that you run the risk of losing your home if you can’t make the repayments. But they do allow you to get access to a loan with low interest rates. And it can be paid back over a long period of time. Find out more about secured homeowner loans and how they work before going ahead.
Get a Guarantor Loan
People with bad credit ratings are increasingly turning to guarantor loans. These loans work by the borrower being backed up by a friend or family member who acts as the guarantor. The guarantor then has the responsibility for paying off the debt if the borrower fails to do so. This gives the lender some more security, so they don’t worry about how poor your credit rating is.
Asking someone to become a guarantor is a big move, but if you can find someone willing to do it, it can be a great solution.
Use a Credit Card
Credit cards are a good option for people looking for money right now because credit is cheap at the moment. It’s a decent option if you don’t want to go through the whole loan process. The credit card will allow you to withdraw money as a portion of your total credit line. This isn’t going to be a good solution for you if you want to borrow a particularly large sum of money though. But if you only want to get access to a relatively small sum of money, then this might be the best option.
Raise Cash by Yourself
This is an option that should always be considered. If you can find a way of getting your hands on the money you need without getting into debt, that’s an ideal situation. No one likes to get into debt, so any chance to avoid this should be grabbed with both hands. Obviously, this is not a solution for everyone. But if you have lots of possessions that you don’t really need and can be sold, you might be able to raise quite a lot of money. It’s so easy to sell things online too, so there’ll be no hassle.