Many people, when faced with unexpected expenses, turn to fast approval online loans as a solution. While these loans can be a great option to help you meet pressing needs or emergencies, not all applications are approved. Unfortunately, lenders must evaluate the creditworthiness of borrowers before extending a loan. So, what happens when your application for a fast approval online loan gets rejected?
In this article, CashLoanPH will take a deeper dive into the common reasons why loan applications are rejected in the Philippines. CashLoanPH will also walk you through some helpful tips that may increase your chances of being approved in the future.
Why Loan Applications Get Rejected in the Philippines
No Bank Records
If you have a long-standing banking relationship with an institution and have frequently conducted transactions, you may find it much easier to get approved for a fast approval online loan. Conversely, if you have never had an account with a bank or don’t have a savings account or credit card, it may be difficult to obtain a personal loan. In this case, additional documentation and financial records may be required to prove your creditworthiness.
Fixed Source of Income
One of the critical factors that lenders consider when reviewing an application for a personal loan is your income source. This is because the lender must assess your ability to repay the loan over the designated period. Borrowers with a stable income source, even if it’s low, are more likely to get approved than self-employed borrowers with irregular income.
No Credit History or Poor Credit Score
Credit history is one of the most significant factors that lenders consider. A good credit score typically indicates that you are a low-risk borrower likely to pay back the loan in full and on time. A poor credit score, on the other hand, signals that you are a high-risk borrower and may not pay back the loan as agreed. If you have a poor credit score, the chances are high that your fast approval online loan application will be declined.
It’s worth noting that submitting multiple applications to different financial institutions may signal to lenders that you have financial difficulties, which may further harm your credit rating and chances of getting a loan.
Being in Debt
If you have previously taken out a personal loan with a bank or another financial institution and have not made all the payments, your loan application may be rejected because the lender assumes you are insolvent. Some lenders may overlook this factor and approve your application, but may charge higher interest rates or require collateral or a guarantor.
Requested Loan Amount Beyond Capacity
One of the most common reasons why fast approval online loan applications get rejected is when a borrower requests loan amounts beyond their current actual income. In this case, lenders will review the application and only approve a portion of the requested amount- the portion that they believe the borrower can repay in full and on time. Alternatively, lenders may approve the loan application, but at a much lower loan amount or reject the loan entirely.
Improving Your Chances of Getting Approved
While some of these reasons are beyond your control, you can take certain steps to increase your chances of getting approved for a fast approval online loan in the Philippines. Here are some actionable tips:
- Pay your credit card bills on time and in full as this demonstrates your ability to repay borrowed funds.
- Maintain your old bank accounts and credit cards as long-standing credit relationships increase your creditworthiness.
- Spend less than your credit card limit and pay off your balance in full each month.
- Try to boost your credit score through other means such as taking out a small personal loan for debt consolidation or regularly paying your bills on time.
The above are some of the most common reasons why fast approval online loan applications get rejected in the Philippines. It’s essential to maintain a good credit score and to have a reliable income source if you’re looking to take out a personal loan. However, if you’re struggling to obtain a fast approval online loan and need money quickly, Crezu is a fantastic option for all Filipino citizens aged 22 and over who are living and working in the Philippines and have a legal ID.
With streamlined documentation and disbursement procedures, Crezu ensure that you have the money you need within 24 hours of your loan request. They do not distinguish between customers, whether old, new, self-employed or fixed-income borrowers- they are here to help meet your financial needs.
Remember to only borrow what you can afford to repay and to make timely payments as falling into debt can be financially and emotionally debilitating.