If your loan application has been denied, you may not know where to turn or what steps to take next to secure funding. Traditional banks are risk-averse, if they feel that they are taking a chance on you or your business, they’ll usually deny your application or look for more guarantees that you can pay them back. If your loan application has been rejected, there are other options. Plenty of Australians are now using alternative lenders to secure funds.
Assess your circumstance
Being rejected for a loan can be distressing, especially if you urgently require funds for an important business move or for personal reasons. The first thing you should do is find out why you’ve been rejected and take steps to fix the problem. Here are some of the main reasons why individuals are denied loan applications:
Bad Crediting Rating: One of the main reasons why most people are denied loan applications is due to poor credit. If you’ve a history of bad credit, you’ll find it difficult to secure funds using a traditional money lending institution. If you’ve experienced some challenges or defaulted on loans, it can be tough to get approval from a conventional lender.
The alternative is to apply for something like a caveat loan, you’ll receive money from a private lender who secures the loan off the back of your property. The ‘caveat’ will be placed on the title of your real estate, so you can’t do anything with your premises until the loan has been resolved.
Low Income: When applying for a loan, money lenders will want to know that you can make the minimum monthly repayments before they transfer funds into your account. If they feel you’ll struggle to make payments, or you aren’t earning enough income to cover your costs, they may reject your application. If you are applying for a home loan, lenders are required to calculate your ability to pay.
Additional Issues: There are times when you’ll be denied a loan for other reasons such as an appraisal not coming in high enough to justify a loan. You may also have other significant financial commitments that a lender may view as a negative against your current application.
If you’ve applied for a loan and been rejected, or you are looking for alternative ways to secure funds, why not apply for a loan using a recognised Australian money lender? Using alternative money lenders has numerous advantages, including:
- Low-interest rates.
- The option to borrow up to 100% of your property value on a caveat loan.
- Funding is faster if you use an alternative money lender.
- Less paperwork in comparison to a traditional lender.
Sometimes you think you’ve taken all the right steps to secure a loan and the bank has refused your application, the best thing to do is to discuss your problem with an alternative money lender. If you need quick funds or a less severe judgment policy, a money lender is the way to go. They take everything into consideration and do their best to help you secure funds.