bank declined personal loan

Bank Declined Your Personal Loan? Try An Online Title Loan

You went to a bank and applied for a personal loan to cover an emergency expense. Unfortunately, the bank declined your loan. You don’t know why, and you don’t know what to do or where to go to raise the cash you need.

Reasons Why The Bank Declined A Personal Loan

It’s hard not to be frustrated or even angry when your loan application is denied. However, take this as an opportunity to review your financial history and find out the possible causes. It can help you take the proper steps, then improve your chances the next time you take out a bank loan.

Banks set certain criteria to determine a borrower’s capacity to pay off a loan. To make it more objective, they rely on credit ratings and documents that you can present. So, if the bank declined personal loan, it was probably because of one of these reasons.

Credit History

Most banks require a credit score of at least 660 to qualify for a small personal loan, and at least 700 for larger amounts. The score is calculated according to your payment history for bills and other types of credit, the length of your credit history, and your credit mix.

Missing payments or declaring bankruptcy can lower your credit score. However, sometimes your score is low for no fault of your own. For example, if you haven’t taken out any loans or own any cards, or if organizations failed to report payments.

Other factors are debt-to-income ratio, which compares the amount of debt you have with your declared income. To calculate this, divide your monthly payments by your monthly income.

when bank declined personal loan

Employment And Income Sources

Another reason a bank declined personal loan is that you have a non-traditional source of income. In their eyes, anyone who doesn’t have a 9 to 5 job with a company and a regular monthly salary is a “credit risk.”

For example, you may be self-employed, are a freelancer whose income can vary every month, hold several part-time jobs, or receive a pension or alimony. Even if you have the means to pay off the loan, the source of funds doesn’t meet the bank criteria.

Aside from the type of job you have, banks also look at how long you’ve been with your current employer and whether you’ve had gaps in your employment, which is their way of measuring your job stability.

Finally, one of the most common reasons why the bank declined personal loan is income level, especially if you’re trying to borrow a large amount of money.

Documents And Forms

Bank loans will require several documents to prove income, employment, and capacity to pay off the loan. If your application missed any of this information, or if there were any errors in the forms, then the bank will either not process your loan or decline it.

What You Can Do If The Bank Declined Your Personal Loan

Now that you know the possible reasons why your loan was declined, you can prepare and improve your chances of approval in the future.

You can improve your credit history by making bill payments on time. Even being one day late because you forgot the bill harms your credit. Set phone reminders, or arrange for payments to be automatically deducted from your bank account.

Since the length of credit affects your credit score, don’t cancel your oldest credit card or oldest bank account. To improve your debt-to-income ratio, make a budget for paying off the remaining debt, or look into debt consolidation.

To meet bank employment criteria, don’t change jobs before you’re planning to take out a loan. If you’re a freelancer, make sure you have formal documents like billings and invoices to serve as proof of income.

However, these are long-term solutions to improve your chances of getting a bank loan. How can you resolve your immediate financial needs right now?  

women getting online title loan cash

If The Banks Won’t Help You, An Online Title Loan Can!

You can apply for online title loans even if you have bad credit. At Wisconsin Auto Title Loans, Inc. all you need is to be the registered owner of a vehicle, and you can get up to $15,000 depending on your vehicle model and condition.

An online title loan is a secured, short-term loan where you use your vehicle title as collateral. Benefits include:

  • It does not require a minimum credit score or employment criteria – anyone can apply!
  • You can continue using the vehicle during the duration of your loan
  • Online process is convenient, fast and easy to do
  • You receive the money the same day or the next business day after your request is approved

Almost any car or truck can be used for online title loans Wisconsin. It just needs to be registered under your name, fully owned, and lien-free (which means that it is not currently being used as collateral for another loan, and has no outstanding judgments against it).

Start Your Loan Application Now

Getting started with an online title loan is simple. Just fill out the online form, and one of the representatives from Wisconsin Auto Title Loans, Inc. will call you to explain how an online title loan works, its requirements, and answer any questions you may have. Reach out now to raise the money you need now—with less time, fewer documents, and less hassle!


Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Louis Tully

Louis Tully is a full-time finance writer offering financial expertise to everyday consumers. He understands the core values of finance and used his writing talents to share his own experiences with money to his readers. His articles teach how financial failures can easily become successes by making new habits and creating realistic goals.