If you need a loan but keep getting declined, you’re not alone. Every day, Australians get turned down for finance by banks and private lenders, often without a clear reason. The good news? There are easy loan options and other avenues for you to consider.
This guide explains why loan applications get rejected, what to do next, and how to improve your chances of approval, even if you’ve been knocked back before.
Overview:
- What to do if you need a loan but keep getting declined – 6 tips
- How much does a declined loan affect a credit score?
- Can I decline a loan after approval?
- What to do after your loan is rejected by a bank or private lender
- When can I apply for a personal loan again after getting declined?
- How to improve your chances of getting approved for a personal loan
- What happens if I get approved for a loan but don’t use it?
What to do if you need a loan but keep getting declined
When you’ve been rejected, the key is to know your options and avoid applying for multiple loans at once (which can hurt your credit score). Here are six practical solutions when you need money but have been declined:
1. Apply for a smaller secured loan
Using collateral for your loan helps lower the risk to the lender and can make it easier to get approved. There are a lot of secured loans available in Australia. Make sure you compare options before deciding where to apply.
2. Take advantage of government grants and assistance
Check out the rebates and assistance available from the Australian government, especially if you’re a business owner or on a low income. If you are a business owner, you may be eligible for a government grant to help with costs or funding.
3. Explore charity and no interest loans (NILs)
NILs loans are offered by charities and some councils for specific purposes like medical expenses or essential goods. They’re interest-free and designed for Australians in financial hardship or low income families.
4. Consider a guarantor loan
A guarantor with a strong credit history can boost your approval chances. But remember that they’ll be responsible for repayments if you can’t pay. So be careful before you ask someone to be your guarantor and make sure you both understand the risks.
5. Talk to a loan broker
A personal loan broker can be helpful if you keep getting declined for a loan. They review your finances and match you with lenders more likely to approve your application, saving you from multiple rejections. They’ll also be able to give tailored loan advice on what to do to improve your chances of success.
6. Apply for a bad credit loan
Declined because of a bad credit rating? Bad credit loans are designed to cater to a wide range of credit scores. They typically have more flexible criteria but often come with higher interest rates. Make sure you understand the total cost before committing and consider all your options.
How much does a declined loan affect your credit score?
Worried your credit score is taking a hit because of a recent loan application rejection? Don’t be. A rejection itself won’t appear on your credit file. But the hard enquiry made when you apply will appear.
Hard enquiries happen when lenders access your credit report to assess your eligibility and creditworthiness. Too many enquiries in a short time can temporarily lower your score, which could impact your eligibility further. That’s why it’s important to do your research before you apply for a loan.
Can you decline a loan after approval?
Yes, if you decide not to proceed after all, you don’t have to sign the loan agreement. Just let the lender know you are no longer interested and would like to withdraw your application.
Some lenders may also offer a ‘cooling-off period’ that allows you to back out of a loan agreement after you have signed it, within a certain amount of time.
What to do after your loan is rejected by a bank or private lender
There are a few questions you should run through if you still need finance after being declined for a loan. They will help you narrow down your options and consider your next steps.
Key things to consider when you need a loan but keep getting declined:
- Why were you declined? Knowing where the issue lies will help you better prepare for your next loan application.
- How much do you need to borrow? The smaller the amount the easier it will be to find alternative options.
- How soon do you need it? There are different avenues open depending on how urgently you need funds.
- What do you need the loan for? Some loan reasons are easier to get approved for than others.
If you can answer these questions, you are on your way to choosing a finance option that works for your needs and situation.
When can I apply for a personal loan again after getting declined?
If you want to apply at the same bank or lending business again, then it is best to wait at least 30 days to give time for your circumstances to change. Every business will have different restrictions around this, so check their specific requirements before you attempt to reapply.
How to improve your chances of getting approved for a personal loan
If alternative finance options don’t appeal to you, then work on improving your chances of approval. Below are some common methods for giving your creditworthiness a boost:
- Wait a few months before reapplying
- Reduce spending to improve your debt-to-income ratio
- Use less of your credit card limit
- Stay in the same job for stability
- Add a second income stream
- Pay all bills on time
- Clear overdue accounts
- Build a stronger credit history
- Apply for a smaller loan amount
What if you get approved but don’t use the loan?
If you do not use the loan funds, then you are better off repaying the loan as soon as possible to avoid paying more on interest. Check your loan terms first to make sure you won’t be charged an early repayment fee.
Need a loan but keep getting declined? Swoosh could help
At Swoosh Finance, we help Australians, even those with bad credit, find quick, flexible loan solutions. With our 100% online process and fast turnaround, you can apply from anywhere in Australia and get an answer quickly.
✅ Bad credit considered
✅ Fully online application
✅ Fast approvals
Apply now with Swoosh and see how easy it can be to get approved.
