Can’t I Get A Loan? | Find Out Why & How To Get Approved

Why can’t I get a loan?

Many factors affect whether your application for a short-term loan is approved. Approval isn’t guaranteed, and you may even have been approved for a similar loan in the past. It’s easy to panic, but the first step to moving forward is to try to understand why you may have been rejected for a loan in the first place. 

At The Money Shop, we specialise in introducing customers to a loan that’s right for them. Our handy guide has been created to help you discover why you might have had your loan application rejected and what you can do to improve your chances of approval in the future so you can secure the financial help you need.

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Can I get a credit card when I have bad credit?

Yes, some lenders offer a credit card for people with bad credit and are more likely to accept your application even if you have a poor credit history. In some cases, these cards act as a lifeline by providing much-needed credit to people who are otherwise overlooked, allowing you to prove that you are now able to repay your debts on time. There is still no guarantee that your application will be accepted, so it is important to choose the card that offers you the highest chance of approval, allowing you to avoid any further negative impact on your credit score. If you are considered eligible for several cards, it is important to choose the option that will give you the greatest chance of boosting your finances. For example, a card that offers 0% interest on spending for a certain period could give you the chance to temporarily avoid interest and use this money to clear current debts. 

Your questions, answered

Once you have a better understanding of why your application was rejected, there are a few steps you can take to improve your chances of securing the money you need in the future. We have put together four top tips that you should consider when hoping to improve your chances of securing a loan: 

    1. Fixing mistakes in your credit history

      If you have been rejected for a loan based on your credit file, you should be given the name of the credit reference agency that provided the lender with access to your credit history. You can then approach that agency to ask for a copy of your file. Sometimes there are mistakes in credit files so if you do think something isn’t right, get in touch and ask for this to be corrected. Lenders won’t always agree to the changes you have requested. However, if you still feel there is a mistake, you can attach a note, known as a Notice of Correction, to explain why the item in question isn’t an accurate representation of your spending behaviour. If you are not sure whether your history is correct or not, speak to a financial advisor who can help you dig deeper into your credit record. 

    2. Don’t rush into a new application

      Try to avoid applying for several loans in a short space of time, particularly if you are applying to many different lenders. Every time you apply for a loan – whether you are successful or not – your application will appear in your credit history as some lenders issue a hard credit search when you apply. If your file shows that you have made several applications in a short space of time, lenders may be concerned that you are struggling financially and, therefore, unable to repay any loans. This can further damage your credit rating and may reduce your chances of succeeding with your next application. 

    3. Build your credit rating

      If you believe your credit rating could be the reason that you can’t get a loan, there are several steps you can take to build your credit rating. Typically, borrowers often begin by tackling unpaid debts, closing any unused accounts, avoiding any missed account payments and demonstrating reliability by taking out an affordable credit card. However, if you’re unsure what method would be best for you or you feel you need to build your credit rating quickly, it might be a good time for you to talk to an independent financial advisor. Several organisations provide free, impartial advice that could help you get on top of your finances and even add to your savings so you can enjoy a more stable financial future.

    4. Consider whether a loan is right for you

      You should also consider whether a loan is really necessary. There are some things in life you can’t bargain for, such as a broken boiler or a car breakdown. But expenses, such as house extensions or upgrading electronics, are often unnecessary costs that can be postponed if you are struggling to get the loan you need. If you can, consider spending a few months putting spare cash aside to cover the costs instead, or perhaps approach a friend or family member who would be willing to lend you what you need temporarily. 

    5. Ask yourself some important questions before applying for a loan

      Before deciding to submit a loan application, try asking yourself the following questions:

      • Why do I need to borrow money?
      • How much do I need to borrow?
      • Can the expense wait until I have increased my savings?
      • Could a friend or relative help?
      • If I borrow money, will I be able to afford the repayments?

If you feel you may struggle to repay a loan or believe the expense can wait, you may feel more comfortable approaching someone you know to borrow money or simply boosting your savings ahead of making a purchase. However, if none of these options are right and you are sure you can consistently afford the repayments, borrowing money could still be the right solution for you.

Before you apply for a loan through The Money Shop, you should check that you are eligible. To have your application accepted, you will need to be:

  • Over the age of 18
  • Living in the UK and able to provide a three-year address history
  • Able to prove a regular income
  • A UK bank account holder
  • Able to provide a working email address and mobile phone number

Once you have confirmed your eligibility and you are ready to apply, simply fill in our short form and tell us how much you need to borrow. Then select your preferred repayment terms to tell us how quickly you would like to pay back your loan. Our broker partner’s panel of lenders provides instant decisions, so you could have the money you need quickly if you are accepted for a loan. 

Whenever you choose to take out a loan, you are required to pay back to money in line with the terms set out by your repayment schedule. Before you commit to taking out a loan with any lender, you will have the opportunity to consider the details of your repayment schedule and make sure you can meet your repayments. Each payment you make will contribute to repaying the loan you have taken out, as well as some additional interest. If you feel at any point that you would like to pay your loan off early, you can do so quickly and simply via your online account.

If you fail to keep up with your schedule as planned, you may be required to pay a penalty, increasing the total amount of money you owe and could impact your credit score. To avoid this, you should take the time to consider your finances, both now and in the future. If you are still unsure whether you will meet your repayment obligations, don’t forget to check how much it will cost you to borrow the money you are applying for. 

Several of our customers have already been rejected for loans due to bad credit, but their flexible approach means our broker partner works with lenders who can provide small, short-term loans to people from all financial backgrounds. There are no hidden fees – simply enter the amount you would like to borrow and how long you would need to pay the loan back. Your repayment terms will be clearly explained before you commit to your loan, so you can take the time to understand how it might affect your finances in the near future. Better yet, lenders won’t complete a full credit check until you have been provisionally accepted, so you can explore your options without fear of affecting your credit history. 

Thankfully, a rejected loan application doesn’t have to be the end of the road. By taking the time to understand your financial position and explore your options, you could soon have the money you need to cover your expenses and give yourself financial peace of mind once more. 

If you still have questions about borrowing money from The Money Shop and would like to speak to an expert, please get in touch today. Our customer service team operates seven days a week and is always happy to discuss our lending process.