Could My Loan Application Be Denied?

Author · Modified on 14 September, 2022

Yes, it is possible that your loan application will be denied. This could happen due to poor credit history, lack of income, lack of collateral or high debt-to-income ratio.

Applying for a loan can be urgent if you have an emergency, without even thinking that your application to borrow money may end up being rejected.

This guide will help you to understand why your loan application might have been denied and give you some ideas for the future when applying for credit.


Your loan application may be denied because of poor credit history, lack of income, lack of collateral or high debt-to-income ratio.


Why Was My Loan Denied?


  • Your details are false/inaccurate/you have applied with someone else’s details
  • You do not meet the lender’s criteria
  • Your credit score is not strong enough
  • Your income is not high enough
  • You have asked to borrow too much
  • You are not employed or your income is not stable enough
  • You have too many open debts, missed repayments
  • You have no permanent address
  • You cannot afford to repay the loan based on the lender’s checks


The most common reasons why loan applications get rejected include a bad credit score or lack of verifiable income. Lenders will not tell you why you have been denied, but this is a very common reason. However, every lender is different, which is why this may vary from lender-to-lender, with some requiring a minimum income of $500 and some may require as a much as $1,000.

One of the first things to look at is if you meet the basic criteria, which is what the lender usually promotes on their website such as a minimum age, income, credit status and having a bank account. If it could be your credit history, you might need to looking at ways to improve your credit score or getting a regular source of employment or income.


Bad Credit History


When you apply to take out a loan, the lender is typically required to look at your borrowing history in order to assess whether they are able to grant you a loan. This is usually reflected in your credit score.

Lenders will be looking to see a strong history of borrowing and repaying loans. This can sometimes be an issue if a borrower hasn’t borrowed money in the past, or has experienced problems when attempting to repay loans on time.

If this is the case, it is possible that your loan application will be rejected by the lender. In order to avoid rejection, applicants should try and maintain a good credit score, avoid borrowing money where possible and always make repayments on time if they have agreed to borrow money from a lender.

However, even if you have an imperfect credit score there are options available to you. Many lenders and brokers pride themselves on helping those who would struggle if every loan decision rested on having a strong credit score. At Dime Alley, we are committed to finding a loan for you, even if your credit score isn’t your strong point.


Lack of Income


One of the key agreements when taking out a loan from a lender is the dates which the loan will be repaid by. In order to ensure that all applicants will safely be able to pay back any money owed, lenders must ensure that the minimum monthly repayments can be made by the borrower.

If the lender decides that an applicant will be unable to repay the loan on account of a lack of regular income, they can reject the application. This may either be because the applicant does not earn enough money or because their income cannot be verified through the information provided.


High Debt-To-Income Ratio


A debt-to-income ratio compares how much money an applicant owes every month alongside how much an applicant earns on a monthly basis. Most lenders will asses the debt-to-income ratio of an applicant to ensure that they will be able to repay the loan.

If the lender does not believe that the applicant is capable of repaying the loan due to this ratio being high, the loan application will usually be rejected.


How Can I Get a Payday Loan?


Applying for a payday loan with Dime Alley is easy, and there are just 4 things you need to be eligible for your payday loan.

  • You must be a US citizen
  • You must be over the age of 18
  • You must have a regular income of at least $800 a month
  • You must have a current account

Although there is no guarantee you will be accepted for a loan, with Dime Alley we do offer loans to people with bad credit and a variety of backgrounds, so as long as you meet the above criteria, feel free to apply!




I Was Denied For A Payday Loan, What Are My Options?


If you’ve been denied for a payday loan, do not worry! There are other options available to you.

Firstly, you could ask for an advance on your next paycheck. This would mean getting in contact with your employer, explaining your situation and asking for all or a part of your next paycheck early. If you are receiving benefits, it is also possible to ask for an advance on your benefits.

Another option would be to open a credit card. Opening a credit card would mean having access to funds quickly, and then having to pay them off at the end of the month. It is important, however, that you keep on top of your credit card payments, as the bills can mount up and leave you with an unwanted debt.

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