How do you get a loan when no one will approve you?

Before you apply for another loan, find out why your application was rejected. You'll be able to make small changes to help get your next application approved.

If you're finding it hard to borrow money because of your debts, talk to a financial counsellor. It's free and they can help you to get your finances back on track.

Understand why your loan application was rejected

Knowing why your application was rejected will help you to improve your next application.

Lenders have to lend money responsibly. They can't lend you money if they think that you won't be able to make the repayments. They also have to tell you if they reject your application because of your credit report.

A lender may reject your loan application for one of these reasons:

• There are defaults listed on your credit report — that is, overdue payments of 60 days or more where debt collection has started.
• Your credit report lists repayments that are more than 14 days overdue.
• After considering your income, expenses and debts, the lender thinks you may struggle to make the repayments.
• You don't have enough income and savings to show you can pay off the loan.

Improve your next loan application

Applying for a few loans over a short period of time can look bad on your credit report. Follow our steps to help get your credit score back on track and improve your chances of getting approved.

1. Get a copy of your credit report

Check that your credit report has no mistakes and that all the debts listed are yours. Get the credit reporter to fix any wrong listings so these don't lower your credit score.

2. Pay off some debts

Keep up with your loan repayments, and make extra repayments where you can. You'll pay off your debts faster and save on interest. See get debt under control to know which debts to start with.

3. Consolidate your debt with a lower interest rate

See if consolidating and refinancing debts can help to reduce your interest payments.

4. Create a budget

Credit providers look at your income, expenses and savings to see whether you can keep up with loan repayments. Start a budget to see what you're spending and where there's room to save. If you grow your savings, it'll be easier to take out a loan and keep up with the repayments.

Having a guarantor may help you to get approved for a loan. But it can be risky for family or friends who go guarantor on the loan and can affect their financial situation.

Other options for getting a loan

There are services and community organisations that can help if you need a loan.

Apply for a low interest loan

You can apply for a no or low interest loan if you're on a low income and need money for essentials, like a fridge or car repairs.

Advanced Centrelink payment

If you receive Centrelink payments, you may be able to get an advance payment. This can help you to cover an unexpected cost in the short term without interest or fees.

Get urgent money help

If you're in a crisis situation or struggling to pay for everyday expenses like food or accommodation, get urgent help with money.

Alisha's car loan

Alisha wanted to buy a used car, so she applied for a $10,000 personal loan at her bank. Her job in retail paid enough to cover her rent, bills and the loan repayments.

But the bank rejected her application, because she had no savings and a $2,000 credit card debt.

Alisha decided to pay off her credit card and build up some savings before applying for another loan.

She started a budget and tracked how much she was spending. She cancelled her unused gym membership and online subscriptions, and cut down on eating out. By making these changes, she saved $200 a week.

She used the $200 to make extra repayments on her credit card debt. When her credit card was paid off, she had more money to put towards her savings goal. These changes helped Alisha get her next application approved. 

There can be many reasons why you might want to take out a personal loan. Perhaps you’d like to buy a car, consolidate your debt, improve your home, go on a holiday, or you are getting married.

Whatever the reason, a personal loan can be a great way to help you achieve your dreams sooner.

Below are a few tips you can do to improve your likelihood of getting the funds you need approved.  

1. Make sure you meet the criteria

No matter which of our personal loans you’re applying for, you need to:

• Be at least 18 years old
• Hold Australian or New Zealand citizenship, or Australian permanent residency, or an eligible visa (call us on 13 1431 to find out more)
• Live in Australia
• Meet minimum income requirements
• Be employed or receive regular income
• Have a good credit rating
• Not be going through the process of bankruptcy

2. Apply for the right amount

Personal loans are meant to help you out in the short term, not leave you with long-term debt. Our borrowing calculator can give you an idea of how much you might be able to borrow given your income and lifestyle. If your income isn’t enough to support the required repayments on the amount you’re applying for, we won’t be able to approve your loan.

If things aren’t lining up, think about reducing the loan amount or extending the loan term to reduce the impact of the loan repayments on your current cash flow. If you would like to talk to someone about your options you can visit any branch or call us on 13 1431.

3. Build a good account history

If you’ve already got an account with us, we’ll have a pretty good indication of your financial situation. Managing your finances effectively will help show that you’re ready to take on a personal loan. 

If your salary is paid into your account and you’re paying your bills and putting some savings aside, it’s a good demonstration that you know how to budget and manage your money.

It’s also important not to overdraw your account. Not only will that help you avoid fees, it will also create a good account history as it shows you’re able to manage your existing finances effectively.

4. Maintain a good credit rating

Ensuring you pay things like your phone and electricity bills on time can contribute to having a good credit rating. If you have missed payments, arrears or other debt collection activities recorded by a credit reporting body this may impact your credit rating. 

You can check your credit rating and the accuracy of information held on you by credit reporting bodies through organisations such as Equifax, Dun & Bradstreet (Illion) or Credit Savvy1.

Also, bear in mind making numerous applications for loans and/or credit products with a number of lenders may also affect your chances of loan approval.

5. Show a good savings record

Another way to demonstrate you’re financially responsible is to contribute regularly to your savings. If you show you can save a set amount of money every week or month, you’re also demonstrating that you are likely to be able to manage regular loan repayments. 

Ready to apply?

If you’re ready, you can apply for a loan online at any time. If you’re already a NetBank customer it takes 10 minutes to apply through NetBank and you may receive funding the same day2.

How do you get a loan when you can't get approved?

What do you do when no one will give you a loan?

What is the easiest loan to get approved for?

Can I apply for another loan if I got denied?