Rapid Finance on 16 June 2022

Whatever type of loan you’re applying for, there are so many factors that can impact whether or not you get approved. Getting a loan declined is a double-whammy because it means you don’t get the funds you need, but it can also look bad on your file and impact your chances of getting approved for credit down the line. 

At Rapid Finance, we specialise in helping people needing loans with bad credit find solutions that could work for their unique situation. Although there are never guarantees when it comes to getting your loan application approved, there are things you can do to up your chances. 

So what are the biggest loan decline reasons out there that you need to know about?

Poor credit history and spending habits

In terms of your credit history, whether you’ve taken out loans before and have missed repayments, or have just applied for too many loans, it can show up on your credit history. But did you know that credit checks are actually not the biggest reason customers get their loan applications declined? 

Often, at Rapid Finance, we can work with customers to help improve their credit score, but what can really stand in the way is bank statements. 

When assessing your loan application, lenders can request bank statements from you to investigate your spending habits. Red flags could include spending thousands of dollars on gambling or an expensive shopping habit.

The other big ticket item that is often an issue, is bank account conduct, such as dishonours on direct debits. If you are constantly not managing your money well and dishonour (or bank reversing the transaction due to insufficient funds), that can often lead to a decline. 

When a lender looks at your bank statements, and they see dishonours, the first thing that goes through their mind is whether their payment is going to dishonour (or even bounce) as well? A lender likes to set up a loan and for it to run smoothly. If they have to constantly chase you because you are dishonouring, it starts to cost them money. Rapid Finance can generally get some dishonours over the line as long as they are not too critical and there is a good reason.

Your income is too low

When you apply for any type of loan - whether it be a car loan or a personal loan, you may need to show bank statements to prove what you earn. Depending on the loan amount, there will be a minimum amount that you have to earn before a lender approves your application. The minimum amount differs between lenders, but if they have reason to believe that you won’t be able to pay back the loan comfortably, then you’re likely to get declined. 

In the same way, if your income is unstable (it could be irregular casual or sporadic work), you may also get declined. Instability can also include self-employment and if you’re still on probation, depending on the rest of your overall profile.

You already have too many loans

When lenders like banks need to decide whether or not to grant you a loan, they’ll generally look into all of your expenses - and that can include other loans. Most people will have other open credit accounts such as a mortgage or credit cards, but if you have multiple loans owing substantial amounts, they might be reluctant to lend to you. 

Payday loans are looked on particularly negatively, as it can look like you’re desperate for a loan and willing to pay the high fees for it. Even enquiring about a payday loan can impact your credit score – this includes MyPayNow and Beforepay.

If you’re worried about your credit score and would like a free finance assessment, call Rapid Finance on 1300 467 274 to see if we can help you. Our expert team has more than a decade specialising in car loans, home finance and so much more. Don’t forget, our credit check does not affect your credit score!

You don’t have all the necessary documentation

When applying for a loan, you’ll need to supply a range of documents, including:

  • Your name, age and address

  • Your occupation

  • Proof of your income

  • If you have any dependants

  • Your assets and liabilities, including shares and investments

Need Help??

Everyone’s financial situation is different, which is why at Rapid Finance, you get your very own finance specialist to work on your behalf. We’ll do all the legwork for you - from gathering and reviewing your documents to pinpointing your financial strengths. Call Rapid Finance today for your free financial assessment. 

On a side note, don’t forget about our wholesale cars. We offer a one-stop shop to help you source a vehicle through our extensive wholesale network.

Through our network, we will do some extra checks on your behalf, as well as inspecting the vehicle to ensure it’s a great vehicle.

We will also check :

  • There is no money owing on the vehicle

  • The vehicle has not been a repairable write-off

  • The vehicle has not in any serious accidents 

  • We will check everything works on the vehicle 

  • We will get the roadworthy for the vehicle

  • We will do a detailed inspection on the vehicle 

Find out more info about our Wholesale Network.


Give us a call on 1300 467 274 or apply online today.