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Why wasn't my loan application approved?

Firstly, we would love to see your loan approved, but there are times when we cannot do so. When looking to approve a loan, a lender considers a lot of information, including affordability (can you comfortably afford the repayments), your credit history, and other things like occupancy, employment (if working), and repayment history on other loans.

Sometimes, a lender may offer you a 'conditional' approval, but after completing a final assessment, they may deem that a loan is not in your best interests.

There are several reasons why your loan may not be approved - some of the most common reasons are:

  1. Defaults on your credit report. When you apply for a loan, we review your credit report, which includes your credit history, such as your previous credit applications and any instances of missed payments. Although we consider applications from individuals with a less-than-perfect credit history, we will evaluate all aspects of your application.
  1. Affordability. After reviewing your income and expenses, if a lender thinks you may struggle to meet your loan repayments, then it is clear that the loan cannot be approved.
  1. Suitability. If, based on your circumstances (including your current financial situation and the loan purpose you applied for), it is clear that a loan may not suit your stated needs, the loan cannot be approved.
  1. Responsible lending. Lenders and brokers are required by law to follow responsible lending provisions. This means that if you struggle to meet the repayments or the lender believes the credit is unsuitable for you; you will not be approved. The purpose of this is to ensure the loan is appropriate for your requirements and objectives.
  1. Potential risk of default. All credit providers are responsible for managing their own risk profile. If, based on the information provided in your application, there is a clear potential risk of default under the terms of your loan agreement, your loan will not be approved.

At Safe Financial, we assist thousands of Australians every year with both good and bad credit. Unfortunately, we are not able to help everyone.

What other options are available to me?

Contact a debt specialist to discuss your situation and explore potential debt-elimination options without taking out a loan.

Some of these options include Pay-In-One or a Debt Agreement, which you may not have considered before. A debt specialist can help you identify other options that are suitable for your situation.

Did you know there are interest-free ways to combine all your debts into just ONE affordable repayment?

Learn More

What can I do to improve my next loan application?

Before taking out another loan, consider if it's the best solution for your financial struggles. While a loan may be helpful for small and urgent money problems, it may not address the bigger picture.

  1. Obtain a copy of your credit report. An incorrect or poor credit report can negatively affect any loans or credit you may apply for in the future - so you need to make sure the information contained in it is accurate. You have the right to access your credit report, review it and correct any wrong information. For more information about obtaining and reviewing your credit report, visit www.mycreditfile.com.au.
  1. Create a budget. Setting a budget for your household expenses and sticking to it will undoubtedly save you money. If you get into the habit of recording your spending, you're on the way to taking control of your money. If you stick closely to your budget, you can build up savings to show credit providers that you can repay any future loans. 

Other useful links

Savings goal calculator — determine how long it will take to reach your savings targets.

Budget planner — work out your current spending and how much you can afford in repayments.

Credit card calculator — work out how long it will take to pay off your credit card.

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Warning - Do you really need a loan today?

It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.

Check your options before you borrow:

  • For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor
  • Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan
  • If you are on government benefits, ask if you can receive an advance from Centrelink: Phone: 13 17 94
    http://www.humanservices.gov.au

The Government’s MoneySmart website shows you how small amount loans work and suggests other options that may help you. https://www.moneysmart.gov.au/

This statement is an Australian Government requirement under the
National Consumer Credit Protection Act 2009.

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