Here are several reasons why you may not have qualified for a Personal Loan:
1. Your credit score was too low:
When a lender reviews your Personal Loan application, it takes into account your income as well as other details like your credit score. Lenders can learn how you handle your finances based on your credit score. Your payment history and the amount owed are important credit factors.
2. Your debt-to-income ratio was too high
This DTI ratio compares your monthly debt total with your monthly gross income. For example, if your monthly debt payments are $6,000 and you divide that by your monthly income of $10,000, then your DTI ratio would be 60%. A high ratio could signal to lenders that you might struggle to afford debt repayment.
3. You tried to borrow too much
A lender might reject your application for a Personal Loan if you try to borrow more money than you can afford to repay. The lender bases the approved loan amount based on your income and other debt obligations.
4. Your income was insufficient or unstable
Lenders look at your income to determine whether you can afford to repay the loan. In essence, they want to be certain that you can afford your monthly payments and won't let them down by not making them. The lender may deny your application if they determine that your income is too low for the amount you want to borrow or if it fluctuates from month to month.
5. You didn’t meet the basic requirements
Every lender sets its own requirements, but here are some basic requirements that many lenders use:
- Minimum age of 18 years or older
- You’re a U.S. citizen or permanent resident
- You’re employed with a valid bank account
6. Your application was missing information
Before submitting your application read over and double-check that you have uploaded the correct supporting documents.
7. Your loan purpose didn’t meet the lender’s criteria
You can use a Personal Loan for almost anything, but if your purpose is outside the scope of a lender’s rules, your application could be denied.