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6 Easy Steps To Avoid Loan Rejection



6 Easy Steps To Avoid Loan Rejection

6 Easy Steps To Avoid Loan Rejection

If you have been applying for loans but it always returns rejected or you are planning to apply for a loan, you are at the right place, as we will be walking you through easy steps on how to avoid your loan from being rejected.

As we all know starting a business or any project is impossible without funds, even if you have a job, your savings might not be enough since we have other needs, so taking a personal loan is one of the easiest ways to secure short-term finance to kick-start that project.

You may also want to read How To Avoid Your NMFB COVID-19 TCF Loan Application From Returning Rejected


It can be, however, disappointing to get your request for a loan rejected, especially after going through the tedious processes. Loan rejection is never a good thing, which is why you should know how to avoid it.

Below are 6 steps on how to avoid loan rejection:

6 Easy Steps To Avoid Loan Rejection

Things to take note of to avoid personal loan rejection include:

1. Meet the Credit Requirement

Credit is one of the principal factors considered before granting a loan request, and each lender has its credit requirements. It is crucial to check your prospective lender’s credit requirements and ensure that your credit score is up to par as a high credit score improves your chances of getting the loan. Note: Your Credit Score is a number from 300 to 500 that depicts your creditworthiness.


2. Meet the Minimum Income Requirement

This refers to the minimum amount of money you earn regularly. Most lenders have a minimum income requirement to ensure that you can financially pay back the loan at the stipulated time. Some loan companies in Nigeria may require your employment history for a certain period, so be sure you have a stable source of income as it increases your chances of being granted a loan.

3. Have an Equivalent Collateral

Collateral is something that you pledge to forfeit if you default in paying back a loan. When applying for a loan, lenders will require equivalent collateral as a guarantee because it lowers the risks they face. Collaterals could be in the form of liquid assets or property, and to avoid getting your loan request declined, ensure you have a sufficient guarantee.

4. Debt-To-Income Ratio

A Debt-To-Income ratio is a way of measuring how much you can afford to borrow. A high DIT means that you are borrowing more than you can pay, which is not a good sign for lenders. Before you apply for a loan, try to clear your outstanding debts as most lenders will check your credit history before considering your request. You should also ensure that your Debt-To-Income ratio is less than 43% because it shows that you can financially pay back at the stipulated time.

5. Provide the Requirement Document

Your lender will require you to provide some documents as part of your application. These documents include; bank statements, bank payslips, a copy of a valid ID, a letter of undertaking, and any other as specified by your lender. Be sure to fill in the correct details and verify your documents before submission.


You may also want to read Benefits of Using Loan Calculator When You Apply For Loan

6. Stay Away from Frequent Job Changes

Another parameter often factored in by lenders while evaluating personal loan eligibility is the applicant’s employment stability. “Since the practice of changing jobs quickly may be considered as a sign of career instability by the lenders, they may hesitate to lend to applicants who frequently change their jobs.


There is no guarantee that your loan request will always be successful. You may meet all the requirements the lender sets and still get a rejection. In reality, it is at the lender’s discretion. However, you still have to do your own part and avoid mistakes that lead to your loan request rejection.



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