Other Reasons You Could Be Denied A Loan, Asides A Credit Score
The reason a lot of people patronize logbook loans are because the lenders do not conduct credit checks and as a result, people with bad or poor credit can always have access to logbook loans. However, bad credit is not the only reason why people can be denied loans, and even though logbook lenders do not consider bad, poor or insufficient credit as criteria for granting loans, any one of these reasons can lead to a borrower’s loan application being denied.
Very sparse borrowing history
This does not apply to logbook lenders, but for many loan facilities, having very little debt can be as bad or even worse than having too many. Lenders like to see that the person is familiar with the borrowing process, especially across different credit agencies or types of credit. While you may be safe from debt problems when you pay cash for everything and never use a credit card, having some amount of credit card debt, home improvement repayments, student loan repayments etc. which you repay regularly and on time, would make it easier for a lender to grant your loan application.
NOTE: Too many outstanding loans will make a lender doubt your capacity to pay up this loan you are applying for. Before applying for a new loan, ensure you pay off as many outstanding loans as you can.
Change in income or employment status
If you suddenly lost your job before applying for a loan, it is understandable that loan facilities may be skeptical about giving you a loan. A sudden cut in your income can also serve as a red light on your loan application. This is because the borrower instantly looks financially unstable and many loan facilities will be apprehensive lending money to an unstable individual.
If you have included information on your loan application that is false accidentally or deliberately and this is discovered, your loan application will be rescinded instantly. You may even be liable to face legal action. Ensure you confirm the information in your application before you send it in. Also provide a point of reference for the lender and apply for a voter’s card or register for an election. Many borrower applications get rescinded because the lender cannot find any point of reference for the information on the application.
Your post application activities also matter
Logbook loans are typically granted within hours of application so this may not affect you, but if you applied for another loan type, acting suspiciously after the application may lead to you being denied the loan. Suspicious behavior could include; suddenly moving money between accounts, taking on more debt, closing previously open lines of credit etc.
Logbook loans remain one of the best options for most individuals. Most of these limitations which are found with other loan options are hardly ever found in logbook loans, even in the most extreme cases. If you are looking for a loan option which gives you loans with the very minimum fuss involved, then logbook loans are your best option.