Reasons You Might Be Rejected for a Loan in the UK

No one likes rejection, and it never feels good. However, if you’ve applied for a personal loan in the UK and been rejected, it might be due to a variety of reasons and factors worth considering. Whether you need to borrow £1,000 or you need a longer term loan option , you stand a chance of being rejected for any loan product. Therefore, understanding why you may be rejected can be a great help.

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Who Is Eligible for Personal Loans in the UK?

Personal loans, whether it be to finance cars, pay for home costs, or other bills and expenses, may be viable options for those that need some extra financial support during times of need. Today, everyday living costs are expensive, so a personal loan can be of help in times of financial emergency.

In the UK, people can apply for personal loans online or in person at in-store lenders. Most companies require people to meet strict eligibility criteria. For example, applicants must be at least 18 years old, live in the UK, have a regular income, and provide proof of address and ID.


If a company does not ask you to meet eligibility criteria, then more often than not, these are not trustworthy lenders. In the UK, you should also always ensure that any lender you borrow money from is authorised and regulated by the Financial Conduct Authority (FCA).

Personal loans, as the name suggests, can be used for many reasons . Whether it be veterinary bills, home repairs, or vehicle costs, personal loans are options for those that need an extra hand financially. However, many people apply for loans and are rejected, but don’t know why.

Why Do People Get Rejected for Personal Loans?

Unfortunately, not all lenders will tell you why you’ve been rejected for a loan. So, lots of people are left wondering why they were rejected for a personal loan. As a result, they will not know what they can do to improve their chance of loan approval in the future.

However, there are many common reasons you may be rejected for personal loans.

Credit Criteria

Lots of people don’t realise that not having a credit score or a bad credit score will affect a personal loan application.

For instance, most companies set out minimum credit score criteria to ensure borrowers are in the right position to be able to borrow and then repay a loan.

A credit score is a number which reflects your creditworthiness and is based on credit building habits, such as making timely payments. Building your credit score may improve your chances of loan approval.

Mistakes in Your Application

Most online personal loan applications require you to provide personal or financial information. For example, your name, address, current income, how much you’d like to borrow, and your age. If you fail to provide all of the information correctly, then it can sometimes lead to a rejected application.

Make sure everything is spelled correctly. Misspellings or mistakes can result in your application being rejected. To avoid mistakes, prepare your documents in advance prior to submitting a loan request in person. If you are submitting an application online, double-check your information before submitting.

Too Many Applications For Credit

Likewise, applying for numerous loans at once may lead to rejection. When you want to get money online through a personal loan, be sure to research companies beforehand. This way, you can compare loan amounts, rates, and terms. In turn, you can ensure the loan you are applying for is affordable and fits your needs.

Also, keep in mind that every time you apply for a loan, your credit is impacted. Numerous hard inquiries on your credit report can reduce your score. If you already have damaged credit, this can negatively affect your credit even more and lower your chances of approval.

Do you have a joint bank account with someone who has bad credit?

Unfortunately, having financial links to someone who has a bad credit score may make lenders see you as a potentially risky borrower.

To fix this, get in contact with your current creditors to complete a disassociation. Through this process, you can begin to remove yourself from joint accounts with an individual who has a damaged score. Once you have removed yourself from these accounts, you can begin to build your credit score and your chances of getting a loan.

Low Affordability

Sometimes, lenders may reject applicants who do not present adequate proof of income. This is because applicants who cannot demonstrate their ability to repay a loan present more of a risk to the lender.

When you apply for a personal loan, lenders will usually ask for your annual or monthly income to check whether you can afford to borrow and then repay the loan.

If you believe that you’ve been rejected for a personal loan due to your income, you can try applying for a smaller amount. You can also use a personal loan calculator online to check how much you can afford.

How Long Should I Wait Before Reapplying for a Personal Loan?

There is no set time to reapply for a personal loan, but waiting at least three months can help better your chances of future approval. While it can be difficult during a financial emergency, there may be alternative options to consider before applying for a personal loan again.

Author Maggie Clarke
Maggie Clarke Content Ops Lead
Maggie leads the content operations team at She is an expert on personal finance, by way of a lifetime of gathering practical knowledge on what to not do with your pocketbook. When not blogging about money, Maggie can be found rambling through the roughest terrains. She considers herself charming yet troublesome and would love to meet you someday, just not today.
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