My personal loan application was declined. What can I do to increase my chances of being approved next time?

There could be several reasons why your recent application was rejected. Some of the common reasons are:

• Inability to service the debt
• Poor credit history
• Unstable work history

Having your personal loan application declined can be disheartening, but it's a good opportunity to reassess and improve your financial situation, so the next time you apply you’re more likely to be approved. Here are a few things that you can do to help strengthen your next application and get you on your way towards a healthier financial future.

Create a Budget: Making a budget could help you cut down on unnecessary expenses and put that money towards paying down debt or building an emergency fund instead. This will help you understand whether the additional debt is affordable.

Improve your credit score and pay down existing debts: There are several ways you can improve your credit score, including making timely payments and reducing outstanding loan balances. Missing payments are flagged with the credit bureau and may impact your chances of being approved for a loan in the future.

Monitor your progress: It’s a good idea to have financial goals for you to work towards, and to regularly review these to see how you’re going.

If you had a recent application declined, we suggest you focus on improving your financial situation before reapplying, as any additional applications are unlikely to be approved. The exception is if you have a strong payment history and are applying for a loan amount smaller than previously.

For more tips, tools and guides on budgeting, saving, borrowing, visit our managing your money webpage.