Don’t worry if a microfinance organisation rejects your online loan application. Of course, you may not meet the requirements of the large microfinance organisations, in which case you should simply consider other lending services. Nowadays, there are many organisations that offer short term loans. Some of them have very favourable and flexible loan terms, both in terms of the requirements for the borrower, as well as the interest rate, the possibility of changing the payment date and various promotions.

Why can a loan be refused? Some reasons

A loan can be refused for a variety of reasons, and it’s important to understand why this may happen in order to improve your chances of approval in the future. Here are some common reasons why a loan may be refused:

1. Poor credit history. Lenders often check your credit score and credit history to assess your risk as a borrower. If you have a low credit score or a history of missed payments or defaults, you may be considered a high-risk borrower and your loan application could be denied.
2. Insufficient income. Lenders want to ensure that you have enough income to repay the loan. If your income is too low or unstable, the lender may refuse your application.
3. High debt-to-income ratio. If you already have a significant amount of debt compared to your income, lenders may be concerned about your ability to take on additional debt. A high debt-to-income ratio could lead to a loan refusal.
4. Incomplete or inaccurate information. Providing incomplete or inaccurate information on your loan application can raise red flags for lenders. Make sure to double-check all the information you provide to avoid any issues.
5. Unstable employment history. Lenders prefer borrowers with a stable job and employment history. If you have a history of frequent job changes or unemployment, it could impact your loan approval.

How to increase your chances of loan approval

Consider the following advice.

1. Improve your credit score. Work on improving your credit score by making timely payments, reducing outstanding debt, and checking your credit report for errors.
2. Increase your income. Consider ways to boost your income, such as taking on a part-time job or freelancing, to show lenders that you have the means to repay the loan.
3. Reduce debt. Paying down existing debt can lower your debt-to-income ratio and make you a more attractive borrower.
4. Provide accurate information. Double-check all the information on your loan application to ensure it is accurate and up-to-date.

If you got a refusal in the bank, just go to a microfinance organisation

If several banks for various reasons refused you a loan, do not despair. The conditions for getting a loan from a microfinance organisation are not as strict, so you have a much better chance of getting money. Microfinance organisations provide loans to Filipino citizens with an average age between 18 and 70 years old. All you need to apply for a loan is your passport, mobile phone and bank card. Microfinance organisations offer promotions very often: if you apply for a microcredit for the first time you do not have to pay interest.