Been Declined?

Have You Been Declined For A Loan?
Being declined for a loan happens more frequently than you might think and there are a variety of reasons that it happens.
Does a decline from one lender mean that you won’t be able to get a loan? Not at all, more often than not we are able to secure a great loan, with minimal fuss.
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Why Do Loans Get Declined?
There are many reasons why loans are declined. In many cases, the reason is simply because lenders have different lending policies applications are declined simply because they do not meet the lender policies at the time. The different lender policies mean that it is important to apply for a loan from a lender who will meet your specific requirements.
If you have been declined it can be disheartening, but it definitely does not mean that there are no finance options available.
Proteger Financial Solutions can step in to make your lending journey smoother.
Some specific examples of this are:
Self Employed
Lender policies for the self-employed vary significantly, some take the average of the last three financial years’ financial result, some take the lower of the last three years, others use the current year in isolation. The different policy approaches create significantly different results when we look at the borrowing capacity of self-employed individuals.


Recent change of job, or changes of circumstances
Lenders have different policies around ‘continuity of employment’. It would not be unusual for someone to change jobs, to get a better job, but a specific lender will not approve a loan because they require a minimum time in the current job. Thankfully, not all lenders are the same and there are many options when it comes to recent job changes.
Previous financial hardship due to ‘life circumstances’
Life can be a rollercoaster at times due to many reasons. During tough times, there are occasions when payments can be made a little late, or they need to be deferred for a period of time. Unfortunately many lenders have little sympathy for life events and will simply not lend money where there is evidence of any prior hardship. There are a range of lenders who take a more practical approach to changing life circumstances and they will continue to lend money on the merit of the application, not based on previous events that have passed.


Income that is based on bonuses or commissions
Not all jobs pay a regular salary on a weekly, fortnightly or monthly basis. Some jobs include overtime, shift penalties or allowances. Lenders will treat these ‘irregular incomes’ very differently and the effect on borrowing capacity can be massive.
Borrowers who are approaching retirement who do not meet strict ‘retirement exit plan’ policies
Home loans are generally for a 30-year term. The standard retirement age (depending on your date of birth) is 67. This means that some banks require a retirement exit plan from the age of 38. Some banks will accept the sale of the property (downsizing), some won’t accept a property sale. Other banks will accept the use of super to repay the loan, others won’t because they deem that super should be used for retirement income.

Benefits Of Using A Proteger Finance Broker
If you have been declined it can be disheartening, but it definitely does not mean that there are no finance options available. Proteger Financial Solutions can step in to make your lending journey smoother. Here are some reasons why you should consider using a finance broker:
Our finance brokers have an in-depth understanding of the Australian lending market. We stay abreast of market trends, interest rates, and lending policies to provide you with accurate and timely advice.
Every person’s circumstance is unique, and so are your financial goals. Proteger Financial Solutions works closely with you to understand your objectives and we tailor financial solutions that align with your aspirations.
As an established finance broker, we have access to a diverse network of lenders, including major banks, credit unions, and private lenders. This ensures that you get the best possible financing options tailored to your specific needs.
Navigating the paperwork and application process for property financing can be time-consuming. Our experienced brokers simplify the process, saving you valuable time and ensuring a smoother transaction.
Partnering with Proteger Financial Solutions ensures that you have a dedicated team working towards your success. Contact us today to explore the best property financing options.
We offer a great range of home loan solutions.
FAQ's
A loan application can be declined for several reasons, including:
- Insufficient income to meet the lender’s criteria.
- A low credit score or poor credit history.
- High debt-to-income ratio.
- Unstable or non-traditional income sources.
- Property-related issues, such as low valuation or ineligible property type.
At Proteger Financial Solutions, we can help identify the specific reasons for your decline and work with you to resolve them.
Each loan application and its outcome are recorded on your credit report. A declined application may slightly lower your credit score, especially if you make multiple applications in a short time. Working with a finance broker can help you avoid unnecessary applications and protect your credit profile.
Yes, you can reapply, but it’s essential to address the reasons for the initial decline first. Our team can guide you through improving your financial profile, adjusting your loan structure, or finding a lender whose criteria align with your situation.
If your income was deemed insufficient:
- Explore lenders who consider non-traditional income sources, such as bonuses or trust distributions.
- Consider co-borrowing with a partner or family member to strengthen your application.
- Adjust your borrowing amount or repayment terms to better match your income level.
Improving your credit score takes time, but these steps can help:
- Check your credit report for inaccuracies and dispute any errors.
- Pay down existing debts to reduce your credit utilisation ratio.
- Maintain consistent, on-time payments for all bills and debts.
A high debt-to-income ratio can affect your loan approval. Consider:
- Consolidating existing debts to lower your monthly payments.
- Prioritising repayment of high-interest debts.
- Reassessing your budget to improve your financial position.
Yes, lenders may decline applications due to:
- Low property valuation compared to the loan amount.
- Property types outside the lender’s acceptable criteria (e.g., rural, high-density apartments, zoning issues, or off-the-plan).
We can help you navigate these challenges and connect you with lenders who specialise in unique property types.
Being declined for a loan can be discouraging, but it’s not the end of your journey. Here’s how to improve your chances:
- Understand the Issues: Review the reasons for the decline, such as income, credit history, or property-related factors. Our team will work with you to pinpoint and address these challenges.
- Seek Tailored Guidance: Every financial situation is unique. With expert support, you can identify lenders who are more likely to approve your application.
- Strengthen Your Application: A well-prepared application with complete documentation can significantly improve your chances of approval.
- Remember, many people secure loans after an initial decline—persistence, combined with expert guidance, is often the key.
A finance broker can turn a setback into an opportunity by:
- Navigating Complex Criteria: We specialise in matching your profile to the right lender, even for non-traditional situations.
- Strategic Applications: Protect your credit score by applying only to lenders likely to approve your application.
- Ongoing Support: From improving your financial position to navigating lender requirements, we’re with you every step of the way.
Yes, being declined doesn’t mean you’re out of options. Consider:
- Specialist Lenders: These lenders cater to applicants with unique financial circumstances, such as non-traditional income or prior credit issues.
- Loan Structure Adjustments: Options like reducing the loan amount or changing repayment terms can make approval more achievable.
- Low-Doc Loans: For applicants with non-traditional income, low-doc loans provide an alternative solution.
At Proteger Financial Solutions, we specialise in helping clients explore these alternatives and secure the right solution for their needs.
Self-employed applicants may face additional challenges with income verification, but solutions include:
- Using low-doc loans that accept alternative income documentation.
- Providing comprehensive financial records to demonstrate income stability.
- Working with lenders who specialise in self-employed borrowers.
- Please refer to our “Business Owner/ Self-Employed” page for more detail.
Yes, some lenders offer loans to individuals with previous bankruptcies. While terms may vary, we can help you find lenders willing to work with your circumstances and provide strategies to rebuild your credit profile.
Being declined for a loan can feel overwhelming, but it’s important to remember that many people face this challenge. It’s also worthwhile to remember that it is not necessarily your fault. Often, declines occur due to a lender’s lack of understanding or experience with unique financial situations. By taking the right steps—like addressing the reasons for the decline and seeking expert guidance—you can turn things around and achieve your goals. With the right support, a successful outcome is still within reach.
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