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1 year ago

Denied a Personal Loan? Tips to Get Approved Next Time!

by Vinicius Rocha

Denied a Personal Loan? Tips to Get Approved Next Time!

We all know the feeling of rejection. You’re ready to put your life on the line, you decide to face the challenge presented to you head-on. You may have honest intentions and you may in fact be the perfect person for that challenge. Yet still, you are rejected. Whether we’re discussing high school romance or your financial solvency, the game remains very much the same. A bank or alternative lending institution might have missed a great opportunity by rejecting you yet only you are aware of that.

When trying to prove yourself, you attempt to stress your positive qualities: trustworthiness, intelligence, perseverance, compassion, etc. If words fail, actions speak louder than anything else. Actively improving your standing, putting in the effort to change how you are perceived so that you really do not only talk the talk but also walk the walk.

Why Personal Loans Can Be So Tough

Personal loans are a very attractive option because of their “get money quick message”. Lenders don’t just simply give out money because they’re so generous, at the end of the day, they still want to make a profit. The reason you may be having issues with applying for a personal loan can be many but let’s look at one that is not often talked about.

Secured vs. Unsecured Personal Loans

The decision that lenders take on whether or not to dole out money is linked to the risk they partake in. If a client is deemed risky, that means that they are less likely to pay off the loan in the time allotted. A less risky client is one that is far more likely to pay off the loan in the given timeframe without problems. 

What some do to lessen the risk that creditors need to take to have an easier time applying for their loans is to have collateral included in their agreement. Collateral is an item of value that is used as a pledge by the borrower that reimbursement will be offered if they are otherwise unable to pay off the loan. When a loan has collateral attached, it is considered secured. Generally, lenders tend to offer lower interest rates and more generous terms for those seeking secured personal loans rather than unsecured. If an individual with a secured personal loan fails to pay off a $30,000 loan, the lender knows that they can be compensated through an automobile. On the other hand, if an individual with an unsecured personal loan is unable to pay back the loan, the creditor is left with nothing to get their money back.

Some Tips on How To Improve Your Chances

  1. Secured Assets Not Enough: If the collateral or lack thereof is deemed not enough to cover your loan, you may get rejected. Certain lenders have specific requirements on the types of assets that can be used to secure a loan and if yours doesn’t meet that standard, your chances of rejection are quite high.

  2. Larger Down Payments: One of the simplest ways to increase the chances of receiving a personal loan is offering up a larger down payment at the start of your term. Offering a larger down payment gives the lender more confidence in your ability to pay back the loan, thereby not only allowing you to be accepted but also being more lenient in the terms and conditions by offering a lower interest rate on the principal sum.

  3. Stable Employment History:  Creditors above all else favour consistency and stability. An individual with a long employment history with money getting deposited directly into their bank account at a fixed rate such as with a salary lets the lender know exactly what its capacities are. On the other hand, an individual with work that offers unequal payment or troubles with employment in the past can have their chances severely hurt.

  4. Pay Off Existing Loans: If you already have many loans taken out that you still haven’t paid off, applying for another one can be challenging. The most important step to take is to focus on paying off old debt. As interest rates accrue, you’ll end up paying more and more on interest making lenders even warier about lending you money.

  5. Income to Expense Ratio: Most lenders will have a certain threshold that a client needs to meet in order to be approved for a personal loan. This threshold is set to match the minimum monthly payments required to pay off your loan and if your lender deems your income to be unsatisfactory, you may be rejected. However, the most important is the amount you have leftover to pay off the loan. Cutting back on spending and saving in your daily life to have the money left over at the end of the month will give your lender confidence in your ability to repay them.

  6. Reasoning Behind Your Loan: Many lenders will have restrictions on how the funds from their loan can be used. If it is discovered that you are planning to use the funds for some other purpose and that the purpose of your loan is uncredible, you may get rejected. Always make sure to read through the agreements before applying so that you can always have the necessary details checked over to not get rejected because of a clause written in the fine print.

The Advantage of Personal Loans

The beauty of personal loans is that unlike other types of credit, they are less picky when it comes to restrictions. For those whose credit history has suffered in the past or those who already have a lot of debt and require a personal loan for debt consolidation purposes, finding a bad credit loan might be your only chance.

Luckily, personal loans also are generally reserved to be used at the borrower’s discretion. This means that unlike with other forms of credit, you won’t be questioned on what you plan to use funds for. At MagicalCredit, we are committed to helping those in need of bad credit loans, whatever your reasons at interest rates as low as 3.4%! Go to to fill out a 5-minute application and get approved today!


Magical Installment Loans: We offer installment loans in the amount of $1,500- $20,000 that have a 12-60 month term with an APR 19.99% min - 46.8% max. On $1,500 borrowed for a 1 year term at 3.9% per month, the total cost of borrowing including a $194 fee is $896.00. The total amount to be paid back with interest and fee is $2,396.00. AB License #349796 and BC License #83626

NOTE: Our installment loans are open, so you can pay off your loan at any time with no penalty. You will only pay interest up to the date you pay it off.

Magical Cash Loans - Ontario, British Columbia, Northwest Territories, Nunavut, and Yukon Residents only: We offer Magical Cash Loans in the amount of $100-$1,500.00. The cost of borrowing is $15.00 per $100.00 for each $100.00 borrowed. On a $1,000.00 loan for 14 days, the cost of borrowing is $150.00. The total to payback is $1,150.00 which is an annual percentage rate of 391.07%. ON License #4741412. BC License#85919.

The Loan must be paid in full by the end of term, no extensions or exceptions, no automatic renewals. Failure to pay your debt on time will impact your future credit with Magical Credit Inc. and other credit lenders. All delinquencies will be reported to the Credit Bureaus.

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