How to avoid your personal loan being rejected

What you need to do to get your personal loan application across the line

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Every rejected personal loan application is listed on your credit file. Receive just one rejection and the next lender may see this as a red flag, which may be enough to reject you again. Herein lies a big obstacle. That's why it's important to learn how to avoid personal loan rejection as best you can.

While there's no fool-proof trick to being approved for a personal loan, but there are some little-known ways that you can avoid the rejection pile. Read on to find out how you can avoid your personal loan being rejected.

Young woman looking at her phone smiling

Common reasons personal loans are rejected

How to avoid personal loan rejection

  • You have bad credit history. While "bad credit" is usually pooled into one, there are varying levels of bad credit. For example, you may have never defaulted on any loans or credit cards but you might have applied for five loans in the past two months.
  • Check the credit requirements. You should check what credit rating your lender requires for its lending requirements, and then see if you meet it. If you're required to have good credit, it usually means no negative listings on your file. If you're unsure, it's best to ask the lender before you apply. The majority of lenders have online chat services that can offer assistance. You can also check your credit score with Finder for free to get an idea of your credit position.
  • Insufficient income. The lender can't approve your application if it finds that your income won't sustain your monthly repayments. Therefore, lenders usually have a minimum income you need to earn in order to be eligible for the loan. This minimum may also change depending on the loan product you're looking at.
  • Find out the minimum income. Check if there is a minimum set. The minimum income is listed on finder.com.au review pages, so you can confirm this before you apply. If there's no minimum, work out what repayments you will need to make and if these will be manageable on your current income.
  • Dubious loan purpose. Many loans come with restrictions as to how the funds can be used. If your lender finds out that your loan purpose isn't credible, your chances of having your personal loan application rejected are quite high.
  • Ensure your loan purpose is allowed. To avoid personal loan rejection, check with the lender to see if your loan purpose is okay. If you are taking out a secured personal loan there will be more restrictions, although you may also find limitations for other types of loans.
  • Incorrect details. Lenders will usually verify the details you put in your application and if they find inconsistencies they may reject you.
  • Verify your details. Double-check your details and information before you submit your application so that the lender has no reason to reject your application. Is your application filled out entirely? Have you provided any incorrect information? Also, always be 100% honest.
  • Unstable employment or insufficient employment history. Lenders are very meticulous about the stability of your job. Quite a number of lenders insist that you should have a stable job and should be out of your probation period, otherwise they will reject your loan.
  • Check you meet the employment requirements. Probation period times differ, but lenders usually require three months of payslips. If you're a casual employee looking for a personal loan, you may be required to provide six months of payslips and/or a letter from your employer regarding your job stability. See what the lender requires of your employment and ensure you meet that to avoid personal loan rejection.
  • You hold too many loans. If you're currently holding several loans this could give a lender cause to reject your personal loan application.
  • Don't hold more loans than you can afford. In short, lenders want to be able to lend you money. The main reason they won't lend to you if you have a number of loans already is they don't think you'll be able to pay it back. You could look at consolidating your loans or paying back some of them before applying for any new ones.
  • Insufficiency of asset security. Lots of lenders have restrictions on the type of asset you can use as collateral for a secured loan. For example, secured loans can only be secured by certain assets, such as vehicles or home equity. Secured car loans also usually have an age restriction on the vehicle that you are purchasing. If your asset doesn't meet these requirements, your personal loan could be rejected.
  • Check your collateral is sufficient. See what your lender requires in terms of collateral and check that the asset you plan to use meets their requirements and necessary value. If you're in doubt, get in touch with the lender before you apply.

Personal loan comparison

Now that you know what to look for when comparing personal loans, compare a range of loans below. Once you have compared, you can continue reading to find out what not to do.

$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
Alex Bank Personal Loan

From 4.99% (fixed)
4.99%
$2,100
6 months to 5 years
$0 (Waived $295 establishment fee)
$0
You'll receive a fixed interest rate from 4.99% p.a. to 19.99% p.a. based on your risk profile
Borrow between $2,100 and $30,000 from 6 months to 5 years. Note: The $295 establishment fee will be waived for loan applications submitted by 3 November 2021.
Plenti Personal Loan

From 6.39% (fixed)
6.39%
$5,000
3 to 7 years
$0 to $649
$0
You'll receive a fixed rate between 6.39% p.a. and 17.89% p.a. based on your risk profile.
A flexible loan with amounts from $5,000 and terms starting from 3 years. Interest and comparison rates calculated for a loan term of 5 years.
OurMoneyMarket Personal Loan

From 5.45% (fixed)
6.07%
$2,001
1 to 7 years
From $250
$0
You'll receive a fixed rate from 5.45% p.a. to 20.99% p.a. based on your risk profile.
A personalised loan from $2,001 to $75,000 that varies based on your credit history and financial situation.

⭐ Finder Exclusive: Apply before 31 October 2021 to secure a discounted rate of 5.45% p.a. (comparison rate: 6.07% p.a.) for the first 12 months on loans over $35,000. T&Cs apply.
Harmoney Unsecured Personal Loan

From 5.35% (fixed)
6.14%
$2,000
3 to 5 years
$575 ($275 for loans of below $5,000)
$0
You'll receive a fixed rate between 5.35% p.a. and 19.09% p.a. based on your risk profile.
Apply for a loan up to $50,000 and repay your loan over 3 or 5 years terms.
NAB Personal Loan Unsecured Fixed

From 6.99% (fixed)
7.91%
$5,000
1 to 7 years
$150
$10
You'll receive a fixed rate between 6.99% p.a. and 18.99% p.a. (7.91% p.a. to 19.83% p.a. comparison rate) based on your risk profile
Borrow from $5,000 to $55,000, with 1 to 7 year loan terms available. This loan comes with no fees for extra repayments and no early exit fees.
Citi Personal Loan Plus
8.90% (variable)
9.18%
$5,000
3 to 5 years
$199
$0
You'll receive a variable rate of 8.90% p.a. with a comparison rate of 9.18% p.a. if you're approved.
A credit limit up to $75,000 that you can continue to draw down over terms up to 5 years. Note: Monthly account service fee will be waived for applications submitted before 31 January 2022.
Symple Loans Personal Loan

From 5.75% (variable)
6.47%
$5,000
1 to 7 years
from 0% to 5% of the loan amount
$10

You'll receive a variable rate from 5.75% p.a. to 25.99% p.a.

Borrow up to $50,000 and earn 1 Qantas Point for every $1 borrowed.

⭐Special Offer: Earn up to 50,000 Qantas Points with a personal loan from Symple.
Wisr Personal Loan ($5,000 to $30,000)

From 6.49% (fixed)
6.49%
$5,000
3 to 7 years
$0 - Waived Establishment Fee
$0
You'll receive a fixed rate between 6.49% p.a. and 20.95% p.a. based on your risk profile
A loan from $5,000 that charges no fees for extra or early repayments. Keep in mind security is required in some cases.

⭐Special Offer:The $595 establishment will be waived for unsecured personal loans between $5,000 and $30,000. Offer ends 31 October 2021. T&Cs apply.
Wisr  Personal Loan ($30,001 to $64,000)

From 6.49% (fixed)
7.11%
$30,001
3 to 7 years
$595
$0
You'll receive a fixed rate between 6.49% p.a. and 20.95% p.a. based on your risk profile
A loan from $30,001 that charges no fees for extra or early repayments. Keep in mind security is required in some cases.
Great Southern Bank Unsecured Fixed Rate Personal Loan
9.39% (fixed)
9.64%
$5,000
1 to 7 years
$175
$0
You'll receive a guaranteed rate of 9.39% p.a. with a comparison rate of 9.64% p.a. if you're approved.
An unsecured loan from $5,000 with flexible repayments and no monthly fee.
SocietyOne Unsecured Personal Loan

From 5.95% (fixed)
5.95%
$5,000
2 to 5 years
from $0 to $595
$0
You'll receive a fixed rate between 5.95% p.a. and 19.99% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.
MoneyMe Personal Loans

From 6.25% (fixed)
7.64%
$2,100
1 to 5 years
from $295 to $495
$10
You'll receive an interest rate between 6.25% p.a. and 19.95% p.a. based on your risk profile
Borrow up to $50,000 with no hidden fees or costs. Application process usually takes 5 minutes to complete and is done fully online.
Plenti Variable Rate Personal Loan

From 6.39% (variable)
6.39%
$5,000
1 to 3 years
$0 to $649
$0
You'll receive a variable rate from 6.39% p.a and 17.89% p.a. based on your risk profile
A flexible loan with amounts from $5,000 and terms starting from 12 months. Benefit from transparent costs and a rate estimate before you apply.
NAB Personal Loan Unsecured Variable Rate

From 6.99% (variable)
7.91%
$5,000
1 to 7 years
$150
$10
You'll receive a variable rate between 6.99% p.a. and 18.99% p.a. (7.91% p.a. to 19.83% p.a. comparison rate) based on your risk profile
Borrow from $5,000 to $55,000, with 1 to 7 year loan terms available. This loan comes with no fees for extra repayments and no early exit fees.
Great Southern Bank Unsecured Variable Rate Personal Loan
11.89% (variable)
12.15%
$5,000
1 to 7 years
$175
$0
You'll receive a guaranteed rate of 11.89% p.a. with a comparison rate of 12.15% p.a. if you're approved. Note: This rate may vary during the loan term.
Borrow from $5,000 with the option for flexible repayments and no monthly fees.
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Compare up to 4 providers

Breakdown of things to consider when applying

  • Avoid multiple applications. When you apply for a personal loan, the creditor will list it on your credit file. Too many applications in a short space of time can have a negative impact on your credit rating and may result in rejection.
  • Keep your record clean. You can make this happen by paying your debts on time and avoid defaulting on any loans. Keep track of your financials and don’t take on loans that you can’t handle to avoid defaults.
  • Check your credit report. You should keep monitoring your credit file and ensure the information is up to date. You need to take out outdated data, erroneous entries and other irrelevant information.

Related reading: How much should you borrow for your car loan?

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More guides on Finder

Personal Loan Offers

Important Information*
Logo for Harmoney Unsecured Personal Loan
Harmoney Unsecured Personal Loan

You'll receive a fixed rate between 5.35% p.a. and based on your risk profile.
Apply for a loan up to $50,000 and repay your loan over 3 or 5 years terms.

Logo for ANZ Fixed Rate Personal Loan
ANZ Fixed Rate Personal Loan

You'll receive a fixed rate of 8.99% p.a.
Apply for up to $50,000 to use for a variety of purposes without needing to add security. Available to self-employed applicants.

Logo for NAB Personal Loan Unsecured Fixed
NAB Personal Loan Unsecured Fixed

You'll receive a fixed rate between 6.99% p.a. and 18.99% p.a. ( 7.91% p.a. to 19.83% p.a. comparison rate) based on your risk profile
Borrow from $5,000 to $55,000, with 1 years to 7 years loan terms available. This loan comes with no fees for extra repayments and no early exit fees.

Logo for SocietyOne Unsecured Personal Loan
SocietyOne Unsecured Personal Loan

You'll receive a fixed rate between 5.95% p.a. and 19.99% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.

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