Overview
Online installment lenders use a variety of criteria to evaluate a loan application to try to gauge the applicant’s ability to afford or repay the loan. In this article, we will explore five common reasons why loan applications may not get approved in Canada and simple tips on increasing your chances of approval.
Reason #1: You Don’t Meet the Basic Eligibility Requirements
Typical lending requirements for online borrowers include the following:
- You must be at least 18 years of age.
- You must be a Canadian citizen or permanent resident.
- You must have a stable source of income.
- You must have a permanent address.
- You must have a valid Canadian bank account that has been active for at least 90 days.
If you do not meet the basic eligibility requirements, it is unlikely that your loan application will get approved.
Reason #2: You Have Too Many NSF Transactions
Non-sufficient funds (NSF) transactions refer to occasions when a bank account lacks sufficient funds to cover a payment or transaction that has been attempted. Most financial institutions are likely to charge NSF fees.
An excessive number of NSF transactions indicates that you may lack the ability to repay your loan due to a lack of financial stability and funds. Therefore, make sure you minimize – or, ideally, avoid altogether – NSF transactions for your best chance of approval.
Reason #3: You Have Too Many Ongoing/Active Payday Loans/Short-Term Loans
Having too many payday loans/short-term loans on the go indicates that you may lack the repayment capacity required for a new loan. This is due to the fact that you may be already overextended and overburdened when it comes to your existing financial capacity. Make sure you minimize the number of ongoing/active payday loans and short-term loans before you take out an additional loan, to ensure that you have the financial capability to repay your loan(s).
Reason #4: You Have a Recent History of Bankruptcy/Consumer Proposal
A recent history of bankruptcy or consumer proposal may indicate that your financial situation is not stable enough to take out a new loan. Although a history of bankruptcy is not an automatic disqualifier, it may make it more challenging to qualify for online personal loans with some lenders. Therefore, make sure to check your lender’s requirements and what eligibility criteria they may use to evaluate applicants.
Reason #5: You Lack Stable Income
A lack of stable income severely limits your ability to pay back a loan, thus making you a risky borrower in the eyes of online installment lenders. Therefore, make sure you can provide proof of a stable source of income to any prospective lenders. Double-check their requirements when it comes to income and apply only if you meet their basic requirements.
Tips to Avoid Getting Rejected for a Loan
While there are no guarantees in life, it is always possible to optimize your chances of success. Consider the following tips when applying for no credit score loans online in Canada:
- Minimize your NSF transactions
- Minimize the number of ongoing/active payday loans/short-term loans
- Adhere to the lender’s basic eligibility requirements
- Provide full and valid information on your loan application
Following these tips will help you increase your chances of approval in Canada.
Conclusion
Need quick funds? Apply for a personal loan online via LendProConnect. We do not check credit scores or credit reports during our simple and quick online application process. To improve your credit score, sign up for Credit Verify. This advanced and sophisticated technology allows you to monitor your credit score and automatically catch mistakes on your credit report.
