Loan Denial and Reapplying

Question

I recently applied for a personal loan. I made it to the final stage of approval after uploading my paystubs, payoff notices, bank statements, etc. I ultimately received a decline notice stating that 'borrower cannot verify application details' something along those lines.

I have written a letter to the underwriters for further details on what the issue was, as when I called I was told that I had to personally write in to get clarification as to why I was turned down.

I was able to verify my income with my paystubs, so I am unsure what could not be verified.

My question is, assuming that I am able to verify that all the information I provided on my application was correct, in general, can decisions like being turned down for a loan be reversed, or would I have to reapply once they clarify what could not be verified? Thanks

Answer 1

My question is, assuming that I am able to verify that all the information I provided on my application was correct, in general, can decisions like being turned down for a loan be reversed, or would I have to reapply once they clarify what could not be verified?

That is a question only the lender can answer. If their issue is fixable, then I have had lenders approve the loan without having to re-apply.

In one case they were overly aggressive in their underwriting rules and rejected the auto loan application because the amount I was asking for was $10 above the maximum they though I could afford. I was able to show they didn't have to be that aggressive.

In another case the bank rejected a credit card application for my son, and it was because of how he answered a question on the application, he misunderstood the question, and when it was addressed they approved him for the card.

In both cases once the issue was addressed the loan/credit card was approved that same day.

But if enough time goes by, they might ask you to re-apply so they can re-run the credit check. Of course their policy could be to always ask the customer to re-apply.

So when you get their response, you should contact them again to determine what the next step is.

Answer 2

The lender will generally be glad to give you an explanation and are required to provide certain disclosures, so you don't have to remain in the dark about the denial.

Take the reason seriously and wait until you're in a better position to apply again. It's important to find out why your loan application was declined before you apply again.

It's worth narrowing the gap to boost the odds of approval when you re-apply for the loan.