Thinking about getting a loan is one thing, but actually getting it is a completely different thing. And, of course, not everyone who thinks about it can do it, because there are criteria that need to be met, and some people just don’t meet those. If you’ve found yourself needing money and not being able to get a loan, there are two different things you can do.
First, you can just give up on the entire idea. Or, secondly, you can figure out why it is that you’ve been rejected and then do everything in your power to increase your chances. It’s not the end of everything if you får ikke lån, i.e. if you can’t get a loan, especially if you’ve tried just once by now. You can always try again, but the truth is that trying without finding out why it is that you’ve been rejected and without taking any concrete steps towards boosting your chances of being approved won’t get you anywhere.
So, to be as precise as possible, here’s what you need to do if you får ikke lån. First, you need to learn about the reasons why that might happen, so as to identify the specific ones as to why you might have been rejected. Then, working on improving your chances should be the next step, and I’ll tell you more about both of those things, hoping to help you actually get your loan instead of giving up on it after you’ve been rejected ones.
Read about what to do if you’ve been declined: https://www.forbes.com/advisor/personal-loans/loan-denied/
Reasons You Might Have Been Rejected
So, as explained, the first thing to do is figure out why it is that you might have been rejected. Multiple reasons for that. Lenders need to protect their own interests and they do so in various different ways, including rejecting those applicants that pose a risk to them for one reason or another. Learning about those reasons, which you’ll do if you keep on reading, will help you pinpoint the exact causes of your specific rejection, leading you towards determining precisely what you need to do so as to get approved.
You Don’t Meet the Basic Criteria (Age, Income, Residence)
Not meeting the basic borrowing criteria will certainly get you rejected. And, the basic criteria includes, among other things, your age. You can’t borrow money if you’re younger than 18, and most lenders won’t approve people younger than 21, while some of them require you to be at least 23, or even 25. The upper age limit is usually 70, and the common practice is for the loan to be repaid before you reach 75.
Apart from the age, there’s also the residence requirement to consider, stating that you can’t borrow money from Norwegian lenders if you’re not a Norwegian citizen or resident. If you’ve been living and working in the country for at least three years, you’ll be eligible for a loan. And, naturally, the income requirement also needs to be met, meaning that you need to earn at least NOK 120,000 a year so as to be eligible, while some lenders have increased the minimum amount to NOK 250,000.
You Have a Bad Payment History
Having a bad payment history is a sure path towards getting rejected. In fact, it is one of the main reasons why people aren’t approved for loans, because, as I’ve explained, lenders regard such applicants as too risky. If you have a payment note, you are highly unlikely to get approved, meaning you should first work on repaying the debt that’s causing it and basically improving your credit history and then apply for the loan you need.
Your Credit Score Is Too Low
Similarly, if your credit score is too low, most lenders are bound to reject you. While processing your application, banks will look into your credit score, so as to determine if you would be a risky borrower or not. The credit score is calculated based on numerous factors, including your age, your debt, your income and your payment history. Having too low a score will lead to you being rejected most of the times.
Your Debt Ratio Is High
If your total debt exceeds 5 times your annual income, it means that your debt ratio is already high, which will result in your new application being rejected. Keep in mind that this includes all of your debt, including mortgages, student loans, car loans and any unsecured debt you may have. You may be comfortable enough with your income and capable of repaying a new loan, but the lender won’t see it that way if your debt ratio is high, which is why your application will be denied.
You’ve Chosen a Short Repayment Period
When you trenger penger, i.e. when you need money for one reason or another and when you decide to borrow money from a lender to get it, you will most likely want to keep the repayment period short, so as not to be in debt for a long time. This may work sometimes. Other times, though, too short of a repayment period can also lead to your application being rejected. This is because the repayment period affects the monthly amount you’ll need to be paying, and if the lender decides that it is too high for your income and unrealistic for you to handle, they won’t approve the loan.
You Have No Existing Relationships With Lenders
Not having any previous relationships with lenders can also be an obstacle. If still young and thus not having had the opportunity to work with lenders in the past, there’s a chance you may need to turn towards niche banks, instead of borrowing from those traditional ones that require previous customer relationships. Anyway, while this is a requirement with some lenders, it is not such a big obstacle, because there are still financial institutions willing to work with new borrowers.
How to Improve Your Chances
Figuring out the specific reason why you have been rejected will bring you much closer towards actually being approved the next time you apply. What you need to do, of course, is work on improving your chances by basically eliminating those rejection reasons altogether. So, your next steps will depend on why it is that you’ve been declined in the first place, meaning that not everyone will get to take the same steps and succeed in improving those chances.
Still, there are some common steps that most people will have to take if they have been rejected, and I’ll now tell you about those. First things first, you’ll need to work on improving your credit score, as that will certainly boost your chances, and so will reducing your debt ratio. Getting rid of unused credit will reduce your debt ratio, while your credit score will be improved by paying all of your bills on time, by reducing the number of credit cards you’re using and of small loans you have as well as simply by getting older.
What you can do further, if you’re not ready to wait for your score to be improved or if you’ve already done everything you can in that regard, is apply with a co-borrower, as the lenders will regard that as a sort of a guarantee that the debt will be repaid. Also, you can apply for a lower amount, or for a longer repayment period, so as to ensure that the lender finds the monthly installment reasonable and realistic for your specific financial situation. And, of course, working with an agent and applying with their help will also lead to getting approved, as they will know how to find the perfect solution that will work for your specific situation and that won’t get you rejected.