Why Didn't I Get the Loan?

Have you ever been knocked back when you went for a loan to buy something? This may explain the reasons why.

When you apply for a loan they want to know how much money you have coming in and how much money you have going out. This means how much money you and your partner are paid each week/fortnight and how much you pay for rent, bills and other loans each week/fortnight. Property you have like cars, boats and furniture are also looked at.

Example 1:

Tom wanted to buy a flash new stereo that cost $1200.00. Tom only had $300.00 cash which meant he needed to borrow $900.00. Tom wanted to get a loan at the Electrical Store for the extra $900.00.

Tom earned $500.00 a fortnight and his food bill was $240.00 a fortnight, rent $200.00 a fortnight and bills (electricity & phone) was $50.00 which left him with $10.00 to pay off a loan each fortnight.

Tom's Pay each fortnight $500.00 - Money Tom spends each fortnight $490.00 = $10.00 to pay the loan off.

Tom wouldn't get the loan because the bank or finance company would see that the $10.00 Tom has spare each fortnight wouldn't be enough to pay the $900.00 loan off.

If you take away how much you spend each fortnight from how much you earn each fortnight and are left with an amount that you feel you still should have got the loan, there may be another reason. A bank or finance company may not give out a loan because of loans that you have failed to pay back in the past.

The bank or finance company can find out whether you are good at paying back loans from the credit-reporting agency. If you would like to obtain a free copy of your credit file write to Baycorp Advantage, Public Access Division, PO Box 964, North Sydney, NSW 2059. Find out more information on obtaining your credit record.