What to Do If Your First Loan Proposal Is Rejected
If you’ve already signed up for a social lending portal and submitted your first loan as a borrower, then congratulations! You’re embarking on a journey that’s partially about money, and partially about the community that we all share. You’re asking regular everyday people to invest in your dream, and that can be a pretty emotional experience.
Some people don’t get their loan fully funded, or the loan is even rejected outright. It can be hard to go on a social lending portal and see so many other loans being funded, only to find that your loan has been rejected by just about everyone. There might be a few reasons for rejection, and these reasons are important for a few reasons. The biggest reason why you will need to think about reasons why your loan might be rejected is because you will need to make sure that you’re actually avoiding those mistakes in the future.
If there’s one problem that seems to always crop up when people are looking for their social loans to be approved, it’s lack of appropriate information and good debt management plan. For example, if you say in your listing that you own a home, then it shouldn’t be a problem to provide proof of homeownership. Even if you are on a rent to own basis, you should have had a contract that states this. Your point in doing this is to show that you have other obligations, but you are meeting them in a timely fashion. Paying a mortgage month after month shows that you are willing to pay back debts, which is always a good sign. But if you leave off verifying information, it can be seen as if you’re trying to hide something very important, and no one will fund your loan.
This is the same principle behind claiming all of your income. Now, if you don’t want your alimony or child support payments to be calculated in with your income, you should leave them off. However, if you do want that information in there, keep in mind it will be used as a basis for you to repay the loan. Some people aren’t comfortable with this, but it’s a personal decision that you have to make.
As mentioned before, being rejected from getting a social loan can be a very emotional experience. After all, if everyday people won’t give you money, who can you turn to from there? However, it’s a matter of shifting your perspective towards the positive. You aren’t a failure just because you didn’t get your listing funded. You’re not a failure because your loan was rejected.
There’s a reason why it’s called social lending — you’re supposed to get social! You will want to make sure that you actually focus on finding out answers, even if that means having to go and ask the board for the information that you seek. This is something that can definitely help you make better decisions, so don’t skip over it! You might get the help you need to build an even better listing over time.
There may come a day when you become a lender yourself, and you will need to make sure that you understand both sides of the equation. Fighting to get your own loan approved can help you have sympathy and understanding for other people. You might have to get someone to vouch for you and your creditworthiness. This means that in the future, when you’ve gotten your loan approved, you will want to pay back that kindness by helping someone else.
These principles don’t really have a home in traditional lending, but there’s nothing really traditional about social lending. It really is what you make of it, so make sure that you get started as soon as possible to fight rejection and get the loan you deserve!
If social lending fails for you – try debt consolidation.