Easier terms and conditions do not guarantee that the lender will sign off on your loan application. Whether you take out a small loan or a long-term loan, they will follow a protocol to examine your repayment capacity and credit score. Bad credit does not keep you from borrowing money, but you can be turned down if you fail to prove your repayment capacity.

Many lenders provide doorstep loans with no credit checks that trickle a fancy of a large number of people. They are particularly popular among senior citizens, the physically disabled and the unemployed. However, the disbursal amount is not as same as other small loans. When you borrow money through doorstep loans, a representative will visit your home to evacuate your income sources and affordability. You will get money in your hand on the spot if they find you have enough incomings to pay off your debt.

The term of these loans is very small, not more than a month, which is why lenders critically examine your repayment capacity. Many borrowers live under the impression that it is very easy to have the application approved, but not all borrowers successfully get money. There are several reasons responsible for rejection of your loan application. For instance, your credit history is extremely poor, your credit utilisation ratio is higher, you do not have enough income, your credit demand is more than your affordability and the like, but there are some unexpected reasons that lead to turning down of your application.

You are a frequent job

Income stability is one of the important factor that every lender will look at whether your credit rating is good or bad. The lender will be sceptical about your repayment capacity if you keep changing your jobs very frequently. It shows that you are not serious about your job and you are not likely to get a new job as recruiters will not shortlist your resume. Whether you apply for a doorstep loan or any other small loan, you must remember that you should have a steady source of income. If you are borrowing money during unemployment, you will show income sources from side gigs.

Your loan application has been rejected previously

Soft inquiries do not pull your credit score but it does not mean that the lender will not peruse your credit file. It consists of all information from your personal details to defaults. A lender may hesitate to approve your loan if your credit report consists of previous rejection details. There may be several reasons for dismissal but they will not be recorded on your report. A lender will doubt your repayment capacity and deny you lending money. If your loan application has been rebuffed by your lender, you should ask the reason for it and then work on that so that next time the application does not get rejected due to that reason.

A guarantor to a defaulted loan

If you have acted as a guarantor to a loan that your friend applied for and they failed to pay it off on time, you are less likely to have a loan approved next time. When a borrower fails to pay off the debt, the lender reserves the right to call upon a guarantor to settle all dues. This affects the credit score of both the borrower and the guarantor.

When you apply for a doorstep loan, make sure that aforementioned causes do not turn down your loan application. However, you should also consider your credit rating even though lenders do not discourage you from taking out bad credit loans. Make sure that you have not applied for multiple loans within a short period.