Loan application mistakes happen often. Even when you think you’ve done everything right, you could discover you goofed up and now you’re frustrated. Besides that, when a lender says no you need to go through the application process again which wastes your valuable time.

Well, if it is any consolation, you’re not alone. Many of these mistakes aren’t as obvious as you might think. Luckily, you can take steps to prevent this from happening.

Read on about five of the most overlooked loan application mistakes that could stop you from getting a loan. While this isn’t a guarantee you’ll be approved, it will certainly improve your chances. You may also want to check out other reasons why your loan application can be denied before you start your application process.

1.There were errors on your application form

Whether you’re applying online or in-person, it is extremely important that you complete your application form correctly. That means filling in every field and reviewing the form for errors and inaccuracies before you submit it.

While it is impossible to calculate how many times this happens since there are so many lenders and so many applicants, it is probably very often. Here’s an example of when this can happen.

You’re filling out an application form and you don’t want to provide your banking information to a lender since you feel it shouldn’t be necessary when you apply for a loan. Yet when you don’t provide it, the lender automatically rejects your application. This happens quite often, since more and more lenders now use artificial intelligence to review loan applications.

Why the denial? It turns out the lender needs your banking information to verify your income. The information is a requirement of the personal loan since they use this method instead of asking you to submit paperwork. The lender stated this during the application process. You just didn’t read the fine print.

Another unintended effect of an incomplete application form is it slows down the process. You may think your application is in the works and chugging along, but days later you receive notification that the lender needs more information from you. Obviously, this is frustrating enough that you might abandon the application completely. Then it’s back to the beginning again with another lender. Clearly, it is better to take your time, double check your application form, and then submit your form.

2.You didn’t bother with pre-approval

It is understandable that you’re eager to get money for whatever you need to do. Still, you need to be well-informed and use the right process when you start the loan application process. Otherwise, it can have negative consequences.

For instance, applying through lenders that do not use a pre-approval or pre-qualification process is not a good idea. Why? Every application can trigger a hard credit inquiry that can affect your credit score. These inquiries also linger on your credit report for up to two years and while they do they continue to affect your credit.

Luckily, pre-approval is a free tool that helps you determine whether you qualify, the terms each lender offers, and the maximum amount you could borrow. Your initial applications do not affect your credit score either.

The many additional benefits of loan pre-approval make it a no-brainer. As examples, it speeds up the loan process, takes care of preliminary qualification steps such as income verification and a credit overview, and it relieves a lot of stress too. Plus, a good loan broker will automatically direct you towards lenders that offer the appropriate personal loan for your particular situation. All you do is complete one application form.

3.You misrepresented information

Making a mistake on your application form is one thing, but intentionally misrepresenting information is another. Should you fail to report information such as a debt you owe, the lender considers it fraud. The result is instant loan denial.

Misstating employment or income levels, hiding debts or obligations to appear more creditworthy, or using stolen or fabricated identities to try to secure a loan are all grounds for loan denial.

If you think that you can get around declaring debts, don’t fool yourself. First, carrying additional debt could lead to financial hardship. You might fool the banker, but you would still bear the negative effects.

Second, if you don’t declare a debt, the lender may discover it anyway. If it involves credit it will probably appear on your credit report. For instance, unpaid or overdue child support can appear on a credit report in the U.S. The same applies to unpaid alimony.

The additional debt also changes your debt-to-income ratio which may mean you no longer qualify for the loan. The lender may want to change the terms to reflect your higher risk since you have broken the terms of your agreement with them.

4.Things changed since pre-approval

As mentioned, pre-approval is a great tool, but it is only the first step on the loan process. However, there’s no guarantee you’ll receive final approval if your financial situation changes before you sign your loan documents.

The reasons for a financial change can include many things. The most obvious is that you are no longer earning as much as you once did. Perhaps you’re getting fewer hours at work or your overall household income fell. Still, there are other things you should avoid doing during this time.

First, do not pay for major items such as a car, RV, boat, or holiday now. This can affect your net worth. Second, don’t take another loan before you received final loan approval. This affects your debt load. Finally, avoid moving or changing jobs at this time.

Why? Changing your residence or employer at this time signals instability. Lenders prefer stable borrowers and are more likely to say no.

Having said that, some lenders place less emphasis on employment and residence stability so you could potentially get a personal loan with just a few months at the same places. However, keeping your income and debt stable during this time is of paramount importance.

5. Applied for multiple loans simultaneously

Those that choose to apply for loans from multiple lenders won’t increase their chances of approval. In fact, this can throw up a red flag for lenders as it can seem you’re having trouble getting credit. If the lenders use hard credit inquiries, you will also lower your credit score.

Still, that doesn’t mean you can’t apply for multiple loans at the same time. You just have to do it in the right manner. As we mentioned, pre-approval through a personal loan broker allows you to apply through many lenders, without triggering a red flag.

This method also allows you to consider many important factors before you decide to borrow. These include:

  • Interest rate – Check the interest rate and the APR so that you understand your true cost of borrowing.
  • Fees – Choose a lender that does not charge an origination or administrative fee for setting up your account. Choose a loan that does not have a prepayment penalty so you can pay more whenever you choose.
  • Income verification process – Does the lender quickly verify your income through your bank or do you have to submit documents?
  • Income sources considered – If your income comes from a source other than a regular job, will the lender consider it?
  • Timeline – How long does it take the lender to pre-approve? How are loan documents processed? How soon can you expect your funds?

Loan Application Mistakes Can Be Avoided

It makes sense to avoid these and other common reasons for a loan denial before you start your application process. Still, even if you think you’ve avoided all these pitfalls a lender may still turn you down. Luckily, if they do you can ask why.

Under U.S. law, you should receive notice of the reasons a creditor took adverse action on your application. If not, reach out and ask for an adverse action notice within 30 days of your rejection. This allows you to get at the root of the problem.

Besides avoiding these mistakes, you will want to choose the right loan broker. This improves your access to loan products and lenders. Fortunately, if you’re looking for a personal installment loan, FlexMoney USA can help.

We offer installment loans with instant approval from a network of reputable U.S. lenders. Loans range between $200 and $35,000 and are available for a range of credit scores and income sources.

The process is easy and safe and the best way to check what’s available to you in minutes, without lowering your credit scores. Complete one application form and we’ll find the most suitable lenders for your needs. They’ll connect with you and show you what they have to offer.

Compare interest rates, terms, fees, and timelines to find the best installment loans available to you in just a few minutes. Apply today and get money in your hands as quickly and easily as possible.