If you’ve ever applied for a personal loan and been knocked back, you’re not alone. Many Australians are surprised when their application is declined, especially when they believe their finances are in good shape. Whether you're trying to consolidate debt, cover an unexpected expense or fund a personal goal, getting approved starts with understanding what lenders look for. As a Perth-based finance broker, we’ve seen the full range of loan application outcomes—and we know what makes or breaks them. Here's a breakdown of the most common reasons personal loans are declined, and how to give your application the best shot.

1. Poor or Limited Credit History

Lenders want to see a track record of how you manage debt. If your credit score is low or you’ve never borrowed before, it can raise red flags.

How to avoid it:

Check your credit report before applying (you can do this for free).
Pay bills and debts on time to build your score.
Consider a broker who can match you with lenders open to limited credit history.

2. Inconsistent or Insufficient Income

Lenders need to see stable income to ensure you can meet repayments. If your income is irregular (like for some sole traders or contractors), it might trigger a decline.

How to avoid it:

Provide consistent income documentation, such as payslips or business bank statements.
Work with a finance broker in Perth who understands self-employed and non-standard income cases.

3. Too Much Existing Debt

If you're already juggling multiple credit cards or loans, lenders might worry that a new loan is a risk.

How to avoid it:

Consider consolidating debt first.
Reduce unnecessary credit limits and pay down outstanding balances before applying.
Speak with a local finance broker to explore lenders with flexible debt-to-income thresholds.

4. Errors in the Application

Simple mistakes like incorrect income figures or missing documents can lead to automatic declines.

How to avoid it:

Double-check all information and upload clear documentation.
Work with a broker who can prepare and submit your application properly, reducing the chance of errors.

5. Applying with the Wrong Lender

Not all lenders have the same criteria. Applying to the wrong one can mean a hard credit check without any real chance of approval.

How to avoid it:

Avoid one-size-fits-all lenders.
A Perth finance broker will assess your situation and connect you with lenders most likely to approve your loan.

Need Help Getting Approved?

Being declined doesn’t mean you’re out of options—it just means you need a smarter approach. At Hanna Lending, we help people across WA access personal loans by matching them with lenders that suit their income, credit, and goals.

We handle the paperwork, keep your credit file clean, and most importantly, improve your chances of success.

📍 Based in Perth? Reach out today for a no-pressure chat and explore your personal finance options.

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Nathan Hanna

Director

Nathan has 10 years experience as a finance broker, helping Australians find the right loan. Nathan will work with you to get your next asset or personal finance.

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