Applying for a loan can be a frustrating process, and it can be more frustrating if the credit company refuses to grant the borrower’s loan application. 

Below is a comprehensive guide on why Bulgarian online credit companies and others may turn down an individual’s loan application. 

The Loan Applicant’s Credit Score May Be Low

An individual’s credit score is among the top factors that online credit companies look at before granting a loan, especially if the loan is unsecured. 

Online credit companies use their loan applicants’ credit scores to determine their reliability of paying back the loan on time. 

Many factors affect people’s credit scores. Among them include missing loan repayments, an individual using their credit too much, and bankruptcy, to name a few. 

Most lenders have a particular minimum credit score requirement. So, if an individual’s score falls below that, the credit company may refuse to grant them the loan. 

Of course, some lenders offer loans to people with low credit scores. However, they may charge high-interest rates as compensation if the borrower defaults on their loan repayments. 

So, it is recommendable for individuals to keep their credit scores in check to avoid being denied a loan. 

One excellent way to do so is to pay bills on time. Be it credit card repayments, or mortgage payments, to mention a few. Making these payments late, sometimes even once, can negatively affect an individual’s credit score. 

The Individual’s Debt-to-Income Ratio May Be too High

A person’s debt-to-income (DTI) ratio is the percentage of their gross monthly income that goes into paying their monthly debts. For instance, if a borrower earns $6000 a month and has $3000 worth of debts in a particular month, their debt-to-income ratio would be $3000 divided by $6000, which is 50%. 

This is another major factor that online credit companies consider before granting an individual a loan. A borrower’s debt-to-income ratio helps lenders determine whether or not the individual is overwhelmed by debt and would likely have difficulties paying the loan they’re asking for. 

Most online credit companies require loan applicants to have a DTI ratio of about 35% and below, although some lending institutions grant loans to borrowers with a ratio of about 40%. In general, the lower the DTI ratio, the better. 

The Borrower’s Income May be Insufficient or Unsteady

Apart from the loan applicant’s credit score and debt-to-income ratio, online credit companies also consider their income. 

For starters, lenders look at an individual’s income amount to determine whether or not they can grant the loan they’re requesting. So, if a borrower is asking for a high loan amount, the online credit company will want to see a high-income amount. This will assure them that the borrower can pay back the loan without any difficulties. 

Another factor online credit institutions look at regarding an individual’s income is its steadiness. If the borrower’s income is fluctuating, the lender may deny their loan application. This is because they are not confident that the borrower will make their loan repayments consistently until they’re done. 

There May Be Some Important Information Missing In the Loan Application Documents

It’s something that many individuals ignore, but it may cause them not to get the loan. Including all the required information when applying for a loan is essential. However, double-checking whether all the needed information is in the loan application form is even more important. 

It’s also advisable for borrowers to check with the lending institution’s customer care team if they don’t understand something in the loan application document. Filling in the wrong information may also cause them not to receive the loan. 

The Borrower’s Loan Purpose May Not Match the Lender’s Requirements

Many online credit companies ask borrowers how they intend to use the money. While it may seem like an invasion of privacy, lenders do so for several reasons. 

For first-time applicants, they ask that question in their loan application forms to match borrowers with the right loan package. For instance, a loan meant for emergencies may have different terms and conditions compared to a debt consolidation loan. 

Lenders also use this question to determine whether the purpose the loan applicant has stated meets their criteria. So, an individual may be denied their loan because their purpose doesn’t meet the lending institution’s requirements. 


Applying for a loan is quite a complex process, so it’s hard not to feel bad when the application is turned down. That is why individuals should be cautious during the process to avoid being denied the loan they’re applying.