Loan Rejection: What To Do If You Can’t Get A Loan

When you need money in a hurry, few things can be as distressing as being rejected for a loan – especially when the loan was the last option. At this point, you’ll likely be dreading loan rejection in the future. But it’s also worth mentioning that not all hope is lost.

Understand Why Your Loan Was Rejected

There are a number of reasons why a loan can be rejected, and knowing these can be the difference between another rejected loan and a successful loan application in the future. Personal loan rejection reasons include:

  • A bad credit history. As lenders tend to use a credit score to gage a borrower’s financial history, a bad credit score can lead to a loan request being rejected. Thankfully, there are practical ways to improve your credit score.
  • Your lender does not believe you can safely repay the loan. A responsible lender will consider your income, current debts, and more – and if they aren’t convinced that a loan can be repaid without putting you in further financial distress, they will reject your request.
  • You have defaults listed on your credit report. These are overdue payments of more than 60 days where debt collection has started.

If your loan application is rejected, see if any of the personal loan rejection reasons above apply to you. You may need to improve your credit score or pay off some outstanding debt in order to prove to future lenders that you are responsible with money.

Prepare For Your Next Loan Application The Right Way

Now that you know the reasons why a loan can be rejected, you are better equipped to set up your next loan application for success.

Get A Copy of Your Credit Report

As mentioned above, your credit score can greatly influence whether or not your loan application is successful, as lenders use this to better understand your financial history. You can get a copy of your credit score from sites such as Equifax, Experian or illion.

Pay Off Some Debts

Paying off outstanding debts can go a long way when it comes to a successful loan application, as it increases your borrowing power and shows lenders that you actively work on your financial situation. Plus, it lessens financial stress on yourself.

Consolidate Outstanding Debts

Debt consolidation is a great way to bundle all of your outstanding debts into one, with the added advantage of being able to take advantage of a possible lower interest rate. When you consolidate your loans, you will also be making just one repayment with one interest rate, rather than lots of smaller repayments (and fees!) throughout the month.

Form A New Budget

A budget is, more or less, an essential in anybody’s life, whether you’re an expert saver or the complete opposite. A budget helps you to assess where your money is going every week, fortnight or month. When you create a budget, you can set money aside for savings, for groceries, for car repayments – whatever you need. But when you make a new budget ahead of a loan application, you should also have a category for loan repayments. This way, you’ll be in much better control of your finances and know that you have money set aside to repay your loan.

Don’t Apply for A New Loan Until You’re Ready

This is a very important piece of advice, especially if you’re afraid of loan rejection, as applying for multiple loans within a certain period of time is a quick way to damage your credit rating. Instead, take the time to set yourself up for a successful application, allowing time to pass between applications.

Alternatives to A Loan

If you are sure that you will not be approved for a loan in the future, don’t fret: there are other options out there if you still need to borrow money.

  • Apply for a credit card. While credit cards aren’t recommended for everyone, they can be useful tools in the hands of the financially savvy. Keep in mind however that credit cards can take time to be approved, whereas applying for a loan online can have money in your account in under 24 hours.
  • Borrow money from family or friends. It’s not always pleasant to ask family or friends for money, but it is a way to potentially borrow money without interest.
  • Seek an alternative loan. From payday loans to low income loans, we have a number of alternative loans available.

At Cigno, we pride ourselves on our responsible lending practices that have helped thousands of Australians when struggling with financial problems. Talk to us today and find out how we can be of help to you.

Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.


Ordered by the Federal Court of Australia

The Federal Court of Australia has found that Cigno Australia Pty Ltd (Cigno Australia) and BSF Solutions Pty Ltd (BSF Solutions) have breached the law by engaging in unlicensed credit activity and charging prohibited fees.

In the period from July 2022 to 3 October 2023, over 100,000 consumers have been lent a total of $34 million, and charged fees of over $70 million, under the ‘No Upfront Charge Loan Model’ operated by BSF Solutions and Cigno Australia. At no time has either BSF Solutions or Cigno Australia held an Australian Credit Licence.

The Court also found that Mark Swanepoel (director of Cigno Australia) and Brenton James Harrison (director of BSF Solutions) were involved in these breaches of the law.

With effect from 24 May 2024, the Court has granted permanent injunctions preventing Cigno Australia and BSF Solutions from:

  • demanding, receiving or accepting fees or charges, including amounts of loan principal, from consumers in relation to credit provided under the ‘No Upfront Charge Model’; and
  • engaging in further credit activity pursuant to the ‘No Upfront Charge Loan Model’, including by entering into new agreements with consumers, for so long as they do not hold an Australian Credit Licence.

Cigno Australia was ordered by the Court to, by 5th July 2024, send written communications to consumers who between July 2022 and December 2022 entered into agreements with Cigno Australia and BSF Solutions under the ‘No Upfront Charge Loan Model’.

The Court will later determine whether (among other things) Cigno Australia and Mark Swanepoel ought to pay a pecuniary penalty in respect of this conduct, and whether Mark Swanepoel should be restrained from carrying on a business engaging in credit activity.

Cigno Australia, BSF Solutions, Mr Swanepoel and Mr Harrison intend to appeal the decision of the Court and have filed an application for leave to appeal. If the appeal is successful, some or all of the orders of the Federal Court of Australia may be set aside.

Where can you get more information?

Where to go for further support

You can access legal advice in your state at: Free legal advice –

If you are experiencing trouble with debt, or money worries in general, contact:

  • the National Debt Helpline on 1800 007 007 or online chat (9:30am to 4.30pm, Monday to Friday).

If you need someone to talk to, contact:

  • Lifeline on 13 11 14 (24 hours) or their crisis support online chat or
  • Beyond Blue on 1300 22 46 36 (24 hours) or their webchat