Rejected for a Student Loan? 4 Reasons Why


You’ve been accepted into the college/university of your choice and are in need of additional funds to pay for your tuition and other school costs. You hop online and apply to a few private student loan agencies only to be met with several rejection notices. Is this possible? Unfortunately it is very possible for this to occur when applying for a private student loan. Hopeful students are turned away for reasons that may or may not be within their control.

The good news is that there are other options for those that have been rejected for a student loan, but first, let’s go over why you may have been denied in the first place.

Rejected for a Student Loan? 4 Reasons Why

1.  Incomplete or Inaccurate Application Information

One of the main reasons that you might have received a denial notice from a private student loan lender is due to incomplete or inaccurate application information. This might include incorrectly reporting the school you’re going to, the amount of financial aid, grants, and scholarships you’ve received, and other factors. It is very important to make sure that when filling out a student loan application that you complete it in its entirety and also ensure that all the information you’ve supplied is accurate.

2.  No Credit or Poor Credit

If you’re a student just graduating from high school, chances are you don’t have any credit history on file. When student loan providers are looking to approve applications, they are looking for applicants who have a good standing credit history. This is how lenders determine if you’re trustworthy and responsible with your finances. Applicants with no credit history can prove to be a gamble for private lenders as they don’t know whether you will repay on time or not. Just the same, applicants who have a poor credit history can be rejected because they’ve proven to be irresponsible in the past with their finances. If you don’t have any credit or you have poor credit and are looking to obtain a private student loan, you may want to consider applying with a co-applicant such as a parent or improving your credit score and reapplying in the future.

3.  Low Income or No Income

Income certainly weighs a factor in whether or not a private student loan lender will provide you with the funds you’re looking for. Applicants may find that they are rejected if they have no or low income. Lenders again are looking to see how much of a liability you are and if you can repay the borrowed funds accordingly. Those applicants who do not have any income obviously will not be able to make timely loan payments.

4.  Poor Student Loan History

For applicants who are returning to college after a break or a past college experience, applying for a student loan while you still have outstanding loans might prove difficult. When reviewing your credit history, if lenders can see that you’ve defaulted on previous loans or never pay in a timely fashion, they may not be willing to give you another loan. Just the same for applicants who have high balances on their student loans, a new student loan provider might assume that you can’t afford to repay the loan when the time comes.

Try Government Student Loans

Now that you know why you were likely turned down, you can take the proper steps to rectify the matter. However, if you’re an applicant with low income, no credit, or bad credit, your best option might be to apply for a government student loan. Simple Tuition, a source that helps students with loans, points out that government student loans are a lot more flexible when it comes to eligibility requirements and they don’t refer to your credit or income as a means for approving your loan request. This will improve your chances of being approved so that you can have the necessary funds for your college education.

Affording a college education on your own is likely unheard of, as such; you need resources such as student loans to help you financially until you’re able to get on your feet. While private student loans can be beneficial in helping you pay for other educational costs outside of your tuition and fees, they can be difficult to be approved for if you have less than stellar credit or low income. If you’re having a hard time in finding the financial means to supplement your college expenses, be sure to consult with your school’s financial aid department. They may be able to provide you with a list of opportunities that can make affording college a lot easier.

For more information on student loan applications, check out these resources listed below:, 2015, Student Loans Without Credit Check.

Notre Dame of Maryland University, 2011. Tips for Selecting a Co-Signer or Endorser., 5 Ways to Get a Private Student Loan.

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