Loans

Borrow from £1,000 to £25,000 and repay from your salary at rates from as low as 4.5% APR.

Savings

Get into the savings habit with regular savings deducted directly from your armed forces salary.

About us

Forces Finance is delivered in partnership between London Mutual Credit Union and the MOD.

How it Works

Decide how much you’d like to save each month or borrow, and we’ll arrange the with your employer.

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Turned Down For a Loan? Don’t Panic

A loan rejection can feel deflating and frustrating. It is important to understand why this might have happened, and how to avoid your application being turned down.
Woman looking at paperwork looking annoyed

Rejection never feels good, and with money, it’s no different. Whether it’s being turned down for a loan, or trying to increase your credit limit and not being approved, it happens to the best of us.

That said, being turned down for credit is never a nice feeling. It’s entirely reasonable to feel disappointed, dejected, or even angry if you feel the decision was unfair. And because lending decisions are based on personal information, it’s hard not to take it personally.

But the truth is, it happens, and for all kinds of reasons. It’s not worth taking it as a judgement on you or a criticism. Lending decisions are based on a range of different factors. You haven’t done anything wrong by applying, and you’re definitely not being told off!

And the good news. By taking a few minutes to understand how the system works, you can remove the barriers, and maximise your chances of being accepted next time.

Stop! Don’t apply for more loans

First things first. As the saying goes, stop digging. Multiple applications over a short timeframe can lead some lenders to decide you are desperate for money, and potentially higher risk. This makes them more likely to reject you as well. While some lenders (including Forces Finance) do a ‘soft’ credit search that protects your credit score, not all do.

Because of this, it’s best to take a bit of time to work out what might have gone wrong and to think carefully before trying again.

Why was the application rejected?

If your application for a loan or credit has been rejected, start off by finding out as much as you can about why. Many lenders will be happy to provide details and further information about their decision.

The next port of call should be the credit referencing agency themselves. Most lenders in the UK use one of 3 main credit agencies. You can find out more about how to check your score here.

Credit is not the only thing lenders look at.  Some people have solid credit histories but still miss out. Why? Often, they fall down on affordability criteria—that is, how likely they are to be able to afford the repayments. Or sometimes, lenders might spot evidence of risky financial habits, like heavy gambling or substance issues. More on why your loan application may have been unsuccessful.

Work on improving your credit history

Improving your credit is not a quick task and it can take months or even years to see significant changes. That being said, you can take some simple steps to get on the right track:

  • Paying off any existing debts/loans you have before applying for more
  • Adding your address to the electoral roll
  • Paying off a contract or credit agreement consitently and on time
  • Taking out a credit card, and paying it off in full each month*

*You should only consider this option if you are confident of your ability to control your spending and to pay on time!

Consider your options

Once you have worked out why lenders might have turned you down originally, you’re in a good position to decide what to do next. It’s worth thinking about:

  • Whether you really need to borrow. Do you need it for something important, or is it for a luxury? If you are borrowing money to keep up with trends, follow the crowd or have the latest model, then it may be worth holding off.
  • Applying for a smaller amount. If lenders have rejected you in the past, you could try (after sorting out any issues with your credit score) applying for a smaller amount. Lenders are likely to see smaller loans as lower-risk, and so more likely to say yes. Once you have a track record of paying off your loans, you may be able to borrow more in future.
  • Considering more expensive options. Sometimes, you’ll be more likely to be accepted for more expensive products with higher rates of APR. Cheaper borrowing options may then become available in future after you pay it off. However, always steer clear of ilegal loan sharks and ultra-high cost online lenders.

Your Credit Union

As a credit union, we work towards a positive outcome wherever we can. And although we won’t always be able to say yes, we will always be fair:

  • Risk-free applications are standard on all our loans. There are no negative consequences for your credit file if you aren’t accepted.
  • If we can’t offer you the full amount, we may be able to offer you a lower amount as an alternative.
  • Each time you repay your loan, we’ll report it to the credit referencing agencies, helping you to build a positive credit history
  • If we can’t offer you a loan, we’ll be clear and transparent about our reasons for not doing so.

Discover a better way to borrow and build credit with Forces Finance, provided by London Mutual Credit Union.

Good to Know

The contents of this article are intended for informational purposes only, and do not constitute financial advice. Always consult a qualified professional for independent advice if you are unsure about whether a financial product or strategy is suitable for you.

All loans are subject to our loans policy and availability. The amount and rate that we may offer you may differ based on our assessment of your personal circumstances. Applying for a loan may affect your future ability to take out credit.

Holly Hunt

Holly is Digital Marketing Officer at London Mutual, and oversees our online content, email newsletters and promoting our services to members.

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