Unify Credit Union


Has a loan been deemed unaffordable for you?

Thursday 17th Oct, 2019

Why have I been refused a loan?

The first step is to find out why your loan application was not approved.

The most common reasons for being denied credit are:

1. Problems with your credit file (Click HERE to read article about your Credit File)

2. Not enough income (affordability)




Not enough income: As responsible lenders, Unify has to be satisfied that you’re able to make the minimum re-payments before we approve your loan. We look at your income and expenditure and if it doesn’t look like you’ll be able to afford the new debt, your application may be rejected.

Pay down debt: remember that your existing loans affect your ability to get new loans. Paying off old debt will increase the amount of your monthly income that’s available for newer loans.

Increase income: earning more is easier said than done, but it’s worth at least paying attention to your income when you need to borrow money. If you are earning a low income, are the carer for another person or in receipt of benefits; it may be worth looking to see if you are entitled to any additional benefits or if perhaps you should be receiving more based on your specific circumstances. You can check this on the government’s website: https://www.gov.uk/benefits-calculators

Review your budget/outgoings: It may be worth you sitting down with a pen and paper or even use an app on your phone and write down for yourself your income and all your necessary bills and outgoings to compare your figures. Are you spending all of, most of or more than your income on your bills? If you are then you only just have enough income to cover your day-today living costs, it would not be responsible for Unify to give a person a loan if they can’t afford to repay it.

If you do have money left over after all your bills, then that is better. However if you have been refused a loan it might be worthwhile to compare your list to your bank statement. Have you missed anything? Netflix, Amazon Prime, Catalogue Repayments, Pet Insurance, Door-step Loan? Add them on to your expenditure. Don’t forget to double check you haven’t been rounding down on any of your estimations of your bills. If you are a person who does not do one regular weekly shop, then check how much you actually spend on food by adding up the daily transactions that you spend at the shops, cafes and takeaways.

Reduce unnecessary bills if you can: If you are worried about the amount of outgoings that you currently have then see if there is the option to cut out some of your outgoings. For some that may mean eating out less. By cutting out 2 coffees at a coffee shop (2 x £3 coffees) and a weekly takeaway (approx. £15) you could save yourself £91 per month.

Another way of reducing your bills is by getting rid of unused subscriptions. Are you paying for Sky TV, Netflix, NOW TV and Amazon Prime? If you don’t really use all of them, then get rid of them for now, you can always re-subscribe when you are more financially stable.


Assess your money using these online calculators by The Money Advice Service:




Before you Re-Apply

Save yourself some time and frustration before you apply for your next loan. Look at yourself the same way lenders do: are there any red flags in your credit, and do you have sufficient income to repay the loan?

Go through your credit report, and feel free to ask Unify if anything is going to be a problem – it’s going to come up anyway if you apply for a loan. We’ll gladly explain what matters and what doesn’t.

Please note that being refused a loan doesn’t mean that we can never give you a loan again. For many it may just mean not right now, many members will be able to continue to borrow from us, after they make some changes to their financial circumstances.



For more information visit our website http://unifycu.org/links.php where you will find links to advice and support


Unify Credit Union is Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (FRN 213321)


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