What to do when the banks turn you down

Posted in Getting Started
What to do when the banks turn you down

Having your home loan application declined happens to thousands of people every year. But if it happens to you, don’t be discouraged.

At Pepper, we do not believe in a one-size fits all approach to your loan applications. We explain what to do when the banks turn you down.

Major banks’ home loan processes
Many major banks and other traditional lenders use an automated credit scoring process, which means your application may be declined simply because the computer gives your application a score based on your past credit history.
A rejected loan by a traditional lender may also be a reflection of the lender’s credit policy, which loosens or tightens based on market conditions and risk management processes.
This means a borrower may have had no issues obtaining a loan from a bank in more robust economic times, but may be rejected in tougher climates, such as shortly after the global financial crisis – despite having no changes in their individual financial circumstances.
Non-bank home loan processes
While it can be disheartening to be rejected by a bank there is light at the end of the tunnel. Non-bank lenders, like Pepper, can offer you a different approach to home loan applications. Perhaps you don't have up to date tax returns, because you are self-employed or you have filed for bankruptcy in the past? These circumstances may not fit a traditional lender’s loan suitability and credit assessment criteria but with some non-bank lenders, such as Pepper, your application is assessed individually by an underwriter against our loan suitability and credit assessment criteria. So each application is assessed on its individual merits, rather than being appraised against an overarching credit score.
When it comes to home loan applications, if you have defaults or judgements against your name, we can still consider your application and you may still be eligible for a Pepper home loan that suits your needs, provided we are satisfied that your application complies with our  normal credit assessment and loan suitability criteria. We are more concerned with assessing why the defaults and judgements occurred, your current means of income, your ongoing ability to repay the loan without incurring financial hardship, where the property is located and the size of your deposit. We assess a range of factors so that we can determine your requirements and objectives for the finance. Approval will be determined based on our lending policy.
Many borrowers make the mistake of taking a back seat once they’ve been declined and wait years until they pluck up the courage to apply again. But you don't need to wait for a bank to lend to you. At Pepper, we believe everyone has the right to achieve their financial goals and we make it our mission to offer other avenues that traditional lenders may not offer. So speak to us today on 13 73 77 about how we may be able to help when the major banks say ‘no’ to your loan application.

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