Loan Denial? How to Effectively Appeal and Reconsider Your Application

How to appeal a denied loan.

To get a loan, you must fit the lender's criteria. Federal law requires lenders to tell you if they deny your application due to information on your credit report, and many lenders will provide the exact reason in the denial notice. If you believe the lender denied your application because of an error on your credit report or elsewhere in your application, you can appeal to the lender for reconsideration.

Step 1

Gather documentation that proves you qualify for the loan. This includes additional proof of income or a corrected credit report if you were denied based on an incorrect credit history.

Step 2

Contact the lender by phone or visit the bank in person. Take your documentation if you go to the bank. Tell the representative you were recently denied for a loan but would like reconsideration. Give the representative your name, address, Social Security number and date of birth so your application can be accessed.

Step 3

Tell the representative why you think you qualify for the loan or where the lender may have made a mistake during the underwriting process. If you visited the bank, give the representative your documentation. She will make copies and submit them to the underwriter for reconsideration. Mail or fax the documentation to the lender if you made your request by phone.

Step 4

Wait for the lender to make a decision. You likely will hear back within a week because the lender does not have to go over your entire application, just the new information you provided. If your documentation is strong enough, the lender will reverse its previous decision and give you the loan. If not, the lender will not consider any further appeals unless the situation that caused your denial changes or you find a co-signer with adequate income and credit history.