The most common reasons why loan applications are rejected are: Poor credit score. A low credit score is a major red flag for lenders, as it indicates that you may be a risky borrower. High debt-to-income ratio. A high debt-to-income ratio means that you're already stretched thin financially, which makes it more difficult to afford the monthly loan payments. Lack of collateral. Some loans require collateral, such as a home or a car. If you don't have any collateral to offer, lenders are less likely to approve your loan. Errors on your credit report. Errors on your credit report can lower your credit score and make it more difficult to get approved for a loan. Not meeting the lender's requirements. Each lender has its own set of requirements for loan approval. If you don't meet the lender's requirements, your application will likely be rejected.