When a bank loan is denied, individuals should first review the denial reason and financial health. Options include improving credit scores, securing cosigners, or seeking alternative lenders. Refinancing with better terms or negotiating payment plans with existing creditors may also help. For business loans, revising the business plan or providing additional collateral could be necessary.

Denial often stems from credit score issues, insufficient income, or poor credit history. The Consumer Financial Protection Bureau (CFPB) reports that 60% of rejected loans involve credit score problems, while 30% lack stable employment or income documentation. Alternative lenders, such as peer-to-peer platforms or online financial institutions, offer approval rates up to 40% higher than traditional banks, according to the Federal Reserve. These alternatives often use alternative data like transaction history or utility payments to assess risk. For example, the SBA’s 7(a) loan program approved 90% of applications in 2022, emphasizing government-backed options. Refinancing through credit unions or community banks may also provide lower interest rates (8-12% vs. 12-18% from online lenders). Proactive communication with creditors and leveraging financial counseling services can further mitigate rejection risks, as 70% of applicants who revise applications after feedback achieve approval, per the FDIC.