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For bad credit borrowers, the hunt for an affordable loan package can take a little time. Online lenders are willing to approve personal loans with bad credit, and the internet has made it easier to track down the best offers. But there is no guarantee of loan approval.

In many cases, an application is rejected leaving the applicant to continue their search. However, it is important to understand that rejected loan applications have been rejected for a reason. And with a reason, there is a way to prevent that outcome.

What may be embraced as good news is that fact that avoiding rejection is very possible, and requires some pre-planning, consideration and a commitment to the purpose at hand. In fact, there are really on 4 reasons why a personal loan might be rejected.

1. No Employment or Income

This is probably the most logical reason, with unemployed applicants showing no ability to make any loan repayments. Getting a personal loan with bad credit is difficult enough, but it is possible when the lenders concentrate on income and the ability to repay the loan. With no income, there is no way to pay.

There are some unemployment loans that can be considered of course, but these are for the recently unemployed to benefit from. Anyone who is long-term unemployed or has never held down a real job have to get used to rejected loan applications.

2. Very Low Credit Ratings

Perhaps the second-most logical reason is that the credit rating the applicant had was just too low. Many lenders will entertain personal loan applications from bad credit borrowers, but only very few will consider them from applicants with a score of less than 550.

In general, 550-650 is considered a bad credit score, while applicants with lower than that are considered very high-risk. The result is to see the chances of getting a personal loan with bad credit plummet, not least because the interest rate charged helps to make the repayments too expensive anyway.

3. No Credit History At All

This is something of a grey area, since the lack of a credit history is no proof that the borrower is high risk. But lenders are cautious by nature and see the glass as being half empty, which only leads to a higher number of rejected loan applications.

Still, it does depend on the lender and on the actual loan being sought. There is very little chance of getting a large personal loan (,000 or more), but getting a small ,000 loan is more likely. Once a few of these are repaid, the credit history is established and larger sums are within reach.

4. No Assets to Provide as Security

The golden word in the lending industry is security. Even if an applicant has a zero credit rating, a loan can be approved if security is provided. This is usually through an item used as collateral, but can also be through a cosigner. So, getting a personal loan with bad credit is technically always possible.

However, having collateral is the problem. Assets used must match the sum required, so for a ,000 loan something worth ,000 needs to be offered up. Often rejected loan applications are submitted with average income and average credit score (600), but with nothing offered as security.

And if lender decides not to accept the risk, even the other factors are acceptable, then the personal loan is rejected.