More often than not, if you're applying for a loan you are doing so because of a critical need for extra money. Now, whether this is just to get through to the end of the month or to make a major investment, such as buying a new car, receiving a rejection can be equally distressing. Not only will you have invested time and effort into the application process, but it could also negatively impact upon your credit score and reduce your chances of being accepted at some point in the future.

This is why you should only ever apply for a loan when you're fully satisfied that you meet the criteria, including that all important credit score. While it's not impossible to be rejected by one lender and accepted by another in quick succession, it is certainly much less likely. As all banks and other lenders use the same data to determine the suitability of applicants, any rejections and indiscretions are visible. So invariably, when you fail with one application, it is likely to appear within the checks of your next attempt.

This is why most banks recommend that you delay any future efforts to secure a loan for a fair few months. A spate of rejections within a relatively short period of time can have a detrimental impact on your long-term credit score, so you'd be wise to stop after a couple of rejections. That said, there are alternatives that may not be quite as damaging.

While not something that many want to consider, payday loans are a possible alternative - particularly when your situation is particularly dire. The major benefit with this form of short-term borrowing is that lenders don't tend to be as ruthless when it comes to credit checks and other criteria. Indeed, some may choose to ignore almost all suitability checks. While this makes it easier for the applicant, it can create issues - particularly when it comes to those consumers who aren't suited to borrowing due to their poor financial management.

A number of people will go to mainstream long-term lenders first and then seek out the alternatives as a secondary option. This is perhaps understandable, particularly if you require a significant amount of money. Remember, payday loans and equivalent financial products are designed almost exclusively for those looking for a relatively small amount of money (£100 to £400) over a short period of time (ordinarily a month or less).  

Sadly there isn't really any form of appeal process if you are rejected and it's important to remember that payday loans aren't guaranteed, nor are they suitable for all situations. If it isn't viable for your circumstances, whether it's simply because you don't have a guaranteed form of income or you've struggled with repayments in the past, then you shouldn't take any unnecessary risks. See what alternatives are available, including friends and family members of course, and then make a considered decision. Being rejected for a loan isn't always the end of the world; while it may be disheartening at the time, you may still be able to gain credit elsewhere. Whether you extend an overdraft or opt for a payday loan, the choice is very much yours.