No bank will indicate the reasons for refusing a loan. Only individual employees of credit organizations can open the veil of mystery and help to understand why banks refuse credit, even with a good credit history. It is necessary to identify the main reasons for the refusal of credit in order to understand whether it will be possible to get a loan even before applying to the bank.
Reasons for bank refusal in credit
Insufficient solvency
When calculating the solvency of a potential borrower, banks use data on the official income level of the client. It will not be possible to get a large sum to those who receive the basic salary in the form of premiums in envelopes, even in a large company. A sufficient level of income is considered to cover the mandatory monthly payments for the requested loan, taking into account the accrued interest, payments on writ of execution and alimony, and for each member of the borrower's family there will still be at least a living wage.
Other obligations
Other loans influence solvency, because the bank takes into account payments on them when assessing the adequacy of income.
The presence of a credit limit on a card can also cause a refusal, even if the credit card is not used, but simply lies as an untouchable supply of funds in case you need to urgently improve your health or just relax abroad.
Negative reputation and bad credit history
Having received the borrower's credit dossier, the bank will see the violations committed, the information about fraud attempts or decisions judges debt collection - claims for damages, payment of alimony, return of debts to private individuals are taken into account. A single short delay, made for technical reasons, is unlikely to lead to a failure, but if the delay is repeated, you should not expect approval on the application, as the bank considers it to be an insufficiently disciplined borrower.
Invalid information in the application
If the borrower, hoping for a insufficiently thorough verification of the lender, indicates in the application form information that does not correspond to reality, tries to lie about his own income, withhold current obligations to another bank, or simply forget some data or just make a mistake, the bank may immediately lose confidence and make a negative decision to grant a loan.
The bank will not approve the loan application if it finds the unreliability of the borrower, members of his family, loan guarantors. There are other reasons for the refusal, independent of the borrower:
- lack of available funds at the bank at the moment,
- tacit denied loans individual entrepreneurs,
- statistics on non-repayment of loans to a bank by a certain category of customers - young people of military age, students or employees of catering establishments.
If everything is in order with the credit history and the other criteria correspond to the requirements of the bank, but receive a refusal, you can contact another creditor or apply to the same bank later.
How to increase the chance to get a loan
No one will give a 100% guarantee of receiving a positive response on a loan application, but it is possible to increase the chances of approving a loan. It is necessary:
- As accurately and honestly as possible tell the potential lender all the information.
- Previously familiarize yourself with your own credit dossier by requesting it from the credit bureau.
- Provide additional security for the requested loan - a guarantee of liquid property, surety of reliable and solvent individuals, attraction of co-borrowers, insurance.
- Timely fulfill obligations to creditors, earning a reputation as a bona fide and disciplined borrower.
You can do the opposite - go to a bank that is not so selective in choosing customers, and get money without credit check, without information and guarantors, without collateral. In this case, get ready for an increased interest rate and high loan servicing fees.
