Why banks are denied a loan: the reasons

The question now is why bank refusal is topical for many. It seems that the hard part is getting borrowed money in the above institutions, which are actively promoting loan programs and assuring citizens that they can easily lend money, and the registration process takes only 20 minutes.

However, not everything is as simple as it may appear at first glance. In practice, it often happens that an employee of a financial institution says to a potential borrower: “I apologize, but we cannot lend you money.” This raises the question of why banks refuse loans.

How to respond to a denial of credit

bank

If you’ve heard the sentence above, don’t get discouraged and don’t panic.

A situation where a person is denied a loan, the reasons for which are not spoken to him – quite often. Note that a bank employee is under no obligation to explain to you the reasons why the decision to refuse to issue a loan was made.

To minimize such risks in the future, still, ask him to say why you didn’t get the role of the borrower. It is likely that the finance officer will contact you and explain the complexity of the situation.

However, it should be noted that there are many reasons why banks are denied a loan. Consider the most common.

Causes of failure

We reiterate what to look for, why you can’t borrow money, it’s pretty difficult. Well, if someone knows at least the basics of banking. Then he can at least partially predict the situation and develop appropriate behavioral tactics. But the average citizen is often difficult to understand why banks are denied a loan, and without the help of specialists, they most likely cannot. In any case, the following information is of interest to him.

Maybe someone thinks that there are banks that don’t refuse to borrow? Unfortunately, there are none, but there are financial structures that are more loyal to the rest than the borrowers.

Insufficient income

money

Every credit institution first wonders how someone wants to pay back the principal and pay interest on it. To determine the approximate amount of borrowed funds that the customer can count on, they must divide their monthly income by two. That is the size of the loan is taken into account by the bank.

In your case, if it equals 15,000 dollars, you are unlikely to get 30,000 dollars. For this reason, Good Finance refused to credit many of its customers. And this institution is no exception.

Observe the minimum requirements

Each finance and credit structure has its own requirements for potential borrowers. In this case, there are several general conditions that must be observed.

Official employment

For a banking institution, it is very important that a person who borrows money has a stable source of income, that is, he works under an employment contract.

And the experience at the last job should not be less than 3-4 months. Of course, there are credit institutions that do not need income certificates, but it is better to hedge in advance on this matter.

Age

Many financial structures are being examined The age criterion is taken into account when issuing external funds. For example, the Bank of Moscow has denied a loan to anyone under the age of 21. It is also important to remember age limits. Borrowers who are older than 70 years can usually not count on a loan.

Permanent registration

Most financial institutions only give credit to customers with permanent registration. This should also be remembered by those who plan to charge money in debt. For example, Summer Bank refuses a loan to borrowers with a temporary residence permit.

If someone has had problems with the law in the past and received a well-deserved punishment for it, their chances of getting a loan from a financial institution are very illusory.

However, if the unlawful acts were not serious, some banks can grant a loan, but in any case, the criminal record must be deleted.

The potential for credit programs has been exhausted

The potential for credit programs has been exhausted

There are often situations in which a bank refuses credit to the most trusted borrower. Why does that happen? The fact is that there are times when the financial structure has exhausted the lending limit. In most cases, this problem affects small banks whose management simply doesn’t want to admit that their financial resources leave something to be desired.

Professions and nationalities

Many credit institutions fear to sign a contract with customers of certain professions. Typically, this list includes firefighters, police officers, and the Department of Civil Protection officials. Representatives of these professions run the risk of losing their health or life on a daily basis. In this case, of course, the guarantees for timely repayment of the loan are minimal.

Bad credit rating

If a person has already made loans in the past and has not paid them back on time, this is also a weighty argument for the bank not to borrow money. And he doesn’t care at all whether the person had delays in payment for legitimate reasons.

However, some financial institutions, we are ready to close our eyes to the above problem and to spend funds borrowed from the client. However, your list is limited. In any case, the problem of delay is decided based on the time frame, so the chances of getting a loan are greater if fewer late payments are made.

What is remarkable is the fact that the customer can absolutely do not know anything about your own creditworthiness, especially if it is unfavorable. The situation is ridiculous when a person first chooses a loan and at the same time realizes that they have previously received late payments. Of course, fraudsters had “one hand” here that fraudulently confiscated the passport of such a borrower.

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