Now the question is why banks denied credit is current for many. It seems difficult to get borrowed money at the above institutions that actively advertise lending programs and assure citizens that they lend money, and the registration process will only take 20 minutes?
However, not everything is as simple as it may seem. In practice, the situation often happens when an employee of a financial institution tells a potential borrower, “I’m sorry, but we can’t lend you money.” Here, the question of why banks refuse loans is proposed by itself.
How to respond to credit rejection
If you have heard the phrase above, do not be discouraged and do not panic.
A situation where a person is denied credit reasons for not expressing it, – quite common. Note that the bank clerk is not obliged to explain to you why the credit refusal decision was taken.
To minimize these risks in the future, ask him to keep saying why you did not get into the debtor’s role. It is likely that the Financial Officer will contact you to explain the complexity of the situation.
However, it should be noted that there are many reasons why banks are denied loans. Consider the most common.
Causes of failure
Once again, we emphasize what to foresee why you cannot borrow money, it is quite difficult. If one knows at least the basics of banking.
Then he can at least partially anticipate the situation and develop appropriate behavioral tactics. However, it is often difficult for the average person to understand why banks are denied loans and, most likely, without the help of experts. In any case, this information will be interesting for him.
Maybe someone thinks there are banks that refuse to lend? unfortunately, there are none, but there are financial structures that are more faithful to others than borrowers.
Insufficient income
First, the credit institution asks how one intends to repay the main debt and pay interest on it. To determine the approximate amount of borrowed funds that a client can rely on, they must divide their monthly income into two.
That is the size of the loan will be considered by the bank. If your case is equal to 15,000 USD, you are unlikely to receive 30,000 USD. For this reason, Good Credit refused to recognize many of its customers. And this institution is no exception.
Remember the minimum requirements
Each financial and credit structure has its own set of requirements for potential borrowers. In this case, several general conditions must be met.
Official employment
It is very important for a banking institution that a person receiving money in debt has a stable source of income, ie he works under a contract of employment.
And the experience in the last workplace should be no less than 3-4 months. Of course, there are credit organizations that do not need any income, but it is better to secure this in advance.
Age
Many financial structures consider the age criterion when considering the issue of borrowing. For example, the Moscow Bank refused a loan to those who were not 21 years old. And it’s important to keep in mind age limits. As a rule, borrowers over 70 years of age cannot expect to receive a loan.
Permanent registration
Most financial institutions give loans only to those customers who have a permanent registration. This should also be reminded of those who intend to ask for money in debt. For example, Summer Bank denies the loan to borrowers with temporary residence permits.
Criminal record
If someone has had problems with the law in the past and has suffered a deserved punishment, then their chances of getting a loan at a financial institution are very illusory.
However, if the infringements were not serious, some banks may grant a loan for a loan, but in any case, the criminal record must be extinct.
The potential for credit programs has been exhausted.
Often there are situations where the bank refuses credit to the most trusted borrower. Why is it happening? The fact is that there are situations where the financial structure has exhausted the limit that has been allocated on loans.
In most cases, this problem concerns small banking institutions whose management simply does not want to admit that their financial resources remain too desirable.
Profession and nationality
Many credit organizations are afraid to sign a contract with clients of certain professions. This list generally includes firefighters, police officers, ministry employees. Representatives of these professions are at risk of losing health or life every day. In this case, of course, early repayment guarantees are minimal.
Banks also do not want to lend to immigrants from Central Asia. Tajiks and Uzbeks are often interrupted by occasional earnings and do not have a permanent residence permit.
Bad credit history
If a person has already provided loans in the past and if you don’t pay them on time, it is also a serious argument that the bank will not lend money. Moreover, it is not at all interested in whether a person is late in payments for legitimate reasons.
Some financial institutions are ready to “close our eyes” on the above issue and spend the borrowed funds on the client. However, their list is limited. In any case, delays are decided according to the timeframe, so the chances of getting a loan are greater where there are fewer late payments.
It is worth noting that the client can absolutely know about their own credit history, especially if this is unfavorable. The situation is ridiculous when a person decides to take out a loan for the first time and at the same time finds out that they have already overdue. Of course, the fraudsters had a “hand” here who fraudulently seized the debtor’s passport.
The human factor in the above cannot exclude the situation. None of the Bank’s employees is safe from accidentally confusing one person’s information with another and entering it into someone else’s credit history. We can, therefore, conclude that the lack of credit commitments in the past is not a guarantee of perfect credit history.
Once more about income
It should be noted that the indication of high income may also lead to a refusal to issue borrowed funds. How can this be explained? The fact is that a bank may question the fact that a debtor received a “high” salary if, for example, he mentioned a programmer in the “Professions” column.
If the level of wages still coincides with the declared level, the financial and credit institution may suspect that the employer is stable because it allows them to pay such money to their employees.
A situation when, when a relatively high salary, the borrower wants to borrow a small amount. Such a client is usually not uninteresting for the bank, because the loan can be repaid in a few months, respectively. You won’t get much profit from it.
Potential borrowers may be advised to indicate in their loan application the maximum maturity of their monetary liabilities, as the income of banks depends on interest.