Why might there be a denial? Why do banks refuse loans?

The decision to apply to a bank branch for a loan is not an easy decision for a person. Usually, such an opinion does not apply to spontaneous. More often, citizens come to it gradually, after weighing all the pros and cons. If the decision has already been made and there are no escape routes, it remains to collect the documents and go to the bank for approval and the required amount. This is the main scenario. But there are no rules without exceptions. Often there are situations when a potential client is denied a loan in all banks for some reason, and the reasons remain unknown.

How to find out the exact reason for a loan denial

Usually, bank employees try not to talk about how each candidate is considered. About the factors that influence the decision. Maybe, complete list qualities do not exist and it is unlikely that it will ever appear. One can only speculate how potential borrowers are considered.

Why they may refuse to lend

In most situations, the reasons are obvious. These include low wages, delinquencies and penalties in the credit history, the presence of other loans.

It is worth considering some of them in more detail:

• 1. Low income. This reason is considered one of the most obvious. The solvency of the client depends on the size of the salary. Usually, the average income received in the last six months is calculated. To do this, some banks ask for a certificate from the place of employment - 2 personal income tax. If the total figure for the loan exceeds the level of wages by 30-50%, this is a guarantee of a rejected application.
• 2. Little work experience, young age. Banks trust those potential clients who have been officially employed at their last job for more than six months. Also, bank employees prefer people over 25 years old with a stable income.
• 3. Bad credit history. It is called such if at the time of application there are loans that are not repaid and have overdue payments. This signal characterizes the client as insolvent and irresponsible. These include persistent non-payers who systematically do not pay.
• 4. Availability of active loans. As a rule, it is allowed to have up to five valid loan agreements. However, you need to remember about the condition - the amount of loans should not be more than 50% of the total income.
• 5. Other reasons. They are not so common, but can also be the basis for failure. These include the absence of previous loans, employment with individual entrepreneurs, the presence of small or medium-sized businesses; incorrect information about the employer, place or purpose.

What to do if the bank refused

First of all, don't panic. You can easily contact any other bank branch. You need to understand that the refusal cannot be groundless. It is important to remember that behind any loan lies a solid foundation. If the terms of payments are softer, and anyone can take a loan, then their rates are very high. In this way, the organization minimizes all possible risks and insures itself.

Ask your questions and I will gladly answer them. I really hope that you will not have to ask yourself why they are denied a loan in all banks after reading my article.

Credit - good way temporarily improve their financial situation and cope with the difficulties that have piled on. But sometimes almost everywhere you have to hear a refusal. So why are they denied credit in all banks? What prevents them from issuing money if the credit history is not spoiled? And how to find out what factors prevent you from getting money?

To understand this issue, it is necessary to seriously consider the basic requirements that banks will present to their customers. At the same time, it must be remembered that, in addition to the directly indicated factors, there are special reasons that are usually hushed up.

What is important for getting a loan?

To get a loan, you need to collect and submit a large package of documents to the bank. In addition, it is necessary to comply with a number of bank requirements, without which it is pointless to expect to receive money. At the same time, different banks evaluate their borrowers differently, giving the same facts absolutely opposite significance.

But in general, if we discard the features of individual credit institutions, the requirements are the same everywhere. Credit is affected by:

1. solvency of the borrower;
2. client's credit history;
3. a number of formal requirements;
4. intended purpose of the loan (individual entrepreneurs do not give loans intended for individuals);
5. informal information about the borrower received by banks through their own information channels.

All this can affect both the very fact of issuing a loan, and its size. In addition, the interest rate on the loan also depends on the information collected by the bank.

At the same time, you should not try to deceive a credit institution, since almost all the information necessary for issuing a debt can be easily verified. Not the best data can provide Negative influence for loan approval, but an attempt to deceive the bank will definitely lead to a denial of money. Moreover, other potential creditors will probably find out about what happened.

Why can't you get a loan with a good credit history?

The bank cannot issue a loan without being sure of the mandatory repayment of the debt. Therefore, whatever the credit history, the most great importance to obtain a loan has the solvency of the client.

At the same time, the presence of a large salary does not always guarantee the approval of the application. The bank evaluates not only the income of the borrower, but also the stability of the company in which he works, the career prospects of the potential debtor, his current expenses, the presence of dependents. That is, everything that affects the financial situation of a person matters, and this may be the main answer to the question of why a loan is not approved.

At the same time, you can confirm solvency in a variety of ways:

• providing information about the official salary from work;
• providing the bank with data on tax payments;
• indicating the presence of a bank account to which money is constantly and steadily received;
• showing various contracts confirming the presence of a regular income.

But the most important confirmation is still the salary. And the rest of the income may not give the desired effect, leaving the borrower without money.

Credit history

In second place in importance for banks is the credit history of a potential debtor. It is she who is the main confirmation of his responsibility and willingness to pay the bill.

At the same time, the history where all payments were made exactly on time would be ideal for the bank. Due to delays, they may not give a new loan. The presence of early repayment in the history will not add pluses. In this case, there are less interest payments, which every credit institution would like to avoid.

Sometimes strange situations occur when a person knows for sure that he has never made delays, and for some reason his credit history is damaged. This can happen due to the banal inattention of bank employees: one mistake made can lead to other people's delays falling into the history of a conscientious borrower.

To correct such an absurdity, you need to challenge the credit history in the credit bureau. As a rule, this is quite easy to do.

Why don't you get a loan from any bank?

Another answer to the question of why banks refuse a loan can be a banal non-compliance of the borrower with some simple but important requirements. These include:

• age;
• registration;
• seniority;
• citizenship;
• lack of credit history.

That is, this list includes something that cannot be changed instantly and is very difficult to hide. Moreover, each condition presented is very easy to check. This will allow the credit company to verify the honesty of the client and save themselves from unnecessary suspicions.

Age is of particular importance. So, not all banks are ready to issue loans to persons under 21 years old. It will not be possible to obtain approval for those who, by the time the loan is fully repaid, will be over 70 years old.

Do not be afraid of refusal of a loan to people who decide to take it for the first time. If there is no credit history, it will not be possible to obtain favorable conditions, but this will not prevent bank employees from approving the debt.

Purpose of the loan

The purpose of the loan is very important for making a decision. This question is especially relevant for start-up entrepreneurs who wish to take out a consumer loan for commercial purposes. As a rule, the purpose of the loan affects the riskiness of the loan. That is, if the Post Bank calculated the interest rate, not taking into account the fact that the borrower can invest in the business and lose all the money, it will be lower than if he knew about the client's intentions.

In this case, it’s definitely not worth deceiving creditors, it would be much more reasonable to prepare the right business plan, which will become a reliable help in obtaining money.

Other reasons for refusing a loan

In addition to the above reasons for refusals to issue a loan, there may be other important reasons to reject the submitted application. As a rule, they are informal and not disclosed. These include whether the potential debtor has a criminal record. This factor increases the risk that the lender takes, while reducing the chances of issuing money.

The next reason for refusal can be outstanding debts of the borrower's relatives or simply a bad credit history of his relatives.

The next factor to consider when obtaining a loan is the presence of debts. Any tax debt, outstanding fine, unpaid alimony will make the bank wary and think about whether to trust such a person.

In addition, the place of work of the client may have a significant impact on the decision on the loan. If its activities are associated with a risk to life, a financial institution will try to play it safe by presenting more stringent requirements for such a borrower or even refusing him.

How to avoid a loan rejection?

There is no universal way to avoid loan refusals. Moreover, there is not even an answer to the question of how to find out why banks do not give loans. Credit institutions are not required to explain their decision to customers. At the same time, you can still find out the official reason for the refusal now, in 2017. To do this, you need to request your credit history from the credit bureau.

It is important that each bank has its own requirements for customers. Moreover, the final decision on the issuance of money is made by the employees of the institution, who in similar situations are able to make different decisions. Therefore, if it was not possible to get the required amount in one place, it is worth trying to apply in another.

Not a single bank will indicate the reasons for refusing a loan. Only individual employees of credit organizations can lift the veil of secrecy and help you figure out why banks refuse loans, even with a good credit history. It is necessary to determine the main reasons for refusing to lend in order to understand whether it will be possible to get a loan even before contacting the bank.

Reasons for bank refusal

Insufficient solvency

When calculating the solvency of a potential borrower, banks use data on the client's official income level. To receive a large amount for those who receive the main salary in the form of bonuses in envelopes, even in big company, will fail. A sufficient level of income is considered to cover the mandatory monthly payments on the requested loan, taking into account accrued interest, payments on enforcement orders and alimony, and for each member of the borrower's family there will still be an amount of at least the subsistence level.

Existence of other obligations

Solvency is affected by other loans, because the bank takes into account payments on them when assessing the adequacy of income. Remember, the lender will take into account the obligations for which you act not as a borrower or co-borrower, but also as a guarantor. The presence of a credit limit on the card can also cause a refusal, even if the credit card is not used, but simply lies as an emergency reserve of funds in case you need to urgently improve your health or just relax abroad.

Bad reputation and damaged credit history

Having received the borrower's credit file, the bank will see the committed violations of the obligations taken, information about fraud attempts or the judge's decision to collect debts - claims for damages, payment of alimony, repayment of debts to individuals are taken into account. A single short delay, made for technical reasons, is unlikely to lead to a refusal, but if there are repeated delays, you should not wait for approval on the application, since the bank will consider it to be an insufficiently disciplined borrower.

Incorrect information in the application

If the borrower, hoping for an insufficiently thorough check of the lender, indicates information in the application form that does not correspond to reality, tries to lie about the amount of his own income, conceals current obligations to another bank, or simply forgets any data or simply makes 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 unreliability of the borrower, his family members, loan guarantors. There are other reasons for refusal that do not depend on the borrower:

• lack of available funds from the bank at the moment,
• tacit refusals to issue loans to individual entrepreneurs,
• statistics on non-repayment of loans to the bank by a certain category of clients - young people of military age, students or employees of public catering enterprises.

If everything is in order with the credit history and the other criteria meet the requirements of the bank, but will be refused, you can contact another lender, or apply to the same bank later.

How to increase your chances of getting a loan

No one will give a 100% guarantee of a positive response to a loan application, but it is possible to increase the chances of a loan being approved. Necessary:

1. Provide the potential lender with all the information as accurately and honestly as possible.
2. Pre-familiarize yourself with your own credit file by requesting it from the credit bureau.
3. Provide additional collateral for the requested loan - a pledge of liquid property, a guarantee of reliable and solvent individuals, attraction of co-borrowers, insurance.
4. Timely fulfill obligations to creditors, earning a reputation as a conscientious and disciplined borrower.

You can do the opposite - go to a bank that is not so selective in choosing customers, and get money without checking credit history, without certificates and guarantors, without collateral. In this case, get ready for an increased interest rate and high fees for servicing the loan.