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Wilmington Trust How much does Car loan without down payment Which is better What to do
Wilmington Trust How much does Car loan without down payment Which is better What to do
Corporate & Institutional

What to do if all banks are denied a loan?

If you are denied a loan, then there is a good reason for this, try to identify it and fix it. Here is a list of approximate reasons for refusing to grant a loan, of course, they may differ in different banks:

The borrower has a very bad credit history.

Namely, loans were issued more than once, and there were also repeated violations of the repayment terms. In this case, the risk of the same violations on the requested loan is too great.

Age.

There is a minimum age, and there is a maximum. Most banks consider people under 21 to be insolvent. The maximum age at the end of the loan period is usually not more than 65-70 years. Although there are banks specializing in lending to retirees. But the amounts there will be small, and the terms short.

Lack of an official place of work.

Here banks will be interested in the term of work in the last place (preferably from six months). The total duration of work over the past 5 years (at least a year) is also important. If a person does not work for a long time in one place, the likelihood of defaults increases, as does the risk of the bank. Low income. Banks understand that in our country, part of wages is gray. Therefore, we are ready to accept certificates from the accounting department in which the borrower works, in an agreed form. If all income is official, confirmed by relevant documents, the terms of the contract may be more beneficial. From October 1, 2019, credit organizations are obliged to calculate the debt load of borrowers, and by the end of the year it is planned to introduce restrictions on the amount of the loan. A monthly payment cannot exceed half of the total family income.

The presence of other loans.

Banks will need confirmation, but the new leverage will not become excessive, that is, the borrower must confirm a high monthly income.

There are other criteria for evaluating a potential borrower. They differ from bank to bank. The higher the loan amount, the more thoroughly the borrower is checked. The following points reduce the likelihood of obtaining a loan: work as an individual entrepreneur or with an individual entrepreneur. Since income may be unpredictable, the risk of loan delinquency is high enough.

In the application for a loan, the borrower indicated inaccurate data.

The Bank has the right to suspect fraud, dishonesty of the borrower.

Lack of a fixed work telephone number.

To check the place of work, you must call the employer. A mobile number cannot be attributed to a specific organization, unlike a fixed one.

The presence of a criminal record.

Persons with an outstanding criminal record are treated with caution, because according to statistics, very many return to places of imprisonment.

Alcohol or drug addiction.

Dependence is bad for solvency.

The presence of debt for alimony, traffic police fines.

This can be seen in the credit history. As well as debts on housing and communal services.

Lack of property.

A person who does not own anything guards the banks, because in the case of litigation there is nothing to take from him.

Many dependents on maintenance.

If the borrower has an unemployed wife and three young children, the probability of obtaining a loan is not high. The reason is still the same low family income. If the credit history is in order, there is official work, but there are concerns that the loan may be refused, it is worth applying for a loan to several banks. They will have different criteria. However, like the terms of the contract.

Christophe Schroeder
Christophe Schroeder
Senior Vice President
+44 (0)20 7397 3628
Email Christophe