Why banks refuse loans: reasons

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Currently, the question of why banks are refusing credit is a topical issue for many. It would seem that it is difficult to get borrowed money from the above institutions, which actively advertise lending programs and assure citizens that they can easily lend funds, and the registration procedure will take only 20 minutes? However, not everything is as simple as it might seem at first glance. In practice, a situation often occurs when an employee of a financial institution says to a potential borrower: “I'm sorry, but we cannot lend you money.” Here the question of why banks refuse credit suggests itself.

How to respond to a loan refusal

If you heard the above phrase addressed to you, in no case be upset or panic.

The situation when a person is denied a loan, the reasons for this are not announced to him,- quite common. Please note that a bank employee is not at all obliged to explain to you on what grounds a decision was made to refuse a loan. To minimize such risks in the future, ask him to say why you did not fit the role of a borrower. It is likely that an employee of the financial structure will contact you and explain the complexity of the situation.

At the same time, it should be noted that there are many reasons why banks refuse loans. Consider the most common of them.

Reason for rejection

We emphasize once again that it is quite difficult to foresee in advance on what basis you may not be given money in debt. It is good if a person knows at least the basics of banking. Then he can at least partially predict the situation and develop appropriate tactics of behavior. But it is often difficult for a simple layman to understand why banks refuse a loan, and he most likely cannot do without the help of specialists. In any case, the information below will be of interest to him.

Perhaps someone thinks that there are banks that do not refuse credit? Alas, there are none, but there are financial structures that are more loyal than others to borrowers.

Insufficient income

Any credit institution is primarily interested in how a person intends to repay the principal debt and pay interest on it. To determine the approximate amount of borrowed funds that the client can count on,he must divide his monthly income by two. It is this amount of the loan that will be considered by the bank. If in your case it is equal to 15,000 rubles, then you are unlikely to receive an amount of 30,000 rubles. It is for this reason that Sberbank refused loans to many of its clients. And this institution is no exception.

Remember the minimum requirements

Each financial and credit structure has its own set of requirements for potential borrowers. At the same time, there are several general conditions that must be observed.

Formal employment

It is very important for a banking institution that a person who receives money in debt has a stable source of income, that is, he works under an employment contract.

Moreover, the length of service at the last place of work should not be less than 3-4 months. Of course, there are credit organizations that do not need any income certificates, but it is better to protect yourself in this matter in advance.

Age

Many financial institutions, when considering the issuance of borrowed funds, take into account the age criterion. For example, the "Bank of Moscow" refused a loan to those who are under 21 years old. And it is important to remember about the age limits. As a rule, borrowers older than 70 cannot qualify for a loan.

Permanent Registration

Most financial and credit institutions issue loans only to those customers who have a permanent registration. This should also be remembered by those whointends to borrow money. For example, Leto Bank refuses loans to borrowers with a temporary residence permit.

Criminal record

If a person had problems with the law in the past and suffered a well-deserved punishment for this, then his chances of getting a loan from a financial institution are very illusory.

However, if the wrongful acts were not serious, some banks may approve a loan, but in any case, the conviction must be extinguished.

The potential of credit programs has been exhausted

Situations often arise when a bank refuses a loan to the most trustworthy borrower. Why is this happening? The fact is that there come times when the financial structure has exhausted the limit that was assigned to it for lending. In most cases, this problem concerns small banking institutions, whose management simply does not want to admit that their financial resources leave much to be desired.

Professions and nationalities

Many credit institutions are afraid to sign an agreement with clients of certain professions. As a rule, this list includes firefighters, police officers, employees of the Ministry of Emergency Situations. Representatives of these professions are at risk of losing their he alth or life every day. Naturally, in this case, the guarantees of timely repayment of the loan are minimal.

Also, banks do not want to issue a cash loan to people from Central Asia. Tajiks and Uzbeks often work odd jobs and do not have a permanent residence permit.

Bad credit history

If a person has already taken out loans in the past and repaid them late, this is also a weighty argument for the bank not to lend money. Moreover, he is not at all interested in whether, for good reasons or not, a person has had delays in payments.

At the same time, some financial institutions are ready to "close their eyes" to the above problem and issue loans to the client. However, their list is limited. In any case, the issue of delay is resolved depending on the time frame, so the chances of obtaining a loan are greater where there are fewer late payments.

Remarkable is the fact that the client may be completely unaware of their own credit history, especially if it is unfavorable. The situation looks ridiculous when a person decides to take a loan for the first time and at the same time he finds out that he previously had overdue payments. Of course, swindlers who fraudulently took possession of the passport of such a borrower "had a hand" here.

However, the human factor in the above situation cannot be ruled out either. None of the bank employees is immune from accidentally confusing the information of one person with another and adding them to someone else's credit history. Thus, we can draw a disappointing conclusion that the absence of credit obligations in the past is by no means a guarantee of an impeccable credit history.

Again about income

It should be noted that indicating a high income may also be a reason forrefusal to issue loans. How can this be explained? The fact is that the bank may question the fact that the borrower received a “high” salary, if, for example, he indicated in the “Profession” column - a programmer. If the level of wages still corresponds to the declared one, then the financial and credit organization may have suspicions that the employer company is stable, since it allows paying such money to its employees.

Also causes distrust and the situation when, with relatively high wages, the borrower wants to borrow a small amount. Such a client, as a rule, is not of interest to the bank, since the loan can be repaid in just a couple of months, respectively, you won’t get much profit from it.

Potential borrowers may be advised to indicate in the application for a loan the maximum repayment period for monetary obligations, since the income of banks depends on interest.

Contact information

Some banking institutions, when applying for a cash loan, put forward the condition that the borrower has a city (landline) phone. Thus, Alfa-Bank refused a loan to its customers on the above grounds. However, even when providing a “working” number, there is a high probability that you will leave the credit institution with nothing. Please fill out all applications and questionnaires legibly. Photocopies of documents should be of the highest quality, and the indicated phone numbers should always be available.

Please note thatthe above list of reasons for refusing to issue a loan is far from complete, therefore, for a deeper study of the issue, you cannot do without the help of a professional.