You need money for a new car, a company you want to start or just to repair your leaky roof. But the bank refuses your loan application. You do not agree with your bank decision and are therefore ready to fight. However, before you do, it is important to know why your request was refused. Thus, you can prevent a new disappointment.
Banks are generally very reluctant when it comes to granting a loan. It is not only a risk to you, but also to the bank. Banks want to reduce the debts of individuals and thus prevent non-repayment of debts.
Read our article: 6 ways to keep your debt under control
That’s logical, because why would the bank lend money to someone who can not handle it or can not pay back the loan amount?
At the end of 2015, the Central for Credit to Private Individuals (CKP) had 6.2 million registered borrowers and 11.2 million credits. Your loan application may be refused for a variety of reasons. These we put below for you in a row:
You are on the blacklist
Unfortunately, you are registered on the blacklist of the Central for Credits to Individuals (CKP). Before creditors can provide a new loan, they must first contact the CKP. If you find that you are on the blacklist, the lender may not even give you credit.
Once you have signed a credit agreement (for example, for a loan or mortgage), the lender is legally required to disclose your identity and the features of the agreement.
If you have not yet paid or completed your account after three months, the lender will have to report this and you will be in the blacklist.
It may also be that your loan application is denied because you are on the list of unregulated registrations (ENR). On this list are (non-paid) loans not included by the CCP. You will be listed on this page if you have not yet paid your accounts within three months.
Read our article: Why you need to avoid a blacklist on the National Bank
You do not have the correct profile
If you are under 25 and are unemployed, it is almost impossible to apply for a loan. If you can not give any financial guarantees or are in debt then your credit application will definitely be refused. If your bank finds that you do not have much money in your bank account during the year, it will be difficult to apply for a loan.
Read our article: A loan helps you realize all your projects
Banks do not appreciate it when you are in an unstable financial situation. Your age, the number of children, your income and the ability to save money are important criteria for banks to approve a loan application. A debt or debt repayment loan will therefore not be in your favor.
On the other hand, a stable professional situation, a good income and the ability to save will help you to get a loan.
Your budget is insufficient
If you apply for a loan, the bank must first look at your profile and budget. For example, if the amount you apply for a loan is much higher than what you have on your account, it is difficult to obtain the requested amount. The bank will basically look at what you can pay monthly. Of course, it will be checked whether, in addition to repaying the loan, you still have enough money to live.
You can use our comparison tool to see which loan suits you best.
If you have insufficient guarantees to reassure the bank, it is not surprising that your request is refused. You could suggest someone to act as a guarantor or co-borrower, but who does not have enough financial capabilities will re-engage you.
The above points are the main reasons why a credit application can be refused. Below we will tell you more about possible solutions.
What can you do to get a credit?
- If you are blacklisted
In this period, there is little that you can do. The most important thing is that you know how to solve your loans to get rid of the blacklist. Even if you pay your bills, you will remain on the list for one year. Only after that will your name be removed from the list.
After that, you have the opportunity to request a loan again. However, if you can not repay your credits, you will remain in the blacklist for ten years. Requesting a loan during this period will be impossible.
- Go to another bank
Each bank has its own rules and criteria. If your loan application has been rejected at one bank, it could just be that the application is accepted by another bank. So do not hang with one option, but look at other options. Our comparison tool can help you determine which bank you are eligible at first sight.
- Offer security
If you can not win your bank’s trust at first, do not hesitate to ask others to help you. Perhaps your parents, grandparents or friends can convince the bank with their financial stability, for example by acting as guarantor.
Of course, it is important that they have stable income, a job and sufficient ability to repay a loan. And that too they have had no problems with the bank in the past. Therefore, be careful about the choice of those people.
- Ensure a good balance
Make an effort to save money and balance your budget. Good habits teach you how to manage your budget the best. Also, try to save money during this period.
Read our article: 7 tips for a healthy budget
- Be prepared to lower the loan amount
If the amount you’d like to receive appears to be difficult to obtain, lower the amount you want. It may be that the bank finds the requested amount too high. Therefore, try to submit a better thoughtful application. Perhaps you have more chance!