You counted on this loan. You have meticulously filled out the loan application and waited eagerly for the bank’s response, until suddenly it came: a refusal to give a loan without giving a reason. You wonder – why did the bank refuse me a loan? Why was this the rejection of my mortgage? Did you think that the problem with getting a loan will not affect you? Negative credit decision and what’s next? We will try to introduce you to several reasons why a bank may decide not to grant a loan.
For what reasons does the bank refuse a loan?
The list of potential premises can be really very big – the banks determine the conditions for granting the loan. When filling out a bank loan application, most of us hope that the bank will comply with our request, but it happens that we are refused a mortgage or other type of loan. Why? One of the reasons may be the nature of employment. This is especially important in the case of mortgage loans, which are often granted for a very long period and high amounts.
Negative credit decision and inappropriate age
Banks may set the maximum age of the borrower and if the client exceeds a certain age barrier, there is a risk that the institution will not decide to comply with its loan application. Of course, it is also possible that from the bank’s perspective, the client will be too young to take out a loan. The specific offer and type of loan is very important in this case. Refusal to grant credit: insufficient creditworthiness.
It is also possible that the bank refused you a loan because of your inadequate creditworthiness. The bank must be sure that you will be able to smoothly regulate the commitment made, which is why a careful analysis of the customer’s creditworthiness is a common practice. In this case, a number of factors are taken into account: income, number of dependents, installments of other loans, etc.
Credit refusal: Bad credit history
Problems with loans can also be caused by a not very favorable credit history, which illustrates how we treated our previous obligations. The Credit Information Bureau collects and “stores” information on this subject, which is why BIK’s refusal of credit is a possible scenario if we know that our credit history may leave much to be desired.
To sum up: loan refusal – why? The reasons can be many, those listed in the article are just some of the possible reasons. The obstacle may be, inter alia, the age of the potential borrower, his creditworthiness, including the source of his income or unflattering credit history. It is worth being aware of the possible reasons why the bank may reject our loan application in order to be able to realistically assess your own chances as a potential borrower.