Why do banks refuse loans? What income of the borrower is not taken into account by the bank? How to respond to a loan rejection.
Having an ideal credit history and a well-paid job does not guarantee that the bank will lend to you if necessary. Sometimes banking organizations refuse even the most trustworthy clients at first glance. Then quite logical questions arise, why do banks refuse loans and are there ways to solve this problem?
Why does the bank refuse a loan without explanation?
Almost all Russian banks use special checks of borrowers, on the basis of which they make a decision to issue a loan. In some credit institutions, the answer is given not by a computer, but by a collegial body. In any case, getting money from a bank today has become much more difficult, and this applies not only to consumer products, but also to mortgages and car loans.
Bankers have every right to refuse a loan without giving a reason, in accordance with Art. 821 of the Civil Code of the Russian Federation. The rules of their work make refusal without explanation a completely legitimate action. The loan agreement is not public information.
There is an opinion that banks are afraid to “show their cards” so as not to become a victim of fraudsters, but the current attackers still manage to get loans and not fulfill their obligations.
At the same time, there are “loopholes” in the legislation of the Russian Federation that protect ordinary citizens who are trying to figure out how to find out why the bank refused a loan. According to Art. 10 of the Law of the Russian Federation "On the Protection of Consumer Rights" people may require information about the refusal. Those. if there was a refusal, it is necessary to draw up an appropriate document - a loan agreement. But this is in case of a decision to go to court with a complaint against the bank and if you are sure of your legal rights to receive a loan.
And how to find out why banks refuse a loan peacefully, without coercion and disputes? It is difficult to give a definite answer. You should, first of all, study the list of possible causes of bank failures, and then think about “improving” your candidacy, contacting other creditors or starting a “war” with the bank.
For what reasons can a loan be denied?
Consider a list of typical reasons for rejecting a loan application in a banking organization:
- Borrower age. Bankers officially set the age limit for lending from 18 years old (sometimes from 21-25 years old) to 65/70 years old, but they are reluctant to contact young or elderly borrowers, considering this category of the population to be at risk (military age for young people, illness or death for pensioners). Only age, of course, cannot cause a lender to refuse, but in the presence of other negative factors, it will act as an addition to a negative verdict.
- Low income. The "profitable" parameter is one of the main ones in assessing the borrower. So, not understanding why banks refuse loans, it makes sense to find out the minimum monthly salary to receive a particular amount of money. Many banks openly declare the required minimum wage, and some for some reason are silent about it. Lenders have the right to assess the solvency of a person in their own way. It is believed that the payment on the loan, which will be made by the client to the bank on a monthly basis, should not exceed an average of 30% of the amount of its total income. In mortgage lending, in contrast to the consumer segment, the total income of the entire family is taken into account.
- Bad credit history or lack thereof. This is the most common reason for loan rejection. Today, banks are especially closely considering the credit history of a potential client, given the number of days of possible delay (up to or over 30, 60, 90 days). This is due to the tightening of the requirements of the Central Bank, the crisis in the country. The CI also reflects the involvement of a citizen applying for money in litigation in various matters (criminal liability, non-payment of alimony, claims against financial organizations, etc.).
- Providing false, erroneous data in the borrower's questionnaire. When filling out an application for a loan, you should be extremely careful. The use of other people's data, deception also lead to refusal. Scoring programs of banks are able to quickly identify fraudsters.
- Having the status of an informally employed person. Even with a stable income “in an envelope”, it will be difficult to convince the bank of its solvency. Basically, bankers require the provision of a certificate of income (2-NDFL) or a certificate in the form of a bank. Although there are programs where borrowers are not required to bring additional certificates, however, the amounts of such loans are small, interest rates are too high.
- Insufficient work experience. Depending on the lending program or the banking company itself, a requirement for a minimum length of service may be established, for example, from 6 months in a permanent place and from 12 months of total work experience. Frequent job changes can also be a reason for rejection.
- The presence of a position that is at risk, for example, an employee of the Ministry of Emergency Situations, the Ministry of Internal Affairs, the Ministry of Defense, etc. There are still professions that are unclaimed in the labor market and if the client suddenly loses his job, he will not be able to quickly find a new job. The bank can take this into account.
- Lack of a high school diploma. The presence of a "tower" is not a mandatory requirement in banks, many creditors do not even pay attention to this item, but for some banks it is an indicator of a person's material and social level.
- Large family, unemployed husband/wife.
- A close relative of the borrower (mother, father, brother) has a bad credit history or is in prison.
- Lack of proper residency. Typically, creditors indicate in their requirements the place of residence of a potential borrower, for example, in the region where the bank is present.
- Suspicious amount of the requested loan. For example, a bank employee may have a question why a person with a salary of 50,000 rubles asks for a loan of only 5,000 rubles. Those. even a request for a very small loan may not be considered in favor of the borrower.
- Unrepresentable appearance. The state of alcohol or drug intoxication, the presence of multiple tattoos, untidiness, obscene language, aggression, mental disorders, etc. are obvious reasons why they refuse a loan with a good credit history, the right set of documents, and even with high wages. At the slightest doubt, the loan officer has the right to leave a negative comment in the borrower's application, which will entail a "No" in the loan.
- Credit load. Lenders consider the presence of open loans, for example, several credit cards issued in different banks.
A negative decision of a banking institution may be affected by one or more of the above reasons in combination. It is extremely rare, but specialists make mistakes, which leads people to bewilderment and even panic.
How to find out why a loan was denied?
Having considered the presented list of possible reasons for the refusal of creditors, you are still confused, not understanding why you are denied a loan in all banks? Try the following ways to find out the reasons:
- Independent search for "truth". You should contact the BCI to obtain your credit history. In it, you can study in detail your credit reputation. Perhaps you owe not only banks or MFIs, but also the state, local authorities, without paying taxes, fees or utility bills. Similar actions are noted in the CI. And sometimes the client discovers the real mistakes of bankers, the consequences of technical failures. In this case, you should write an application to the Credit Bureau in a special form, attaching the necessary documents to prove your innocence. By the way, you can get your credit history only once a year for free online. More requests will need to be paid.
- Use of brokerage services. Many specialized firms operate on the Russian financial market, helping to check a citizen of the Russian Federation for a fee in the same way as banking organizations do. They can get data from the BKI, "drive" the candidate through the necessary databases and identify the reasons for the refusal of creditors. Remember, when contacting such specialists, you need to check the registration of the selected office, its license in order to avoid "cooperation" with scammers. You should also be alerted by the broker's offer to make an advance payment.
For example, the country's largest lender, Sberbank, allows all citizens to leave claims on the official website in case of a loan refusal. The organization undertakes to provide a written response within 30 days. There is also no need to be afraid to ask questions to a banking specialist. Not necessarily, but you may be able to explain the obvious reason for the negative decision.
Is it possible to refuse a payroll client and why?
A payroll client of a bank is a person who receives income on an account opened with this bank. Quite often, lenders issue loans to "native" clients on preferential terms, reducing the interest rate, requiring a minimum package of documents. But this does not mean that the lender will lend money to each “salary” who applied. This person is not immune from the very circumstances that may cause a refusal, for example:
- Non-compliance with the requirements of the bank for the desired loan program.
- Low income.
- Little work experience.
- The presence of loans in other organizations, unpaid traffic police fines, etc.
The only thing that distinguishes a payroll client from an ordinary visitor is that the bank has information about the size of his income. Those. if you want to get a loan at the bank through which the salary is received, most likely, you simply will not need to submit a 2-NDFL certificate.
Comparative analysis of failures on the example of large Russian banks
Bank's name | Common reasons for rejection | Features of communication with customers in case of refusal |
Sberbank | , the amount of income does not correspond to the requested amount, poor CI, the borrower lives in places or near military conflicts, a risky profession, age | The reasons are most often not reported here in order to prevent fraudulent activities. |
"VTB 24" | Incomplete package of documents, unstable / low income, provision of false information, poor CI, other loans, etc. | The reasons for the refusal are not disclosed, but by calling the hotline number, you can get a review of the candidacy |
"Alfa Bank" | Relatively demanding lender. It takes into account almost all the factors described in the article as possible reasons for the refusal. They are also wary of people working for individual entrepreneurs. | The reasons for the refusal of the loan product were not disclosed. |
How to get a loan from a bank, so as not to be refused?
No one will give you a 100% guarantee that when you contact the bank, your loan request will be approved for you. But if you set out to get a loan without problems and refusals, it is better to prepare. Here are some useful recommendations to increase the chances of issuing money in debt in a banking organization:
- Find out in advance the state of your credit history by sending a request to specialized services (for example, Equifax), through the credit departments of some banks (Bank of Moscow, Sberbank, Russian Standard), through the NBKI, CCCH.
- Provide the bank with only truthful information. Do not try to go for a trick, overestimating your income, forging documents, and other tricks. Fill out the questionnaire as correctly as possible, excluding the assumption of errors.
- If you offer a bank a pledge and a guarantee (the guarantor must be a person with an ideal credit history), this will play an argument in your favor.
- In the absence of a credit history, which also sometimes becomes the reason for refusal, you can arrange any product in installments (phone, laptop, etc.). Conscientious fulfillment of credit obligations will allow the lender to send positive information about the borrower to the BKI.
Alternative options (if all banks refuse)
What to do if all banks refuse a loan? Without resorting to the services of banks, which unanimously refuse financial assistance, you can also get a loan. There are many other financial institutions officially operating in the Russian market, fulfilling the necessary requirements of the Central Bank. For example:
- MFI. Here, small loans (up to 50,000 rubles) are issued for a short period (up to 30 days) using only one passport, but at an inflated interest rate (0.5-3% per day). It is permissible to contact a microfinance company online and in a few minutes receive money on credit using one of the transfer methods (to a card, bank account, Internet wallet, etc.). MFIs provide financial support to people over 18 years of age, including students, pensioners, the unemployed, people with impaired CI.
- Auto pawnshop. A relatively new phenomenon in the pawnshop business. If you have your own car, then you can get a fairly large loan against it (depending on the model of the car). Various brands of vehicles (cars, trucks, motorcycles, special equipment) are accepted as collateral. You can get a loan here within 1 day. Of the documents required: passport, vehicle registration certificate, car registration certificate.
- Credit exchanges. Offers are in high demand in world practice. You will need to register on the appropriate online lending site, for example, WebMoney or Yandex.Money, and provide information about the desired loan. In case of non-return of funds, collectors will begin to pursue you, the case may go to court. The agreement concluded with the exchange is legally binding.
- private lender. With an ordinary person who is ready to lend money at interest, you can make a deal and notarize the contract. This option is quite beneficial for both parties. It involves a discussion, especially in agreements on the size of the interest rate, the period of use of funds, the amount of the loan.
- Credit Broker. Turning to the "cool guys" makes it possible not only to identify the reasons for the refusal of bank loans, but to correct mistakes. The intermediary between the client and the bank will analyze all the documents and will be able to choose the most appropriate loan option. The broker's profit is formed as a percentage of the transaction.
A consumer loan allows you to cope with temporary financial difficulties and restore solvency. It is much easier to get it than a car loan or a home loan. However, banks reserve the right to refuse without giving reasons.
The main reasons why a loan is denied
It is impossible to find out the reason, because. each individual is a separate case. We can only highlight a few main factors that could cause the refusal:
- Borrower age. Many banks clearly define age limits. Age serves as a certain indicator of the financial stability of the client, reflects his ability to have the income necessary for the timely fulfillment of loan obligations. In most cases, consumer loans are issued to citizens from 21 to 65 years of age.
- Bad credit history. The client's reputation is an important indicator of its financial reliability. That is why banks pay attention to checking the purity of the credit history, which reflects the level of responsibility in relation to previously taken obligations. If the CI contains information about delays and non-payments, then the chance of a new loan is significantly reduced.
- Lack of credit history. If the client has not yet used bank loans and does not have a credit history, this does not allow the lender to assess the degree of his responsibility and reliability. The refusal, in this case, is justified by the bank's unwillingness to expose itself to additional financial risks.
- Insufficient income. The level of income is an indicator of financial solvency and the ability to make timely payments on the loan. If the client cannot provide sufficient justification for the level of his own solvency to the bank, then he puts himself in a difficult position: the risk of refusal increases or the available credit limit is significantly reduced.
- active loans. Outstanding loan obligations signal the presence of additional encumbrance. The client will need reserve funds to pay off several debts, which significantly increases the risks of default and delay on the loan.
- Work for IP. In conditions of economic instability, working for an individual entrepreneur may be associated with high risks of loss of income, and, consequently, solvency. This situation is highly undesirable for the lender.
- Having a criminal record. A client with a criminal record is a potentially unreliable borrower. Banks prefer to refuse a loan rather than risk money by financing someone whose background is initially corrupted by the fact of committing an offense (crime).
- Fake documents and information. Cheating bank employees is a serious offense that does not require additional leniency. Identification of a forgery does not inspire confidence in the client, and this automatically provokes a denial of a loan.
Denial of credit should not be viewed as a permanent loss of access to financial assistance. The situation can be corrected by:
- Attraction of reliable and solvent guarantors, ready to provide guarantees of debt repayment.
- The introduction of collateral, the cost of which covers the financial risks of the bank.
- Improving credit history by obtaining and repaying fast microloans from MFIs.
- Preparation of a full package of documents that can convince the bank of reliability and a sufficient level of solvency.
- Turning to the help of a loan broker who will select and help you get a loan.
It is important to remember that refusal is not a reason to give up, and with the right approach, you can significantly increase the chances of receiving financial support in the right amount.
You have planned a purchase, collected documents for a loan, and it would seem that only a few steps separate you from the long-awaited car, new household appliances, modern electronics, your own apartment ... But suddenly the employees of the banks in which you left your loan applications report, one after another, that the decision of the bank is negative. Bad feeling, isn't it? Do you want to know what it is about?
There can be many reasons for refusing a loan, and not necessarily because of past delays. It also happens that a person has a good one, but they don’t give a loan. The exact answer is known only to the bank's scoring program and security officers.
How to find out the reason for the refusal of a loan?
- Directly at the bank
- Exclusion method
The surest way is to ask the bank employee about the reason for the refusal. This information is not always in the public domain, and not every manager will want to tell you about it, but it's worth a try. For example, in Sberbank they say why may refuse a loan and why Sberbank refuses on credit to their clients. In other banks, they may simply warn in advance that the bank does not explain the reasons for its decision.
If you were unable to talk to an employee, or he does not have the information you need, try to study the list of refusal reasons we have collected and find out your own by the method of elimination. It is possible that this may be a whole complex of factors, and not one reason.
Why don't banks give loans now?
In 2017, banks are forced to work under the strict control of the Central Bank. Each issued loan is a risk measured by standards: if the total risk is not covered by cash reserves, the bank's license will simply be revoked. That is why approval is received mainly by customers with a perfect credit history.
We should not forget about the consequences of the financial crisis. Banks are gradually reviving their activities, but most still adhere to the crisis strategy.
Reasons: why consumer credit is not approved:
Low solvency:
- Small salary compared to the amount of the monthly contribution (- less than 60/40);
- Strong debt load (large payments in other banks, mortgages,);
- Number of dependents (children under 18, non-working spouse/wife on maternity leave, disabled person in care);
- Unpaid taxes to the budget (the main reason why they do not give an individual entrepreneur a loan);
- The presence of lawsuits for recovery (for example, alimony);
- Poor status of the employer (financial position is determined by TIN).
Personal data:
- Age of risk category: too young/old;
- Frequent job changes in the last 1-3 years;
- Insufficient experience;
- Poor performance of obligations on past loans (bad credit history);
- A sharp difference in personal data from those indicated in recent questionnaires (over 3 points - for example, your civil status, place of work and real estate appeared at the same time);
- Lack of registration in the region where the loan was issued (the risk department simply does not want to go to your meeting in a remote province in case of non-payment);
- Exaggerated amount of income (by request to the Pension Fund of the Russian Federation, banks check the approximate level of wages by the amount of deductions);
- Low social status, profession (lack of education, property, position of the MOP category - junior service personnel);
- Nationality (residents of the Crimea and the Caucasus are classified by banks as a risk category).
Other reasons
- Frequent failures of other banks;
- "Naked" credit history;
- Making a loan in a suspicious environment;
- Untidy appearance (it is clear that you are leaving work, perhaps from a day or after a weekly business trip - but take the trouble to put yourself in order so that you are not mistaken for a person of low social status);
- Fact on one of the past loans;
- Early repayment of past loans (banks do not like clients who cannot earn in full);
- Bank error (typical for online applications, for example, an approved loan at Sberbank through a branch on the same conditions may be rejected when applying for an Internet bank);
- Unsecured loans in MFIs (microfinance organizations also send reports to the BCI);
- Non-profitable loan product (a common case: under a special program 5-8% per annum they do not give a car loan, what should I do? Apply for a standard product, at 20% - and be surprised at the approval).
We have collected quite a few reasons, most of them from real practice, but this is not the whole list. Sometimes, completely unexpected factors can be important for the system, for example, a double middle name.
Now you should understand what to do if they do not give a loan: check your data according to the above list and, if possible, make adjustments. We cannot say which bank approves a loan for everyone, since this simply does not exist, but we can give good advice and teach you what needs to be done to get a loan approved.
How to get approved for a loan?
- Calculate in advance the amount of the loan and the amount of the monthly payment, based on the level of wages. This can be done on your own, using our articles or loan calculators on bank websites. The main rule to follow is “60/40”, the ratio of the balance of the salary to the amount of the monthly contribution.
- Evaluate your portrait of the borrower in terms of the scoring program and see what can be changed. This process is described in detail.
- Provide an extended package of documents. This will affect not only the decision, but also the interest rate.
- Learn to call simple things literate words. For example, not a "cleaning lady", but a "cleaning manager". Not “single, have a girlfriend”, but “I am in a civil marriage”. Not “uncle throws another five a month,” but “I have an additional unofficial income of 5,000 rubles.”
- Do not come to apply for a loan in the company of persons who may raise doubts.
- Evaluate yourself "by clothes" before visiting the bank. If there are tattoos on the body, it is better to cover them with long sleeves. The first item from the job description of a loan officer is a visual assessment of the borrower and his environment.
- To increase the likelihood of approval, contact the bank where you were once a client and showed yourself on the good side.
- To improve your status in the eyes of the bank, open a minimum deposit before applying for a loan.
- Monitor the quality of your credit history and correct shortcomings in a timely manner.
The question "Why are they denied credit in all banks?" - not as simple as it might seem at first glance. The refusal of banking institutions to cooperate with any particular client does not arise from scratch. It can be due to several causes, including veiled, hidden, and hidden ones.
The decision on the application for a loan is made by banks in the following ways:
- with the help of scoring programs that, based on the received data about the client and the conditional algorithm, decide whether to give money or refuse;
- the application is made by the credit committee of the bank on the conclusion of the inspector, which is compiled by him in the form of an analysis of the documentation and information about the possible borrower.
Many banks on their websites indicate what the minimum wage is allowed for obtaining a loan.
An impeccable credit history, a stable income, a decent social position - even this does not guarantee a 100% loan. In the Russian Federation, financial institutions can afford not to explain to borrowers what is the reason for refusing to lend. However, it is possible to find justifications for such actions of the bank. Bank employees often talk about this during their public speeches. So, why are banks in no hurry to lend to trustworthy clients, not to mention comrades who have made a mistake?
Bad credit biography
The first and, perhaps, the key reason for refusing a loan is considered to be a bad credit history. This term covers not only the concept of delinquency in loan repayments, it is also an assessment of the borrower submitting an application that does not meet the individual requirements of a particular bank.
Well, if it turns out that the customer actually violated the terms of the loan agreements in the past, then the refusal suggests itself automatically.
At the same time, it seems strange that banks refuse loans to people with a completely good credit history, however, this happens. The bank can simply play it safe if it has even the slightest suspicion of poor solvency of the client at the moment and in the near future. There is also such a practice as rejecting positive borrowers precisely because of their financial integrity. It is unprofitable for a bank when a person takes a loan and then repays it ahead of schedule, thereby limiting the institution in making a profit on interest. And then, a good credit history - it can be a zero history. It has no informational value, which means it is put on a par with bad stories.
Other grounds for refusal
So, we have already found out that banks can find any reason for refusing to lend. The following is a list of the most common excuses not to lend money:
- A request for an overly large amount has been made. According to established standards of a reasonable debt burden, the monthly loan payment should not exceed 40 percent of the total monthly income of the borrower. The bank draws conclusions based on official data on the customer's earnings. If the financial institution decides that the loan amount may be unbearable for the client, then either the funds will not be disbursed at all, or the amount will be reduced.
- The applicant for the loan does not correspond to the age category for which the loan can be issued. In general, people under 20 and over 60 do not fall under such criteria. But today there are many banks that individually approach the age estimates of the borrower. For example, there are special programs for lending to pensioners (and most men, as you know, retire just after 60 years). Some banks are ready to support young entrepreneurs who are under 20 by the time they apply for a loan. In general, there is a stereotype (and it is not unfounded) that active labor activity in a person under the age of eighteen is not relevant, and therefore there is a risk that the return of loan money by a young borrower may be on the verge of failure. In this regard, the bank does not want to take risks, which is quite logical. In the same way, he does not want unnecessary problems, concluding an agreement with persons of pre-retirement and retirement age. Older people are prone to disease, and this implies a cessation of employment and a decrease in income. The risk of death of the borrower is not excluded. Surprise on the topic "Why are they denied credit in all banks?" dissolves on its own...
- Lack of guarantees for proper support. The key types of collateral in lending to the people are surety and pledge, and in entrepreneurial activity - a bank guarantee. The bank will unequivocally refuse a loan if, in fact, the product is this very security, or if it is requested in the form of insurance.
- income instability. If the client is not able to officially confirm his monthly earnings, or he has a frail work experience, then most likely he will not get a loan. In some cases, creditors do not focus on these factors, one large banks indicate this item without fail.
- The presence of a large debt or non-payment on other loans. A person can accumulate large debts on utility bills, not pay taxes, hide from alimony, avoid paying certain fines, lawsuits, and so on.
If a person's reputation is tarnished, then it is difficult to count on issuing a loan, but again, in this regard, the bank works with each potential client individually.
- Providing false information in the application or fake documents. The deception will surely come to light. And the very fact of forgery is perceived by the bank as fraud, even if all this was not done intentionally. It is easier for the bank to refuse in this case than to expose itself to risks.
- The client's name appears on the black lists of one or more banks. Getting into such registers occurs in different ways. The bank does not like to contact, and even more so, cooperate with people who threaten to “complain to higher authorities” if they suddenly don’t like something, with brawlers and overly principled citizens, malicious non-payers, etc.
- Non-compliance of a particular client with certain conditions or requirements for a loan. Any little thing is enough here to refuse to issue money. Such “little things” include the following nuances: lack of registration at the place of the loan request, inappropriate age, questionable social status, inability to provide the necessary documentation, etc.
Hidden loan denial options
Bank employees sometimes see something in the comrades who contacted them, which is not customary to talk about directly, but this must be taken into account in the future. The silent category of factors falls under the terms of risky lending. Many of them are included in the category of so-called subjective suspicions, but banks are hedging themselves and do not take unnecessary risks.
Hidden reasons for refusing a loan include the following:
- Unpresentable appearance of a visitor to a financial institution. Visually, everything is taken into account: stale linen, the drunken state of a person, and inappropriate behavior, and general untidiness, and much more.
- The discrepancy between the requested amount and the financial capabilities of the person. Both a small amount with significant income and a huge loan with modest earnings are equally under suspicion.
- A strange, obscure purpose of obtaining a loan. In theory, the borrower has the right to independently decide how to dispose of the requested money, and, in general, it is a personal matter for everyone what to spend the loan on. But one can also understand the bank, whose employees are obliged to be interested in the target orientation of the funds issued. So, it’s more correct not to cast a shadow on the wattle fence when ordering a loan, but to indicate a goal that will not cause any suspicions among financiers: for example, apartment renovation, intention to start your own commercial enterprise, training, etc.
- Social factors. Banks do not like it if people with a criminal record, the presence of many dependents turn to them. Reluctantly agree to issue a loan to those who do not own movable or immovable property. The chances of obtaining a loan for citizens with serious illnesses or workers in dangerous professions are sharply reduced. This list includes novice individual entrepreneurs and such individuals whose lifestyle clearly indicates that loan default is possible ...
Well, too ideal "applicants" also run the risk of being left with nothing when trying to get a regular or extraordinary loan. You ask, with such and such positive scenarios, why are they denied credit in all banks? That's the way it is with us in Russia. A prosperous person in our country is more likely to arouse a feeling of distrust than to be honored with admiration. The number of “painfully good” clients includes those who repay not just on time or ahead of schedule, but at lightning speed - when bank employees involuntarily have a question: why was the loan taken at all, and was it needed? More recently, there was a moratorium on early repayment of the loan, now it has been canceled, moreover, by law.
You can repay the loan at any time, even the next day after the conclusion of the contract. It would seem, who cares how quickly I repaid the loan. But no - with a high rate of repayment of credit debt, banks lose guaranteed profits - what is not a reason to refuse lending!
The original reasons for refusing credit
- Lack of a landline phone. With the ubiquity of cellular communications and the presence of almost all of us with a mobile phone, many banks still require when applying for a loan to write down landline phone numbers: if you don’t have a home phone, then a work phone will do. Unlike a mobile phone, a landline phone is located at a fixed address. It can not be issued to a non-existent person. This serves as an additional guarantee that you can contact the borrower if necessary, and also find him at the address, even if he decides to turn off the phone. It is highly likely that in the future banks will not rely on this factor, since a large percentage of the population refuses city phones (at least home phones).
- Hiding the purpose of the loan. Before getting a loan, the client fills out a questionnaire, where he indicates why he needed the money. Most often they are asked for consumer needs. But if the refinancing of an existing loan is indicated, the creation of a business from scratch, they will politely refuse you. Such loans are classified as super risky operations and lead to the formation of maximum and unprofitable reserves for the bank.
Tightening banking regulations
The difficult situation in the financial market, economic sanctions, and the trend towards a decrease in the solvency of the population have led to the fact that it has become more difficult to get a loan than before.
Russian banks are forced to change their lending policy and tighten requirements for borrowers. Liquidity has decreased in the lending sector, and banks are not able to maintain the volume of issued amounts, as they used to be.
To lend, banks are forced to figure out how to contrive to raise money in deposits. The volume of deposits for individuals in Russia also decreased for the above reasons.
That is why the rules for reviewing loan applications have become more stringent. Special scoring programs include factors leading to minimization of the risk of credit default. Most of the domestic banks are now refusing to lend to clients with a high risk of delinquency in the future.
Those banking institutions that specialize in issuing express loans with a sharp limit on the amounts on the upper scale and increased lending rates remain loyal.
Finding out the reason for the refusal
A citizen trying to find out the true reason for a refusal to issue a loan by a bank can use the following methods:
- Personally apply to the credit history bureau (BKI) with a request for your "credit card" (in full compliance with the requirements of the bank).
- Act with the help of an intermediary (credit broker) who has a whole arsenal of opportunities to find out the reasons for making a negative decision on issuing a loan.
Obtaining information about the reasons for the refusal will help the client in the future to avoid wasting precious time and get rid of inconsistencies.
There is no absolute guarantee of loan approval in the bank you have chosen. Features of the credit policy, many subjective and objective factors, the rules for considering individual loan applications directly affect the decision to issue money.
conclusions
So we found out why they refuse a loan in all banks. At the same time, we can say with full confidence that a client with a good credit history, excellent solvency and full compliance with the image of an impeccable borrower who has provided the entire documentation package has a great chance that his application will eventually be approved.
Currently, the question of why banks are refusing loans 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 to lend, suggests itself.
How to respond to a loan rejection
If you heard the above phrase addressed to you, in no case be upset and do not panic.
The situation when a person is denied a loan, while the reasons are not announced to him, is 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.
However, it should be noted that there are many reasons why banks refuse to lend. Let's consider the most common of them.
Reasons for rejection
We emphasize once again that it is quite difficult to foresee 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 a 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. In this case, there are several general conditions that must be observed.
Official employment
It is very important for a banking institution that a person who receives money on credit has a stable source of income, that is, he works under an employment contract.
Moreover, the experience 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 count on getting a loan.
Permanent Registration
Most financial and credit institutions issue loans only to those customers who have permanent registration. This should also be remembered by those who intend to ask for money in debt. 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 illegal actions were not of a serious nature, some banks may give the go-ahead for a loan, but in any case, the conviction must be extinguished.
The potential of credit programs has been exhausted
Often situations 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 organizations 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 health 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 immigrants 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 untimely, then 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.
It is noteworthy that the client may be completely unaware of his 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.
More about income
It should be noted that an indication of a high income may also serve as a reason for refusing to issue borrowed funds. 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 nevertheless 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.
It also causes distrust and the situation when, with a relatively high salary, 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 will not get a big profit from it.
Potential borrowers can 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) telephone. 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 that the above list of reasons for refusing to issue a loan is far from complete, so for a deeper study of the issue, you cannot do without the help of a professional.