There are situations when individuals and legal entities need to use the funds of third-party financial organizations, take a loan or a loan. In some cases, the use of credit is even more profitable than spending your own funds "pulled" out of circulation. This situation is especially relevant for individual entrepreneurs.
In some cases, a person simply cannot accumulate the necessary amount and it is much easier for him in the future to pay it in installments, taking into account interest for use. But expectations are not always met and the bank approves the loan. Sometimes such a decision of the financial structure is an unpleasant surprise. In this article, we will consider why people do not approve a loan, possible reasons for refusal, and how to find out about them.
What data is needed for a loan application
In order to get a loan, first of all, you need to apply to the bank. To date, there are a lot of commercial financial organizations. All of them compete with each other, since the issuance of loans for many of them is the basic way to make a profit.
Therefore, there are favorable seasonal offers, promotions, reduced rates, the provision of funds for a minimum package of documents and other pleasant bonuses. But no credit institution will give the borrower its funds if it has doubts about its solvency, responsibility and financial stability.
In order to clarify all these data, banks require the borrower to provide a certain set of information and how to verify it. So, usually along with the loan application, the borrower provides the following information about himself, his workplace and guarantors:
- surname, name, patronymic of the borrower, date of birth, marital status;
- passport data (series, number, by whom and when issued);
- the presence of dependents (are there children and their age);
- the name of the organization in which it operates, its TIN, contact details and name of the head;
- duration of work at the last workplace;
- position, salary and additional income;
- the presence of real estate and car ownership;
- spouse's income;
- contact details of the borrower, his spouse, relatives or other guarantors;
- the presence of other unpaid loans at the time of application;
- amount of expenses per month.
Documents Required
All of the above information can be clarified over the phone when filing an application remotely. In order to get a loan, information must be confirmed, that is, provide documents and certificates of other persons. Inconsistency of the information provided and its source is the first reason why they do not approve the loan. In order to confirm the specified data, the bank needs the following:
- original passport for identification, marital status and children;
- SNILS in order to clarify pension contributions and establish the fact of a workplace;
- certificate of ownership of real estate, if the loan amount is large and it is necessary to confirm the availability of property;
- vehicle passport in order to clarify information on the availability of a car in the property;
- driver’s license, if the bank needs an additional identification document;
- TIN, if the loan is issued by an individual entrepreneur;
- phone numbers of people who can vouch for the borrower.
What increases the chances of getting a loan
If you want to find out why you do not approve a loan, check out the following factors that increase the chance of getting it. To clarify information about replace banks use different ways and sources of information. The first of these is credit history. This is the most important indicator reflecting the responsibility, solvency and positivity of a person as a borrower.
It reflects information on existing and closed loans, arrears, early repayments and defaults. The more complete the credit history, the more it reflects loans with the due dates of payments, the greater the likelihood of approval. Equally important are reviews of the borrower of the employer and guarantors. Pre-warn people whose contact numbers you leave in the bank. It is very important that they answer the call and properly describe you.
Why do not approve a loan
Considering a potential borrower, banks check a fairly large amount of information from various sources. There can be several reasons for refusal. Some of them can cause sincere bewilderment, as it would seem that they are absolutely not important in the issue of granting money on credit. So why have banks not approved a loan? Consider a list of possible reasons, and below we will reveal them more fully:
- borrower solvency;
- credit history;
- false information;
- violation of law;
- incorrectly formed goal;
- economic crisis;
- non-compliance with formal requirements;
- non-compliance with informal requirements;
- borrower profession;
- unreliable employer of the borrower.
The exact reason why the bank does not approve the loan is not always possible to find out. The fact is that by signing the application, you automatically agree with the clause that the bank has the right to refuse to grant a loan without explanation. Financial institutions have official criteria for selecting customers and unspoken. And they are not required to disclose them. However, after reading the next few paragraphs of the article, we can conclude which category of “refuseniks” a particular borrower fell into.
Credit history and solvency
Credit history is the main document from which consideration of a potential client of a bank begins. The more information in it, the better. Banks are also reluctant to give loans to customers with zero history, as well as with negative characteristics. This document reflects all loans and credits, all payment information, as well as reviews of banks on the borrower. It is this document that people are so afraid of spoiling by delays and missed payments.
All banks and microfinance companies get access to it if the client has filled out a loan application. You can see information about yourself by contacting the credit bureau. A person will be printed out all the information about him as a payer, for a fee. You can get a free credit history once a year. By the way, early repayment is also not always a positive point in the biography. If you close the loan ahead of time, the bank loses part of its profit - interest on the loan.
Why do not approve a loan with a good credit history? Everything is simple - the person seemed insolvent to the organization. Based on the level of salary, the average amount of utility bills, the number of dependents, relying on possible unforeseen circumstances, the bank may decide that the borrower will not get a loan.
False allegations, law violations and dubious goals
Even a small fraud in a loan application is a serious reason for refusal. The bank checks all incoming information with all available methods: calls, requests, reconciliation with documents. Therefore, if you indicate information, make sure that it can be confirmed: registration, salary, marital status and more.
If your white salary is minimal, and the main part you get "in an envelope", ask the director to write a certificate in free form, or sign the submitted bank form with real numbers. Relate relatives of possible calls. Do not hide the information indicated in official documents, but speak directly.
The reason why they do not approve a loan at Sberbank and other financial organizations may be the criminal record of the borrower. Even if the criminal record has long been extinguished, and the offense does not belong to the category of economic, the bank in most cases will announce the refusal.
The bank will not give credit for purposes that are in doubt. For example, if you take money to start a business, but have provided insufficient analytical data on the payback and liquidity of the planned business. Money is not given out for such purposes as gifts.
Unstable profession or employer
A lot of attention is paid to the work of the client from banks. The larger the requested amount, the more seriously they check the stability of the organization in the market, the duration of its existence, maybe even reporting information. Not much favor banks of individual entrepreneurs. If you work for an individual entrepreneur or are one yourself, most likely you will be denied a loan.
Another point why Post Bank does not approve a loan (or any other bank) is a profession. There are frequent cases when money is denied to people employed in potentially dangerous sectors, drivers, low-wage social workers, and seasonal workers.
Debts in other areas
Refusal of a loan is often associated with the presence of other obligations. For example, a client is in arrears in paying utility bills or to the state for taxes, fees, fines and penalties. The bank can get access to all these data if it seriously checks the client. Debt proceedings with individuals or legal entities play a significant role. Even if the court was won, the bank may be safe and refuse to grant a loan.
Formal and informal non-compliance with bank requirements
Banks have so-called formal and informal requirements. Formal requirements for the borrower are difficult to circumvent. This may be age, work experience, place of residence, citizenship.
Informal requirements can be completely different for different banks. Some of them may even be discriminatory. For example, a pregnant woman can rarely get approval.
How to find out why you do not approve a loan
Financial organizations issue as a loan funds of depositors and their own working capital received in other financial transactions. They have the right to decide independently about the possibility of issuing money. In the legislation there is not a word about the obligation to voice the reasons for the decision. In some cases, it’s easier to contact another bank. All organizations have different requirements. Smaller organizations are more likely to approve applications than huge holdings that are not deprived of a constant flow of customers.
