We can often be denied a mortgage, especially when working outside the country. In the article below we will discuss what is the reason and what to do in this situation. Do we really have no chance for a loan?
Credit refusal – what to do?
There are various reasons why a bank decides to refuse a loan. Of course, the most common reason is too low a creditworthiness or lack thereof. The bank is increasingly restricting its creditworthiness. Banks are carefully monitoring our revenues and looking at our commitments. There are a few simple ways to increase your credit standing. We discussed them in a separate article.
A very common reason is also a negative history in BIK or a lack of credit history. An equally common reason may be income that is not acceptable in a given bank in a given form, for example income from work from abroad. Loans for people working in Belarus or another country are more and more often granted, but not in all institutions.
It also happens that the customer refuses to accept the loan. This is because the potential Borrower received a better loan offer from another bank during the verification process. So, even in modern times, banks are fighting for customers in the loan segment.
Sometimes it happens that a lack of competence on the part of the bank or failure to appear at the appointment of the bank representative is the reason for refusing a loan. This is the reason definitely on the client’s side. Many borrowers do not accept low customer service and do not tolerate the bank “not fighting” for it. Customers are used to high competition on the banking market.
When discussing this topic, it is worth remembering that each bank has its own banking procedures. Therefore, we should not think that if one bank refuses to grant us a loan, then we are crossed out in other branches. Look around and go to other banks. Perhaps for another bank the reason for refusing a loan from the previous bank will not be so significant and we will receive a commitment.
For example and to clarify the situation. The client can be convinced that he will not receive a company loan because he was refused in one bank because of delays in previous company obligations. However, it turns out that the entrepreneur’s BIK is not verified in all banks.
Reasons for rejecting a loan application
If you do not know the reason for refusing a loan, it is good to ask the bank directly for the exact reason. We will often get such an answer, but unfortunately not always. It happens that the bank gives the customer a negative answer and the whole procedure ends there. Even if you ask a bank employee for clarification. Below are some of the most common reasons why a loan application was simply rejected. Of course, these are not all situations in which we can get a negative answer, but they occur by far the largest number of times. Talking about:
- Too low creditworthiness (or lack of credit) – even if we have an indefinite employment contract, but we earn too little or our obligations are too high – the bank will probably reject our loan application. Reason? The banking institution’s calculations show that we simply can’t pay the next installments, which means we don’t have creditworthiness. However, we don’t have to worry – if we have one or two small loans, we may still have a chance for a loan. So when do the liabilities exceed their maximum value for the bank? This happens when monthly repayment installments take from 50 to 65 percent of our monthly income. What can you do in this situation? There are three good options – we can try to consolidate our commitments, try to restructure loans or… find a co-borrower who will improve our ability with high income and no signed commitments.
- Lack of credibility – the loan is also granted on the basis of trust. If the bank finds us responsible, it will be more willing to pay us money. It is therefore important what type of employment and contract we have, whether we have no arrears in BIK, what our credit history looks like, etc. The age of the borrower is also important. What if something doesn’t match? First of all, determine what. As we mentioned before, a financial expert can help us. At the moment when we learn what exactly we should improve to get credibility in the eyes of the bank, let’s just proceed to action. If, for example, it turns out that we have some arrears in BIK, we should pay them immediately. It will be updated within a maximum of 30 days and we can then resubmit the loan application.
- Too many credit inquiries at BIK – it is worth doing it wisely when looking for a loan. It is therefore not worth making inquiries about offers in too many branches at once. Every time bank employees want to propose an appropriate offer, they send an inquiry to BIK. If there are too many of them – banks will begin to refuse in advance. Why is this happening? Well, it is a security against granting a loan to a person who got it a few hours earlier in another bank and did not admit it by submitting the application. In other words – protection against combining by customers. However, if you have already done so and are temporarily blocked from taking a loan, find out what you can do about it. In this situation, however, the answer is not very pleasant, because there is no other way to wait a dozen or so days (and so good that not months) until BIK updates and the bank will be able to verify exactly how many liabilities we have incurred.
- Payday loans – yes, they also affect our credit standing. And although we can get them without special conditions, if we are serious about a bank loan, it is not worth doing. At the moment when we want to submit an application for money to a banking institution, it is worth having such liabilities payable.
- No consent of the spouse – if we are married, our wife / husband must agree on larger cash loans and mortgage obligations. And here you can do nothing but try to convince (not force!) The other half to let her agree. Without it, we have no chance of credit if it is too high.
A good solution is to go to a credit expert. He can help in getting an answer. Certainly will help in checking the problem, if we can not determine it ourselves.
Credit is a serious commitment, but it is often the only solution in the current situation. That is why it is worth knowing what to do if it happens that the bank will not agree to it. The best way would be to go to a credit counselor. Thanks to this, we can be sure that we will get to know the best offers and we will be guided in such a way as to obtain a loan, if possible. No financial calculator can replace a credit expert.