Why Did I Receive a Loan Request Refusal?
Not all the clients of financial institutions pass the test of a “loan-granting” discipline. The crisis has created problems for many banks and ruined the reputation of many borrowers. There are many reasons why people get loan refusals; however, the main reasons are the following ones:
- Bad credit history – all overdue payday loans and unpaid credits are recorded and transferred to the general database. The information is issued to financial institutions upon request.
- Insufficient or unconfirmed income – the credit is issued based on the information on financial solvency declared by the client. In case the bank doubts the information, a negative response may follow the sent application.
- Presence of unfulfilled obligations – bank secrecy does not provide for the exchange of info of this kind. That’s why microfinance companies are not aware of debts to other companies, but they do not refinance borrowers with open or overdue contracts.
Among other reasons for credit refusal are the following ones:
- You are not the US citizen;
- You are under 18 or over 75;
- You did not repay a previous loan.
What to Do In Case You Receive a Refusal
If you receive a negative response from the bank, do not get sad. It is necessary to act; however, you should prepare when sending new applications:
- Monitor companies that handle clients with a bad credit history; there are many of them.
- Check the data in the registration form and details of your documents for typos or any other errors. You can sometimes make a mistake, which will make a microfinance organization perceived the data as false.
- Make a credit request for a minimum amount. The chances of getting a small-size loan are much higher as the risks of a financial institution are reduced to a minimum.
We also advise you to double-check your credit history and ensure that you do not have any well-forgotten debts.
If you understand that you will not be able to pay the issued payday loan on time, we advise you to issue a credit extension before the expiration of the contract. Using this service, you can extend the loan for the time you need on the most favorable terms and avoid problems with your credit history.
Be aware that credit issuing institutions do not disclose the reason for the loan request refusal. In this article, we have mentioned the main reasons that may lead to a loan not being granted to you.