Why Banks Deny Credit: Reasons

At present, the question of why banks are denying credit is topical for many. It would seem that the difficult thing is to get borrowed money from the above institutions, which actively advertise the lending programs and assure the citizens that they will easily finance the loan, and the registration procedure will take only 20 minutes? However, not everything is as simple as it might seem at first glance. In practice, there is often a situation when a financial institution employee tells a potential borrower: "I'm sorry, but we can not give you money in debt". Here the question of why banks are denied credit, suggests itself.

How to respond to a refusal to issue a loan

If you heard the above phrase in your address, do not get upset at all and do not panic.

The situation when a person is denied a loan, the reasons for this are not announced to him, is quite common. Please note that a bank employee does not have to explain to you on what grounds a decision was made to refuse to issue a loan. To minimize such risks in the future, ask him to say why you did not approach the role of borrower. It is likely that the employee of the financial structure will contact you and explain the complexity of the situation.

At the same time, it should be noted that there are many reasons why banks refuse credit. Consider the most common of them.

Reasons for failure

Once again, we emphasize that it is rather difficult to foresee in advance why you can not be given money on a loan. Well, 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 a common man in the street often finds it difficult to understand why banks are refusing a loan, and, without the help of specialists, they are more likely to manage. In any case, the information below will be of interest to him.

Perhaps someone thinks that there are banks that do not deny credit? Alas, there are none, but there are financial structures that are loyal to the rest are borrowers.

Inadequate income

Any credit institution is primarily interested in how a person intends to repay a 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 the amount of 30 000 rubles you are unlikely to receive. It is for this reason that Sberbank denied credit to many of its customers. 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, we can identify several general conditions, the observance of which is mandatory.

Official employment

It is very important for a banking institution that a person who receives money in debt has a stable source of income, that is, he worked under an employment contract.

And 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's better to secure yourself in advance on this issue.

Age

Many financial structures consider the age criterion when considering the issue of loan disbursement. For example, the Bank of Moscow denied loans to those who have not turned 21 years old. And it is important to remember and age limits. As a rule, borrowers over 70 years can not expect to receive a loan.

Permanent registration

Most financial and credit institutions issue loans only to those clients who have a permanent registration. This should also be remembered for those who intend to ask for money in debt. For example, "Summer Bank" denies loans to borrowers with a temporary residence permit.

Previous conviction

If a person in the past had problems with the law 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 unlawful actions were not serious, some banks may grant a loan, but in any case the criminal record must be repaid.

The potential of credit programs is exhausted

Often there are situations when the bank denies credit to the most trustworthy borrower. Why is this happening? The fact is that there are times when the financial structure has exhausted the limit that it was allocated to lending. In most cases, this problem concerns medium-sized 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 a contract with customers of certain professions. As a rule, this list includes firefighters, policemen, employees of the Ministry of Emergency Situations. Representatives of these professions are at risk every day to lose their health or life. Naturally, in this case, guarantees of timely repayment of the loan are minimal.

Also banks do not want to give out a monetary loan to immigrants from Central Asia. Tajiks and Uzbeks are often interrupted by casual earnings and do not have a permanent residence permit.

Bad Credit History

If a person has already issued loans in the past and failed to repay them in time, then this is also a weighty argument for the bank not to lend money. And it does not interest at all, for good reasons or not, a person has had delays with payments.

However, some financial institutions are ready to "close their eyes" to the above problem and give the borrowed funds to the client. However, their list is limited. In any case, the issue of delay is decided depending on the time frame, so the chances of obtaining a loan are greater where there are less untimely payments.

It is noteworthy that a client may not know about his own credit history, especially if it is unfavorable. The situation when a person decided to take out a loan for the first time looks ridiculous and at the same time he finds out that he had past due payments earlier. Of course, the "scammers" who "fraudulently acquired the passport of such a borrower.

However, the human factor in the above situation, too, can not be ruled out. None of the bank's employees is immune from accidentally confusing the information of one person with another and making them into someone else's credit history. Thus, one can draw a disappointing conclusion that the absence of credit obligations in the past is not a guarantee of an impeccable credit history.

Once again about incomes

It should be noted that the indication of high income can also serve as an excuse for refusing to issue borrowed funds. How can this be explained? The thing is that the bank can question the fact that the borrower receives a "high" salary, if, for example, he indicated in the column "Profession" - the programmer. If, however, the level of wages does match the declared level, then the financial and credit organization may have suspicions that the employer company is stable, since it allows paying its employees such money.

Also causes distrust and the situation where, with a relatively high salary, the borrower wants to borrow a small amount. Such a customer, as a rule, does not represent an interest for the bank, since the loan can be paid in just a couple of months, accordingly, you will not get a big profit from it.

Potential borrowers can be advised to indicate in the application for a loan the maximum maturity for monetary obligations, as the income of banks depends on interest.

Contact Information

Some banking institutions when issuing a money loan put forward a condition for the borrower of a city (landline) phone. Thus, Alfa Bank denied loans to its customers on the above grounds. However, when you provide a "working" number is likely that you will leave the credit organization with nothing. All applications and questionnaires, try to fill in legibly. Photocopies of documents must be as high-quality as possible, and the indicated phone numbers are always available.

Please note that the above list of reasons for refusal to issue a loan is far from complete, so for a deeper study of the issue you can not do without the help of a professional.