Personal loan refusal: the 5 most frequent reasons

With a file that is deemed acceptable, it is entirely possible to be refused a personal loan by a banking establishment. And even if each lender follows their own rules for granting credit, it is clear that it is often the same reasons that motivate a negative decision. Here are the 5 most common reasons for refusing a personal loan.

 

Low credit rating or lack of history

credit score

In conventional banking institutions, a low credit score almost always leads to a loan refusal, when the borrower has sufficient income and is low in debt. As the lack of history also translates into a low credit rating, newcomers to the credit market are also generally refused their loan for this reason. In this case, the only solution available to the borrower is to apply for a loan without investigation in order to have a chance of obtaining financing.

 

Too low income

Too low income

Even if you have no debt, it will be difficult to get a loan if you have a low income, for example because you work part time. Indeed, as a general rule, credit institutions and in particular those granting loans without investigation require a minimum income of $ 1,200 monthly.

 

Too much debt

Too much debt

Even if you have a comfortable income, the lender can refuse you a personal loan if he judges that with this new commitment, your debt may be too high. Generally, banking institutions consider that the debt ratio should be between 32 and 40% of total annual income. In case of refusal for this reason, the only solution is to wait to be able to settle certain loans, preferably those with the highest interest rates, in order to reduce its debt ratio and thus be able to reapply for a personal loan. And even if you have a low debt ratio, a lender can also refuse you a personal loan if he finds on the bank statements that you are paying back a micro loan or a payday loan. It is therefore better to pay it off before applying for a personal loan.

 

A history of arrears

personal loan

When a credit institution studies a client’s file, it carefully examines the latest bank account statements. This is how he can check the amount of income received and the credits being reimbursed. But it is also also for him the means of detecting if the borrower has had arrears for the past three months. An incident of this type generally pushes traditional banking institutions to refuse a request for a personal loan. Some lenders who grant loans without investigation can tolerate a default on the period provided that besides that, the borrower’s record is good.

 

A recent change of employer or accommodation

personal loan

If you have been in the business for less than six months, if you have moved within the last three months, or if your checking account has been open for less than 90 days, you risk being refused a personal loan by the employer. banking establishment with which you deposit your request for credit. In order to grant a personal loan, traditional institutions such as private lenders generally require six months’ advance notice from the employer and the residence address, as well as a check account opened for more than three months in an agency of the Quebec.

Lenders do not just stop at the amount of income received to make a personal loan. They can indeed refuse the borrower’s request for other reasons and in particular if his credit rating is low, his debt high, that his history shows recent unpaid, or that his seniority in the business or at home is insufficient.

For whom payday loans without BIK?

A quick loan, also called an online payday loan, is the fastest way to get extra money for any purpose. If the bank has refused to grant you a loan due to an unstable financial situation or a negative credit history, and your family and friends cannot or do not want to support you financially, you can count on a loan without BIK – you will receive money in your bank account in 15 minutes, without unnecessary formalities without leaving home.

Responsible lending is one of the methods to properly demand our finances. This is known to all those who have fallen into a spiral of debt, as well as those who have ever had problems with paying off their loans, credits, installments and other liabilities. First of all, it is worth remembering to thoroughly analyze the offer of the institution in which we are going to take out a loan. For some, a low installment will be important, for others – convenient payment terms, while others are looking for loans for people with financial difficulties. And it is to such clients that financial institutions address their payday loans offer without BIK.

 

How does BIK work? Who verifies the creditworthiness in BIK?

payday loan

BIK, or Credit Information Bureau, is an institution that collects data on all loans, loans and installments we have taken. BIK reports are used by banks and many financial institutions to check credit history and assess our ability to apply for a loan. Negative credit history, late repayments of previous liabilities – all this means that our chances of granting a loan decrease.

 

Payday loans without BIK for everyone?

Payday loans

Some financial institutions meet people with difficult credit history by offering them payday loans without BIK . This option is mainly for people who have current liabilities and lack funds to pay their debts or to meet an urgent need, eg car repairs or buying necessary household items. For such people, a loan without BIK is a chance for money without additional formalities – even if their previous credit history was not very favorable.

 

New online payday loans offers without verification

New online payday loans offers without verification

It is worth adding, however, that providing such payday pay without verification is a risk for a financial institution, so you should be prepared for the need to pay the higher installment. Are you interested in a quick loan without BIK? Do you want to borrow money without verifying your credit history? See new payday loans , compare the conditions and choose the offer that suits you best. Certainly, it is worth supporting yourself with ready-made solutions for analyzing loan offers, eg with a loan calculator or a professional comparison tool, available online for free.

P2P Lending: why request a personal loan

Most of the P2P Lending platforms were born by providing personal loans, or loans with the direct provision of money to the Applicant, without the need for guarantees on his part.

This type of loan is suitable for the P2P mechanism because:

  • it has medium-small cuts, which lend themselves more easily to financing demand through the sum of many small fees paid by a series of Providers
  • the management of the credit criteria adapts to the use of statistical methodologies with respect to other types of loans and, therefore, allows the creation of significant economies of scale.

Today, P2P Lending is an established model that has proven to be able to provide significant amounts and thousands of loans, with the same reliability and security found in a bank – on the other hand, the activities are subject to the supervision of Banca d ‘ Italy – while assuring the Applicant important advantages.

P2P Lending is a simple, fast, transparent and advantageous model for everyone.

The 4 distinctive elements of the personal loan granted by the P2P Lending system are:

  1. Simple process, fast and close to customer needs
  2. 100% online delivery
  3. Tailor-made loan offer: each Applicant reimburses according to his / her creditworthiness / repayment capacity
  4. Transparency

 

1. Simple process, fast and close to the customer’s needs

  • The answer to the loan application and the estimate are in real time.
  • The Applicant’s documentation is made available through a simple “upload”.
  • Each Applicant is contacted for assistance in the various stages of the process.
  • Approval takes place in 24 hours with fundraising, digital signature and immediate disbursement.

 

2. 100% online delivery

online loan

  • Free from schedules, transfers and without the need to go to branches and / or agencies.
  • Advantages of information and transparency.

 

3. Tailor-made loan offer

loan offer

P2P operators evaluate the Applicant’s profile to define their creditworthiness, that is, the Client’s ability to repay the loan requested. The assessment takes into account several factors combined in statistical models. It is important that the P2P operator is able to build a risk-adjusted pricing model of the loans, that is, capable of attributing to the Applicant an offer consistent and proportionate to its creditworthiness and repayment capacity.

 

A reliable and sophisticated loan pricing model

The need to develop a reliable and sophisticated pricing mechanism, achievable with access to the Credit Bureau (CRIF, EXPERIAN, CTC) and with a rigorous and adequate internal scoring model, is dictated by the need to protect the interests of the Providers of the platform . The different rates therefore incorporate the variability of the creditworthiness of the Applicants, which is defined using the information obtained from the credit databases and the operator’s experience.

The pricing model described also allows customers who do not take into consideration the possibility of accessing personal loans to finance their needs to approach the request for financing. The Risk-Adjusted Pricing model and the disintermediation of the banking system ensure that the applicant is treated better than the corresponding treatment on the traditional market.

 

4. Transparency

personal loan

Transparency is a fundamental value of the P2P operators’ business as the business model itself dictates it.

For regulation and transparency, intermediaries are obliged to present the so-called “SECCI” form (abbreviation for Standard European Consumer Credit Information) or “IEBCC” (abbreviation for basic European credit information) during the offer phase. to the consumer) that from 1 June 2011, with the entry into force of Legislative Decree no. 141/2010 in transposition of the EU Consumer Credit Directive, replaced the previous documents. It is a standardized form that contains all the information necessary for the evaluation of the credit offer. In fact, in the SECCI form it is mandatory, among other things, to indicate the global cost of the personal loan (the APR- Annual Effective Global Rate);while it is not mandatory to include any insurance or optional products in the total cost.

For an Applicant the cost of a loan is made up of two components:

  • the interest rate (Nominal Annual Rate – TAN) which represents the remuneration of the money and of the risk assumed by the lenders;
  • the cost of the platform service.

Both production factors in the P2P model are purchased by the Applicant at market values, as they are provided by different subjects and not merged with other services.

To these components there are no additional costs and accessory products that are not mandatory and not required. The offer, in these cases, should not include early redemption costs which may affect the categories of most exposed applicants and should not include ancillary products, such as insurance or credit cards.

In the case of P2P Lending, the Applicants pay a market interest rate which reflects the remuneration requested by the Provider for the risk assumed. From this derives the need and uniqueness of P2P operators to use a “tailor-made” offer model, capable of attributing to the Applicant an offer that is consistent and proportionate to its creditworthiness.

How to compare loans and choose the best? Understand here!

After you think about it and come to the conclusion that you need to apply for a loan, it is common to be in doubt about which modality to choose. After all, there are modalities loans for every taste in the market.

How to compare loan to know which option is best for your pocket? Here’s how to do it:

 

Know which loans you can take

Know which loans you can take

Nowadays, the main loans available on the market are payroll loans and personal loans. Within these two choices, there are several lines of credit that can be adopted.

The payroll loan

The payroll loan

In most cases, people prefer to apply for payroll loans because their annual interest rate is usually lower. However, you need to know why this happens: in fact, in the payroll loan, the installments automatically come out of the pay stub of the person who borrowed money. Thus, there is little chance of not paying off.

For this reason, that customer is considered to be of lower risk. However, for people who already live on tight hearts, running out of a slice of their pay can be compromising. For this reason, a lot of planning is needed when it comes to taking out a payroll loan so that it does not damage your quality of life.

In addition, it is important to know that not everyone can adhere to payroll loans: only people with a fixed job and a formal contract, in addition to withdrawals and public servants, have a preference for Alidademodality. The interested party can also not have the name entered in the SPC or Serasa.

 

The personal loan

The personal loan

Personal loans, on the other hand, are another good possibility of credit in the market. There is a greater diversity of rates, depending on the credit line and the total amount required. For this reason, it is very important that the person who wishes to apply for a personal credit does extensive research on possible options and plans to repay the installments on time.

 

Learn how to compare loan

Learn how to compare loan

When making this comparison, some steps must be taken. After surveying the main proposals for your need, it is up to you to decide which one to choose. Here are the steps to consider:

 

Make a confrontation of the interest charged

Make a confrontation of the interest charged

Interest rates taken by financial institutions vary from agreement to agreement. This factor is something that should be taken seriously into consideration when making your choice.

In addition to the borrowed amount, one must keep in mind that the amount will eventually be returned to the lender in the future. And the responsible for this is the addition of interest. The identification of those proposals that bring the lowest rates is therefore quite significant in your pocket.

 

Pay attention to other fees

In addition to the interest rate, do not forget to know what the other amounts charged by the institution are. For a good overview of the proposal, ask the manager what the cost is. total effective amount (CET) of that loan. This sum will include insurance prices and taxes.

 

Do not forget the form of payment and installments to assume

loan payment

It is crucial to consider the forms of payment to close a loan agreement. This is because, like any other contract, these clauses must be respected; otherwise the person’s name may be negated and he will lose credit on the square.

It is therefore essential to have a real sense of what your financial situation is and how much money you will have each month to settle your debt. Make a proposal to bank managers and close the deal only with the institution in which you are able to settle this debt effectively, without compromising much of your monthly income.

Loans may not be the best solutions for your financial life, but they are necessary ideas in some situations. Therefore, you need to know how to choose it and ensure good planning so as not to curl up later.

Dental credit with payment in installments

Dentures are often very expensive. This applies regardless of whether entire prostheses, larger bridges or just individual crowns are required. Depending on the material from which these parts are made, the cost can be either several hundred or even several thousand USD. For this reason, many patients wonder how they should finance their urgently needed dentures.

They will not always have the money on the high edge or have thought about taking out private dental supplement insurance in good time. If they do not want to do without dental treatment altogether, they often have no other option than to look for a suitable dental loan with payment in installments. Statutory health insurance only partially contributes to the costs of dentures.

Dental credit with installment payment from the dentist

Dental credit with installment payment from the dentist

If the patient notifies his dentist in good time that there may be serious problems in paying the cost of the denture, the dentist can offer direct support in many cases. This is especially true if he works with a partner bank that can arrange a cheap dental loan with installment payments if necessary. Often these loans are even completely free of interest. However, this only applies to a term of up to 6 months.
In certain circumstances, the dentist may also agree that the patient will pay the cost of the denture in installments. This is most likely to be the case if there is a longstanding relationship of trust between the doctor and the patient and the patient has so far proven to be reliable.

Installment loans from the bank

Installment loans from the bank

If you have a good credit rating and do not want to go through the dentist, you could also try to get a dental loan with payment by installments from your house bank or another German bank. The most important requirement is a positive credit bureau information and a regular income. The latter should ideally be so high that, in addition to paying the monthly repayment installments, there is still enough scope for subsistence, major repairs or other important expenses. The bank will draw up appropriate household bills here and adjust both the amount of the installments and the length of the term to the income of the customer. A bank loan is generally freely available and can also be used as a dental loan with payment in installments.

Immediate treatment without delay

Immediate treatment without delay

All credit options have the great advantage that the dentist can start treatment immediately and does not have to wait until the patient has saved the necessary amount of money. In addition to an installment loan, the overdraft facility on the current account could also be considered as a dental loan.

Loans for companies in difficulty: anti-crisis financing

The need for liquidity exposes companies, especially small businesses in difficulty, to the risk of having to pay high disbursements in an attempt to find the necessary money to overcome the moment of crisis.

A problem which, due to current problems, has become acute and chronic for an increasing number of companies that are increasingly proven from every point of view, with an increase in the fragility of the financial structure. To solve this kind of problem, the request for loans does not always become the solution to follow , both for the difficulties that a company in crisis has in obtaining loans, and for the weight of the overall interest rates applied.

However, this is a problem that can be overcome both thanks to European funding , normally provided by its regions, and through specifically created “anti-crisis” funds.

 

Loans for companies in difficulty: starting from revolving funds

company loan

One of the most important revolving funds was established (and is managed) by the Astro Finance , to which SACE’s intervention is added, which acts as a guarantee, increasing the chances of accessing credit, and above all at more advantageous conditions . These are loans with a duration of over 12 months, designed to breathe new life in a time of difficulty.

Numerous revolving funds are also allocated to the various Regions, but it is important to note that the possibility of using funds for cash rebalancing or to support the strengthening of the financial structure is not excluded in the regulation.

 

Loans for small businesses in crisis from the private banking system

Loans for small businesses in crisis from the private banking system

The ABI has been asked several times to offer concrete help to the difficult moment experienced by the credit sector. Therefore various initiatives have been activated to facilitate access to credit, even to those companies that do not qualify for participation in one of the active calls intended specifically for the production or services sector.

After the moratorium on mortgages , the time has come to allocate special funds, partly usable also for liquidity difficulties, as happened recently with the distribution of 400 million dollars from the EB and related intermediation by the Best bank. To be updated on business initiatives, you need to look in the ABI section, under “business support”.