The Main Reasons for Refusing Loan
The reasons for refusing a loan can be conditionally divided into standard and non-standard ones. The former ones depend on the borrower, his or her past credit behavior, current financial and career situation, and are influenced. The latter are independent, and at first glance, they may even seem random. The borrower cannot influence them in any way.
Standard Reasons for Refusing a Loan
- The presence of late payments and other negative information in the credit history. If you are not paying the loan to another bank now, the new one will not approve the loan. Or you have had experience with large arrears recently, a personal loan Singapore will also refuse you. Even if you have successfully closed a debt, it takes time for delays to influence the decision to give a new loan.
- You have a small income or you cannot verify its source. Everything is simple here. To be sure of repaying the loan, the bank should see you have a stable and high enough income to pay it back. If you don’t have it or can’t confirm it, then you will be refused in giving it.
- Information about the employer. Also, the stability of your income depends on the stable work of the company in which you are employed. If it turns out the company is unprofitable or suspicious, or the back cannot reach its representatives, you may be refused.
They may also refuse a loan if you have made too many attempts to get it in recent times or if you made a mistake when filling out a bank application. Mistakes in the first name, surname, passport or other data are automatically perceived as false data that is a fraud. So you can get a loan denial because of a typo; be careful and provide the correct data, it is suggested to double-check it.
Non-standard reasons for refusing a loan include cases when you do not fit the bank according to the requirements of the lender. The lenders make an internal decision whether they want to work with one group of borrowers and don’t want to work with another which you have got into.
Another reason is when a bank stops lending to borrowers employed in an entire industry. This, as a rule, is dictated by the conjuncture of the moment, factors in the development of the national or even world economy. Employees can also pay attention to untidy appearance: dirty, torn clothes or an unpleasant smell. An untidy appearance can lead to failure.
Surprisingly, the reason for the refusal may be either too good credit history or too little requested amount. And it’s not just about whether the client will be able to pay the debt load back. There may be a reverse situation: the borrower’s income is high, and the amount is too small. Based on this, the bank may assume the client settles the loan too quickly and the institution simply does not have time to make much money on it. A criminal record is another complicating factor.