TOP-5 main reasons why your loan was declined

Sometimes clients, applying to the bank for a loan, are refused. Reasons for refusal to issue a loan can be different. We will list the most common ones and tell you what to do to increase your chances of getting it.

Problems with credit history

Problems should be understood as a damaged credit history. This is the most common reason why banks refuse loans. Credit history is a detailed dossier of the borrower, which stores information about his payment discipline: emergency loans online that he took before from banks and financial companies, fixing the amounts, dates of all payments and delays, if any. Banks transfer this data to credit bureaus, which accumulate it.

Before issuing a loan to a client, the bank evaluates its reliability and solvency. The scoring system is responsible for this. It simply blocks clients with a damaged credit history, in which there are delays and "hanging" loans. To those who do not have this history, she will be wary: she decides not to give money at all or advises to lend a small amount and at a higher interest rate.

What to do

If the credit history is damaged, it needs to be corrected. First you need to figure out what exactly is wrong with a credit history.

If the bank does not like something in it, but you know for sure that all your loans were closed on time, then most likely a mistake has crept into it. Everything is simple here. Check your history, find the error, and file a misrepresentation. You can apply with it either to the bureau or to a specific bank that has transmitted incorrect information about you.

It is much more difficult if the history is corrupted through the fault of the borrower himself. Only a good story can fix a bad story. Getting it will not be easy, but possible. You will have to take new loans and pay them back on time. Financial companies that issue online loans, which do not have such stringent requirements for borrowers, can help here.

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What is the loan term?

  • Minimum loan term: 122 days
  • Maximum loan term: 122 days for first loan
  • Maximum loan term: 182 days for repeat loan

The loan is calculated as follows

  • Loan amount: RS 30.000
  • Loan period: 122 days
  • Consulting fee: RS 3.600
  • Service fee: RS 13.920
  • Interest rate (12% / year) : RS 754
  • Total payment: RS 48.274

Am I eligible for a loan?

You are eligible to apply for a loan if you are:
  • A citizen of Sri Lanka
  • Residing in Sri Lanka
  • Between the ages of 20 to 65 years old
  • Currently employed or generating a steady income

Age of the borrower

Age of the borrower

Each bank has its own rules regarding this. Some lend from the age of 18. Others need at least 21, others need 23 or more. The same applies to the age limit. In some banks it is 60, in others - 65, in others - 70 years.

If, in the understanding of the bank, the client is not suitable for age, he will definitely be refused.

What to do

Find a bank that is more loyal to young or old borrowers. If you are denied a loan at one bank, go to the next one. As a last resort, you can apply for an online loan sri lanka from microfinance companies that cooperate with credit bureaus. Usually they are not as suspicious as banks. In addition, some give out the first loan almost free of charge (at 0.01%). So you can start a good credit history and count on the location of other creditors in the future.

Lack of income statement

Lack of income statement

Many banks require a potential client to provide proof of income from work. It implies the presence of official employment, which not everyone has. A lot of people today receive a salary in an envelope. In some banks, such customers will be denied a instant cash loans.

What to do

Try to convince the bank of your solvency. Banks are adapting to the reality in which they have to operate. They are aware that among people who cannot provide a certificate of income, there are enough solvent customers. And many are willing to work with them. For example, many banks do not require proof of income from employed clients who cannot provide one. It is enough to name the place of work and give the telephone number of the personnel department so that the bank can be convinced of the correctness of your words.

The main thing is not to try to deceive the bank by drawing "fake" certificates. His security service will definitely reveal the catch, and you will be included in the "black list" of scammers. Then it will be possible to forget about online instant loans both in this and in other institutions.

Important! You can apply for a loan without a certificate of income in the financial supermarket Gost Finance. Specify the loan amount, the term for which you want to take it, and you will see a list of banks and companies ready to provide it. Everything is simple.

Lack of registration

Lack of registration

For many banks, this can also be a valid reason for refusing a loan.

What to do

show documents confirming your ability to pay or take an online loan. The fact of the absence of a residence permit can be smoothed out by documents confirming your solvency: the right to own real estate or a car. If you are not registered anywhere, but you, for example, have your own apartment, the bank may turn a blind eye to this.

Another option is to apply for an online loan from a microfinance company. For them, the lack of a residence permit is not an argument for not giving a loan. The high interest rates at which they issue their loans more than compensate for the risks of non-repayment. Therefore, they are ready to forgive borrowers for the absence of both income statements and registration.

Errors and inaccuracies when filling out the questionnaire

Do not hesitate, the bank will carefully check everything that you have told about yourself. Any mistake or inaccuracy in filling out the questionnaire can lead to the fact that he will refuse a loan. For example, if you make a mistake with one digit in your home phone number, you can inadvertently indicate a number that appears in the bank's database as an office number. Scoring may regard this as an attempt to provide deliberately false data.

An error in the series or passport number will easily lead to the fact that you indicate an invalid or lost document and you may be considered a fraudster. The same will happen if you indicate in the questionnaire an erroneous or invalid phone number of one of your friends or relatives.

What to do

carefully check everything that you specify in the questionnaire. Enter only valid information. Warn friends or relatives whose phone numbers are listed in the questionnaire that they may receive calls from the bank.

Conclusions and recommendations

Conclusions and recommendations

If you were denied a loan, try to clarify the exact reason with the bank manager. There is a small chance that you will be called. However, usually banks do not do this. After all, knowing them, it will be easier for fraudsters to deceive scoring systems.

If it was not possible to find out the reason, it makes sense to go through all of the above points in detail. Most often, the reason lies in one of them.

Before you take out a new loan, you should:

  • check your credit history;
  • carefully fill out the loan application, indicating only reliable data in it;
  • warn close people, whose phone numbers you indicated in the questionnaire, that they may receive calls from the bank.