Whether it is for the desire to renovate the house or because we want to change cars, to enjoy a thousand and one night holiday or – on the opposite side of the spectrum – for unexpected medical expenses, it is more than normal to find ourselves in the sudden need for a sum of money immediately available.
The reasons that lead us to apply for a loan are the most varied, but in any case we will have to make our loan request to one or more banks or financial companies.
Why a loan application is rejected, and what you can do?
The credit institution to which we have contacted will verify our income and balance sheet conditions, doing what is called creditworthiness screening. In the meantime, we will wait for the response for a few days – generally speaking 48 hours – already anticipating the possibility of doing that shopping or paying off that debt.
Unfortunately, a loan application is not always successful – that is, a loan application may fail. When a loan is refused, the most immediate consequence is that we will have to try to request it from another bank. Often, however, the first loan refused announces the rejection of subsequent requests.
Know that however in these cases all is not lost – quite the contrary.
There are different forms of loan on the market and if you have been refused one, you could get a different type of loan. The best thing is to ask multiple financials who will be able to make you estimates and advise you. Loan Here you can get a free loan quote from multiple credit companies, all by filling out a simple form.
But first let’s see why a loan is refused.
Why is a loan declined?
Let’s face it: not all ills come to harm.
In fact, if a first loan is refused to you, but you take the trouble to understand the reasons for the refusal, you can take those financial actions that will allow you not only to obtain a loan at the next request, but also to prevent your status from the Central Credit Register becomes negative.
Let’s go in order.
The bank is not required to explain to you why it has not given you a loan, but know that explanations will often not be denied to you.
The most common reasons for refusing the loan are
- Your information is missing or incomplete. It happens especially if it is the first time that you apply for a loan, and you are therefore unknown to the Sic databases. The bank will not be able to verify your reliability, but will inform you of the reason.
- You have too many debts to apply for another loan
- You have negative reports (due for example to the late payment of one or more installments of another loan)
- You’re asking too much money in one go
- Are you the guarantor of a bad payer, or is your guarantor a bad payer himself or does he not have a financial position to honor the debt if you become insolvent
One of these reasons will cause the funding practice to freeze. The bank will not be able to do anything to satisfy you.
Likewise, your credit worthiness may be deemed ineligible for a new loan. The reasons?
- Your income and assets are considered insufficient.
- You are a worker “at risk”, that is, you are subject to a fixed-term contract, and that perhaps is about to expire
- You already have substantial installments of a loan in progress (I remind you that their amount added to that of the loan installment you are requesting should not exceed 30-35% of your salary)
In the latter case, the bank is refusing your loan to avoid over-indebtedness.
As we have already told you, you need not worry if the loan is denied to you.
There are other loan solutions that you can also search for by filling out our loan application form which allows you to be contacted by up to three financials at one time.
What to do if you are denied a loan
The important thing is not to lose your temper.
Secondly, you need to know that you can do something even if you are refused a loan. This is why it is essential to know the causes of refusal with the utmost precision.
Let’s see the various actions you can take.
- If you have a negative report but you do not know you have made late payments, you can ask Crif where the report comes from, and then ask for the appropriate corrections.
Caution. Even when you make a loan request and it is rejected, you can be reported to the Crif for 30 days. Maybe without your knowledge: you will only find out by making a subsequent loan request (which in turn will be refused, perhaps for this reason).
In this case you don’t have to worry anyway. Even if the first feeling is to feel treated by bad payers, actually reporting to Crif in case of refusal of funding is a practice
- If you are reported as a bad payer in the SIC lists (for example, because you have paid at least two installments of a loan late), you must be removed from the list of bad payers.
- If the loan has been refused because of your employment contract, which is considered “at risk”, you can present documentation that reassures the bank or the financial company on the stability of your job. You can request it from your employer.
- If the loan or loan is refused to you because other loan requests are pending (which you may have completed online while looking for information on the best loan for you ) you can ask the institutions to which you have made the requests for a release with which it ensures that you you gave up.
- If the bank or the finance company believes that, due to the presence of other loans, you are not able to take on an additional monthly installment, you can study with the bank or with another financial the possibility of reviewing your debt situation. You can possibly apply for a new loan for a larger amount, which extends the repayment plan – the number of installments increases, but the amount decreases.