Do you find yourself repeatedly refusing your loan applications? One of the most frustrating aspects of this is that you do not get a reason for the rejection.
Therefore, you may end up walking around and be frustrated with this. If this is something you are experiencing, then it is a good idea to investigate the most frequent reasons for a loan application being rejected.
Keep in mind that it is a business to act as a lender
Lending money is not charity. It’s pure business. This is why it is important to think about this when you need to take out a loan. It is not possible for you to avoid paying for it.
If you keep in mind that a lender is a business, it is typically easier to understand what is causing your rejections.
What are typical reasons for a rejected loan application?
You are always credited for a loan application. If this proves to be negative, it is not possible to get a loan. Therefore, a poor credit rating is the most typical reason for a rejection.
This will result in you being placed in a so-called risk group. If this happens, it is because there is a high risk that the loan applicant will default on the loan. The two main reasons for this are as follows:
1. If you are registered as a poor payer in RKI
If you are listed as a poor payer in a register like RKI (Ribers Credit Information), then your options for borrowing are very limited. With such registration you prove that your credit rating is not good.
As a borrower, you have virtually no option to take out a loan if you are in the RKI or in the Debtor Register. Do not make any hopes that you can escape through the needle eye as it is always something that is checked.
2. If your income is too low
Your income is crucial to your ability to borrow money. This is something that will always be looked into when you need to take out a loan. They are assessing whether you can afford to pay your installments.
If your income is too low, you will not be allowed to borrow the money you would like. However, you can borrow money from a lender online regardless of your income, but you cannot borrow all amounts if your income is low.
3. If you have existing debt
If you have existing debt to the same or other lenders, then it is a good idea to make sure that it is repaid before you submit an application for a new loan. It can be crucial for acceptance.