Credit Declined – What To Do?

 

For many consumers who the bank refuses to apply for a loan, a world collapses when they really need the money. Nothing is actually lost, because if a bank declines, it does not necessarily mean that you will not get a loan. First of all, you should find out why the application was rejected and what you can do to get a loan.

Possible reasons for a loan refusal

Possible reasons for a loan refusal

In many cases, it is the applicant’s negative credit bureau information that causes the bank to reject a loan application. If you do not know the content of your credit bureau information, you should request your own information from credit bureau in the next step. This has even been possible once a year free of charge since 2010. It often happens that entries in the credit bureau are incorrect, so that the credit bureau information can be corrected and a loan is approved for a new request.

If a negative credit bureau entry is justified, you have to inquire with the bank under which conditions it is possible to get a loan despite the negative credit bureau information. If it is a completed and / or not so serious credit bureau feature, many banks are ready to grant a loan if a solvent guarantor is included in the contract or the loan can be secured in another way.

Apply for a loan without credit bureau

Apply for a loan without credit bureau

Loan seekers who receive a regular good income from a permanent position, but have a negative credit bureau information, with which they cannot get credit from German banks, can alternatively have their loan application processed by a credit broker who also arranges loans without credit bureau. You can only get a credit bureau-free loan if you can prove attachable income from a permanent position. credit bureau-free loans are generally more expensive in terms of credit costs than loans of the same amount from German banks and are only granted via a loan amount of USD 3,500.

The income is too low

The income is too low

Another reason that often leads to loan applications being rejected is that the applicants’ income is too low. This also happens when you are fully employed, but one of the low earners. The attachable income for a single person is currently just over 1,000 USD and most banks do not grant loans to people who cannot demonstrate a attachable income. Unemployed people, Social welfare recipients or recipients of sick pay are also affected because such wage replacement benefits are not part of the attachable income.

But here, too, banks often let themselves be talked about and later grant a loan that has initially been rejected if a suitable guarantor signs the contract.

If no guarantor is found

If no guarantor is found

Those who do not have a solvent guarantor or who do not want to burden anyone else with their financial problems can use other alternatives. For example, there is also the possibility of borrowing money from good friends or relatives, of going to the pawnbroker, or of providing life insurance if you have one.

If the rejection is justified due to poor creditworthiness

If the rejection is justified due to poor creditworthiness

Of course, there are always cases where the refusal of the loan application is only a logical consequence. No guarantor will be found and even good friends or relatives are unwilling to lend their money because the person concerned is obviously already in debt. In such cases, it is better to contact a debt counseling center for professional help and support.

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