Financial pressure sometimes come to our life. You would thought that was normal untill bad luck made you suffered and you feel like applying loan to bank was the only way.
So you start try to apply for a loan to the bank and wait for the data to be approved. But what happened? Your loan proposal has been rejected. No one like rejection. If you experience this situation, and feel frustrated and even desperate try to look at some of the following reasons. Learn something!
We will discuss how you can improve your current financial records. Understanding the problem may increase the chance of successful loan application.
Here are some common reasons that may affect bank’s assessment and refuse your loan.
1. Have a Bad Financial History
This kind of point includes information on all applicant’s loan track record from loans and financing under current and problem conditions. Everything is recorded very well. Your historical information on payments are very update.
If you have a bad record and loan arrears, the bank may set you as a risky customer. If that happened so automatically your money loan submission is not approved. Then, how does the bank know your historical transactions and records?
All data in the form of credit card debt, loans, and others may be processed from an authorized financial institution member of the Credit Information Bureau compiled by Bank Indonesia. So try checking your historical IDI first before applying for a loan.
2. Having Too Many Loans
If the bank finds that the loan is too much: you may not get another chance to get approved. Banks will see other loan commitments such as home and car payments, credit card fees and other personal money loans.
Although all banks have different restrictions and rules to determine the maximum number of loans owned by customers, the general limit is 60%. Your monthly payment should not exceed 60% of your net salary.
If you really need a loan, consider taking a longer period, it can reduce the amount of bills paid each month. This can help reduce your loan rate to stay within the limits specified by the bank.
3. Your Salary Is Too Small
Banks typically have minimum earnings requirements for loan applications. But beyond this, some also set an internal limit for how much someone can borrow based on their pay rate. This differs from one bank to another.
Banks are also less willing to consider commissions as part of the salary they consider eligible. If most of the salary comes from a sales commission, you may have problems getting loan.
If your income is below average, some banks will still offer loan but unfortunately interest rate will be higher than normal.
4. You Have No Loan History
Bad credit history may not help you to get money from the banks, but not having a credit history does not mean it will easy submission of loan.
It is not a bad thing to have credit card or loan history, but how banks can assess your ability and experience as a good debtor. A proven track record of paying on time shows the bank that you understand commitment, and uphold discipline.
However, this should not be a standard benchmark for loan application. Some banks are willing to ignore this by offering loan with smaller tenors but higher interest rates. You might be able to try filing in more than one bank but be careful to exit your app.
So, there is some preparations before you go to the bank and bring a proposal to loan some money. You must improve your financial history before Bank can trust you.