Under the issue of “difficult loans” there is a very wide range of banking and non-banking products. However, we will focus only on banking items. We will try to explain the reasons why a good adviser or broker is still unable to obtain a cash loan for the client.
Credit refusal in 90% of customer cases results from choosing the wrong bank. Not every bank openly provides its lending policy requirements, which is why customers blindly wander around in banks, hoping that another bank will agree to their lending.
Difficult loan resulting from high crediting
A frequent reason for refusal is the bank’s reference to the alleged lack of capacity or the high rate of crediting the client. Banks have limits available for specific customer categories. Such a limit may be, for example, maximum crediting of 20 times the client’s income. This information is not publicly available and the client, without this awareness, will be refused.
This category also includes refusals due to too fast credit rate. If all loans are fresh, the bank will refuse a month or two because of too high a risk . A good adviser or credit broker will direct the client to a bank who approaches these issues more liberally.
Difficult credit resulting from a large number of credit inquiries
It is a mistake for customers to make a large number of credit inquiries. When meeting a bank’s first or maximum second refusal , the client should contact a professional credit bureau. When a client comes to us after making 5 credit inquiries himself, and another 5 by a random credit advisor it can be hard. When these are inquiries from the non-banking sector, we can still deal with it somehow. However, when these are bank inquiries, we will first have to apply for their removal from BIK and then proceed to credit the client.
Difficult credit resulting from temporary work / employment contract
A large group of clients are refused bank loans, only for the sake of a timely employment contract or assignment. With such clients it is necessary to know the requirements of banks. Banks approach this issue differently, some accepting a short period of work, others may agree to a fast-ending contract period. The advisor’s role is to adapt the current working period to the bank’s spread limits. Demonstration of work continuity or promise will certainly strengthen the client’s situation.
In the remaining 2 cycles (Difficult loans, the case of consolidation loans and Difficult loans, the case of company loans) we will try to address other, equally frequent problems of refusals.