Please read the following information patiently. At the end of the article, you will become a loan expert and you will definitely not make the same mistakes again.
Often, people who already have loans find it difficult to apply for a new loan. This is why, together with my team, we can help you get a loan for free and we handle the whole process from A to Z.
I know the bank’s calculation algorithm, the credit scoring system, the offers and all the details about how these loans are granted. Thus the chances of obtaining it increases up to six times. If you have received countless refusals from banks so far and are ready to finally receive an acceptance, apply for a free consulting session here.
Lack of goodness
Everyone has heard of this term, but not everyone understands what lies behind the concept of goodness. The lack of goodness can be due to several reasons :
- Loans have taken excessively, the sum of their rates exceeding 50% or 65% of the debtor’s average income. The chances of obtaining additional funding in this context are almost non-existent. Beginning with 2019, the law no longer allows the total amount of a person’s rates to exceed 40% of his income, which considerably reduces the chances of people who already have credit rates taken in previous years exceeding this value. In such a situation, my recommendation is to consolidate the loans (through a refinancing loan) and reduce the monthly costs for the installments, because the credit is directly related to the monthly payments paid by the borrower.
- If refinancing is not possible, then an attempt should be made to restructure the loans, which may reduce the monthly amount of the rates.
- Of course, another good idea is to find an additional source of income or a person who can help you with a loan. Many people, unfortunately, overestimate their credit repayment skills or fail to take into account certain expenses they have, which makes them have problems with timely repayment of loans.
How to properly estimate your creditworthiness for a particular type of credit can be found on my blog. To calculate the cash lending capacity, you can use my bank loan calculator for cash loans.
The score of a person applying for a loan is calculated at each bank to which he applies, and each bank uses different algorithms to calculate it. Specifically, it is obtained from a collection of personal data that the potential debtor provides when completing the loan application together with the score from the Credit Bureau. It is considered to a very large extent.
Based on this evaluation system, banks classify clients into different groups (customer categories). Each category is assigned a credit offer that suits it and is considered to be refundable by that customer. Of course, it is good to know as a guide what conditions can be offered for each group. Often, bankers, despite the correct evaluation of customers, create more expensive offers than those that the algorithm generates and would be suitable in reality, to obtain a greater bonus.
If you want to find the cheapest loans, I invite you to use the tool we created to determine the cheapest loans, by comparing the offers on the market. In the credit section of my blog, you can find such comparison tools for both installment loans and short term loans.
Fixed-term employment contract
I worked with a lot of people who had a fixed-term employment contract and would be ending in the next 6-12 months. This contract was accompanied by comments that it would be difficult to obtain credit. It is not necessarily true, the minimum that some banks accept is a work contract for at least 6 months, and with such a contract a loan of up to 5-10 years can be obtained.
There are, however, some banks that pay particular attention to the duration of the employment contract, or the history of employment of the clients. Take as an example a client has been employed for the last 12 months and in this period has 2 contracts for a fixed period at the same company, and the present contract is nearing completion. This record can be a pattern in the eyes of the bank.
This is a positive factor because it shows the continuity of professional life and denotes responsibility from the client. Of course, most people turn to the bank’s credit offer for which they have their personal accounts, which is why, in the event of interruptions and breaks in employment history, the bank will observe this in the statement of account. In this context, long-term employment contracts accompanied by breaks between the jobs the client has had maybe a reason for refusing credit.
However, if the respective bank decides to grant a loan to a person with breaks between the jobs he/she had, this may reduce the amount he/she will receive and also affect the period of credit repayment.
Why do some banks act this way? In fact, they act by taking risk factors into account. However, there are banks, as I mentioned earlier, that are more tolerant of the fixed-term employment contract. You only need to know which banks to call in this situation and which documents to prepare. I disclose this information to my readers who call on the personal advice I offer for free on loans.
Too many credit applications
Many people choose to play the “credit intermediary” and go on their own from bank to bank to ask about credit offers. Bank employees most often ask for their ID cards and signing the loan application, motivating this with the fact that, otherwise, they are not able to offer a correct offer.
A person who arrives in 3-4 banks on the same day to find out the loan offer will be checked at the Credit Bureau by those banks. So many checks in such a short period of time attract attention and create negative feedback to the person concerned.
Thus, banks protect themselves from such a person. The checks are immediately reported and kept in the credit bureau’s archive, which represents for many banks an alarm signal that the person may have already received a loan from another bank to which he has already applied. Of course, there are banks that accept a large number of applications, taking into account the last 2-3 months.
I have included in my loan offer these banks that do not pay special attention to the investigations from BC. However, it is good to be careful and avoid making too many requests in a short period of time as they cause your credit bureau to drop. I will detail this topic later.
I just want to mention that each bank has a grace period after it refuses to apply for a loan. For example, if you have been denied the trick, for the next six months you have no chance of getting a loan from that bank. Many people get this way and greatly reduce their chances of getting a loan.
Holding non-bank loans
The loans offered by non-banking financial institutions have become so commonplace nowadays that any client has heard of them at least. We have even created tools for comparing short-term non-bank loans and non-bank loans in installments, which help you find the best deals.
A client who has even taken a free short-term loan can greatly reduce his chances of obtaining a bank loan (of course, here we are talking about cases where that credit is still in the process of being repaid and not fully paid ).
However, there are banks that offer refinancing loans, but the process for obtaining them is not very easy because it depends on many variables. In this type of credit, the client can transfer all his debts to a single bank, which he refinances. The interest on such a loan is lower than the current loans. It is a complicated operation, but it offers great savings to the debtor.
Delays in payment obligations
Delaying the payment of credits or installments of restore can have negative consequences. If the payment term is exceeded by a maximum of 30 days, it should not be a problem, but if the payment delay exceeds 30 days, the bank can issue a negative decision that will be reported to the Credit Bureau. Also, if the client delays monthly payment of the networks by a few days, the analyst may consider it a repetitive behavior and may not grant the respective client another credit.
Too many credit obligations
Many banks offer so-called “one-click” loans to existing customers. Once you log in to the electronic banking service you can click on the loan offer and the credit is granted quickly in most cases. Many people, who have multiple accounts at different banks, take such loans and wake up at one time with 10-12 cash loans in their accounts. Despite the fact that these payment obligations are paid on a regular basis, some banks have in their credit policy a limit on the number of commitments a client may have in order to be eligible for another loan.
If, after checking with the Credit Bureau, it is observed that the client has for example 7 credits (the limit is different depending on the bank), the request will be automatically refused. It is for this very reason that it is very important to use the help of an experienced person who knows which bank accepts a certain number of commitments.
Statistically speaking, only one person in 10 receives a cheaper loan from her bank (the bank she is already a customer) than the cheapest loan on the market. Of course, it is essential to know which bank to go to, but besides the bank’s offer, we must take into account that each one has a different credit score which influences the cost, the amount and the period of the credit. There is not only one bank that can be the cheapest on the market, but you have to find the most genuine offer you can get yourself personally in the situation you are in.