If a loan is rejected, the applicant is often disappointed that he does not understand the bank’s decision. For example, installment loan grants are not related to luck. There are plenty of reasons why a bank refuses a loan. In most cases, these are the fact that the applicant cannot purchase enough collateral for the loan.
The conditions for receiving installment loans are set in the terms of each bank. However, due to legal requirements, only the borrower can get a loan. Therefore, on the one hand, consumers need to be protected from potential debt, and on the other hand, banks must be protected from potential credit losses.
But what is the specific reason why the loan is rejected? First of all, there is not one answer to this question because each bank can choose its own loan within the legal framework. As a rule, there are only two reasons why a loan is rejected: credit rating and age. Both reasons are quick and easy, but some consist of complex contexts.
Grounds for refusal: creditworthiness
The term credit rating is a summary of the borrower’s creditworthiness. Credit ratings are determined by various factors that the bank or savings bank recognizes that the borrower may actually be able to pay their installments. The worse your bank’s credit rating, the more likely your loan will be rejected. In the following, I would like to explain the factors that affect your credit rating.
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