The reason for a loan refusal is generally the subject of oral explanations, the counselor confining himself most of the time to repeating the reasons announced by the risk analysis service. Even if you can not force the bank to provide explanations in writing, it is essential to know in detail what motivated the refusal of funding, if only to better prepare a new application from a competing bank.
Review of the main reasons for refusal of loan and the advice of our experts to prepare a new file in the best conditions.
The 6 main reasons for refusing loans and how to fix them
Debt ratio too high
Main reason for refusal of loan by the bank, the debt ratio deserves a thorough analysis. It is indeed possible in many cases to modify the result.
You have credits in progress
If you have one or more credits in progress, it is likely that they are the cause of your debt being too high. Before representing the file to a new bank, try to solve the problem. For this, three solutions:
- Extend the term : redo your financing plan over a longer period . Since the beginning of the financial crisis, network banks have tended to offer loans over 15 or 20 years. Apply with 5 or 10 more years. Nothing prevents you as a result of increasing the monthly payments to shorten the duration. Try your luck at a specialized institution , usually more inclined to accept long periods.
- Partially repay one or more consumer loans . For that, if you do not have a contribution, ask for a family loan that you will repay according to your possibilities. Do not report it to the bank so that it can not calculate the debt ratio.
- Start on a less ambitious real estate project : perhaps it is necessary to go to the evidence. Sometimes it is better to go on a new project, cheaper rather than cumulate failures.
Still to live insufficient
Banks are more and more demanding about the minimum amount of household living , ie the amount available after payment of all the monthly installments of credits. This amount depends on the number of people living in the household.
Thus, it is possible to be refused a loan with a good debt ratio if the balance remaining in account is considered insufficient.
On the other hand, a loan with 36 or 37% debt is likely to pass if the rest to live is important, which is often the case for borrowers who have high incomes.
Bad bank accounts
Although this is not a critical element, it does not preclude that bank statements for the last three months should normally have a credit balance. However, it is rare that a debit leads to a refusal of the file. On the other hand, repeated payment incidents (checks or withdrawals rejected) will ruin any chance of success.
If a few rejections of the samples lead to a loan refusal , wait until you can re-submit an account history (last 3 months) without any payment incidents. The bank does not consult account transactions carried out beyond three months.
Unstable job situation
A loan commits you for a long time. In the case of a home loan, the banker will want to have a real guarantee on the sustainability of your income.
- If you borrow alone, you will need a CDI .
- If you are in a relationship, it will depend on the overall situation of the household. Clearly, if you are both on fixed term , the file is normally refused. If one of you is on a fixed-term contract and the other on a permanent contract, the bank will analyze the part of risk that rests on each co-borrower.
To know : An acting activity can be likened to a stable job if it is presented without interruption over a significant period of time . If you are in this case, represent your file. Many banks are understanding on this point.
Refusal of the bank guarantee
When the guarantee relates to a mutual guarantee type Credit Housing , know that the surety company will study your application with the same requirement as the risk analysis service of the bank.
In case of excessive debt, it is possible that it refuses your file. The solution is then to propose to the bank to opt for a mortgage registration, more expensive and more restrictive than the deposit but which will circumvent the problem. Another solution is to ask the personal and solidarity guarantee of a member of his family. It is strongly advised to weigh the pros and cons before embarking on this path.
Problem related to insurance
A credit may be refused while all the financial elements that make up the file are favorable. When the reason for the loan rejection due to a health problem, the bank must apply the AERAS agreement (if T o and E mprunter with R isk A ggravé of H ealth) that requires him to seek alternative solutions with you .
On the other hand, in the context of a consumer credit, the AERAS agreement makes it possible for borrowers under 50 years of age to benefit from insurance without a health questionnaire.