What to do if your credit has been declined?

You have applied for a loan, are already looking forward to the capital, but then everything comes differently. The loan will be denied and you will have to rethink. This is very annoying, but no reason to despair. In many cases you can do a few things to increase your chances of getting a loan. What? This is what we reveal to you in this article. Here you can learn why a loan can be rejected and how you can safely get an alternative installment loan.

Why a loan may be rejected?

When granting a loan, the bank checks the creditworthiness of the applicant for security reasons. It convinces itself of the liquidity of the customer to ensure that he can repay the loan. If the bank finds arguments against the applicant's ability to pay, it will reject the requested loan. The reasons for this can be of various origins. The most important criterion is the creditworthiness of the applicant. Negative SCHUFA entries as well as professional insecurities are signs of a possible inability to pay the borrower. For example, are you still in your probationary period, do you have a low income, or have you just started your own business or. If you have founded a company, your professional situation may have a negative impact on your creditworthiness. The same applies to open chargebacks on your account statements, entries from collection agencies and overdrafts on your overdraft facility. But also the age plays a decisive role in the granting of credit. As an applicant, you must be of legal age and not exceed a certain maximum age.

These can be possible reasons for a loan rejection:

  • You exceed a certain maximum age or are not of full age.
  • You are a student, unemployed or in the probationary period.
  • You have a temporary employment contract.
  • You have been self-employed for less than three years.
  • The desired loan amount is too high compared to your income.
  • You have negative SCHUFA entries.
  • There are open returned debit notes on your account statements.
  • They have bookings from collection agencies.
  • You have overdrawn your overdraft facility.
  • You have provided incorrect information on the credit application.

If a bank rejects, it means that I can't get a loan from any bank?

If your credit application was rejected, you should not give up hope. You still have a good chance of getting a loan from another bank. Each bank can determine the criteria for granting a loan within a legal framework and define them individually in their general terms and conditions of business. In this regard, some banks are stricter than others, so you should just try your luck again.

Our tip: first find out why you did not get a loan and use the criteria set by the bank to best prepare for the loan before reapplying for it. We also recommend that you do not reapply for credit with the bank that rejected your application. If you're desperate to borrow from this bank, wait at least six months between inquiries.

Creditworthiness is the lynchpin when taking out a loan

Creditworthiness is the most important criterion for granting loans. It is the summary of your creditworthiness and indicates whether you can pay the due loan installments. The worse your credit rating, the more likely your loan application will be rejected.

The following applies: many different factors influence your creditworthiness. These include your employment history, income level, existing loan collateral, SCHUFA score and other debts you need to repay.

What can I do to get the loan?

If you find yourself in a poor position to apply for a loan, there are a few steps you can take to increase your chances of approval. Possibly a second borrower stands in for you. Basically, you have the option to apply for a loan with a second borrower. Perhaps your parents or your partner have a higher credit rating and are willing to take out the loan for you or your partner. To borrow together with you or to guarantee your credit.

Under certain circumstances, it may be sufficient to reduce the amount of the loan. As a result, the amount of the monthly installment decreases and your ability to pay increases. As a general rule, you should make sure that after deducting current rent and living expenses from your income, you have enough money to pay off the loan each month.

In any case, you should check your SCHUFA records. Not all information is always correct. Take advantage of the annual opportunity to obtain a free self-disclosure report. So you can check your SCHUFA score and delete any erroneous information or. Have it corrected.

In addition, you should carefully check the information on the loan application. Incorrect data are noticed by the bank at the latest with the SCHUFA information and can also trigger a rejection of the loan application. Better be honest. List all your debts and possibly apply for a rescheduling of all outstanding items.

If the measures mentioned so far don't help, you can increase your loan collateral. For example, you can take out a life insurance policy or deposit wealthy items such as real estate or vehicles as collateral. In addition, always make sure that you have a good payment record. Always meet your payment obligations on time, avoid chargebacks and overdraw your checking account as rarely as possible. This is how you express financial reliability and increase your prospects of getting a loan.

Conclusion: react cleverly to a rejection of the loan application

If your loan application is rejected, this does not mean that you are out of the financial woods. You may be able to obtain the desired loan from another bank without having to change anything in your initial situation. In addition, you can improve your credit rating, deposit collateral or bring a second borrower into play. The best thing about it: we at kreditexperte do not leave you alone with it. With us you can compare available loans and easily find out which loan fits your current financial situation. Try it out and increase your chances of getting a loan.