Currently the loan application process is very easy and can be done online. However, this convenience is no guarantee that your loan application will be approved. Did you know that every loan application will undergo a credit analysis process. This process will determine whether your loan application is approved or rejected.
So what if your loan application is rejected? Calm down, no need to panic. Do this step if your loan application is refused.
1. Find out why your loan application was refused
There are many reasons underlying banks to refuse your loan application. Therefore, you can start cleaning yourself up to find out what caused your loan application to be declined by the bank.
Banks reject loan applications for several reasons, including you having a bad credit history, a salary that is too small, the reputation of the company you work for poorly, incomplete requirements, unclear employment status, and improperly submitted collateral. Find out if you fit the criteria or not.
2. Improve your BI Checking history
Every loan application at a bank must go through an analysis process, one of which is through checking BI Checking. The bank will check your credit score, whether you have previously had a bad credit history or not. If so, this is the reason the bank does not approve your loan application.
The solution, improve your previous credit history by paying it off. If your credit history has improved, bring a letter of clarification from where you owe it, indicating that you have completed your previous credit obligations.
3. Re-check the required documents
Due to haste, sometimes there are document requirements that are not completed. Therefore, after receiving a refusal from the bank, it is better for you to double check the proposed documents.
Make sure all the required documents are completed in accordance with bank regulations. Don’t forget to pay attention to the validity period of the document. Because, these documents will be used by the bank as validation when you apply for credit. If the documents are incomplete, it is likely that the bank will refuse your online loan application.
4. Reduce your expenses
Excessive spending can be a reason for banks to refuse your application. Therefore, before applying for a loan from the bank, you should calculate the credit ratio from your salary. The bank sets a credit ratio of no more than 30%. This means that your spending limit is 30% of your monthly salary.
When your expenses exceed this limit, then your loan application will be very small approved. This is because the bank doubts your ability to repay the loan installments you are proposing.
Re-evaluating the causes of a loan being declined makes you better understand how to manage finances better. Do not rush to apply for a loan from another bank before you have completely fulfilled all the bank requirements.
As long as you take the steps mentioned above, then when you will apply for a loan again, you do not need to worry about the application will be rejected again.