Why was I refused a loan? | Loans Quebec

Image result for denied loanTo receive a refusal for any type of application is not very pleasant. The worst thing to do in this case is to feel sorry for yourself and make yourself the victim.

You should rather stay objective and think critically. Ask yourself what you did not do correctly and who led to the refusal. This article will introduce you to the way lenders analyze the applications they receive. So, when you next apply, you will have some advances.

 

 

Unclear credit reports

Discrepancies, inaccuracies, or any other ambiguous detail on your credit report are enough for the lender to refuse your application. Track your payments instead. If you observe that you have been awarded improper penalties for delayed payments, contact the credit company to prevent this from affecting your credit rating.

Faults in the application itself

You decrease your chances of approval each time you mistakenly enter information. The inaccuracies may relate to information about your credit, your job or even your home address. In addition, if you do not complete certain passages of the application, it also reduces your chances of approval. Before submitting the application, make sure to review it to avoid any errors or omissions. Although this is a trivial mistake, it can be expensive in the end.

Employment history

Image result for employment historyThe first thing the lender will pay attention to is your employment situation. This is normal: a stable job means a constant income. Involuntarily, lenders will have more confidence in applying with a job because they have the opportunity to pay off the debt. If you have an irregular employment history, your chances of approval will be decreased. The secret is to make the lender both confident and comfortable in your ability to pay on time.

 

Income versus Debt

Before you even look at your employment situation, lenders will first look at your income. If your income is disproportionate to your debt, it may refuse your application. It might be a good idea to consider our debt resolution options .

Check your debt ratio

<strong>Check your debt ratio</strong>

This ratio will give you a general idea of ​​how much your debt is in relation to your income. We suggest you take a look at it from time to time. In order to calculate your debt ratio, you only have to divide the amount of your monthly debts by your monthly income. If your ratio is greater than or equal to 43%, you will be perceived as a risky borrower by the creditor. This means that your debt is high compared to your current income. In fact, to keep an eye on this ratio, choose a site to calculate the debt ratio as your Internet home page. So, every time you go on the internet, you will remember to monitor your finances. This will save you all unnecessary expenses and keep you on track.

Bankruptcy

The length of time that bankruptcy will appear on your credit report will depend on the type of bankruptcy. You do not need to remember that bankruptcy does not necessarily convey the desired message to the lender. Bankruptcy makes lenders less confident and less comfortable lending you money because they do not think you will be able to pay off the debt. Of course, each creditor is different, but your chances of approval will definitely be affected, especially if you have declared bankruptcy recently.

Using the credit card

Image result for credit cardTry not to overuse the limit on your credit card If, each time, you exceed your limit on the card, your credit score will be negatively affected. If, in addition, you have several credit cards and you use them to the maximum, your chances of approval will be even lower. Keep track of your expenses and try not to use more than 30% of the amount available on your credit cards.

The following suggestions should help you get a loan more easily in the future. To obtain a refusal does not amount to a personal failure. Many creditors have their own criteria that will be unknown to us and beyond our control. Stay positive and make sure your finances are under control.