If you’ve ever tried to get money loans from a bank, you know how challenging it can be. Their list of requirements are quite stringent, and if you don’t fulfil them, you can’t get a money loan. Here’s why, and what you can do about it:
When Consumers Have Too Much Debt
One reason why banks are hesitant to give money loans is when the applicant has a lot of debt already. When they provide a money loan, it’s because they trust that it will be repaid in full and on time. However, if the person applying for money loans already has debt, it’s a worry that they’ll default on a payment.
It’s Too Much Debt Compared To Their Income
When you get a loan, one primary requirement is that you have bank statements and payslips to prove that you can afford to repay it. However, when you have a lot of debt already, the bank can see what you can afford to repay. If they believe that you can’t afford the repayments, they’ll deny the money loan to protect their interests.
Questionable Or Bad Credit Scores
Your credit score is an overview of your credit history. Every time you pay a debt or default on a payment, your credit score changes accordingly. If you have a questionable credit score or a bad credit score, the bank determines how high the risk would be to invest in you by providing a money loan. If they think the risk would be high because of your credit score, they won’t approve your loan request.
Talking about credit scores, if you’ve experienced a bankruptcy, it remains on your credit report for about ten years. That means that if you apply for money loans at a bank, they can deny your application because of previous bankruptcies which have affected your credit score.
What Can You Do?
When a traditional bank fails you, you can apply for money loans from private lenders. They provide small, short-term loans with a short amount of time that you can repay them in. Their requirements are less strict, and you can apply for them even if you have bad credit.
When you’re strapped for cash and need access to money quickly, the bank doesn’t have to be your first port of call. You can also approach private lenders for money loans, who have a more manageable process and list of requirements.