Accepting a rejection is very difficult, especially when we talk about money. Let’s analyze the issue of when you want to obtain a personal loan and the application is denied. This leads to demanding a response from the bank after the rejection because the time and effort spent preparing the requirements and the anxious waiting for the loan approval was in vain.

It is not necessary to lose your temper trying to reverse the bank’s decision. The main thing is to concentrate and calmly try to find out the reason for the denial of the request. Personal loan providers In the Philippines, as in many others, the decision to approve a loan or not is based on the applicant’s financial profile as well as on credit investigations and background checks carried out by the bank or the financial institution to which The request has been made. The following reasons are the most common when receiving a rejection of a personal credit.

Insufficient income

If the applicant’s income cannot guarantee the monthly payment of the credit, the application will be rejected, so it is not enough to have enough money in your account. Applicants must fulfill an annual or monthly minimum income requirement. Always verify the minimum income amount required by the bank where you are going to submit the loan application before completing the form. Certify that the income match the requirements.

Let’s look at this example, BDO, requires an annual income of at least PHP 400,000 for self-employed or PHP 120,000 for employees to approve a personal loan. In turn, the BPI bank requires a monthly income of PHP 50,000 or annual PHP 600,000 for the self-employed and for PHP 25,000 employees monthly or annual PHP 300,000 to approve the loan. In Citibank the requirements are an annual income of PHP 250,000 or monthly income of PHP 20,833.

Unstable Employment Record

The approval of the application does not only depend on having met the income requirements established by the bank. The minimum tenure of a job or the duration of the service is also required. Banks and lenders need assurance that borrowers can make loan payments during the stipulated period. Of course, if you do not have a stable job or have a doubtful employment record, it is difficult to take it as a responsible person. Having a job during the period of at least one year is a requirement for applicants.

Loan amount too high

When the requested amount is too high, the bank may reject the request. If, upon completing the application, you entered an amount too high in the field of the desired loan this could be the cause of a personal loan rejection. There is a possibility that the amount indicated is very high compared to your income and what you could really Pay for this error the next time when applying for a personal loan you can make use of the loan calculator to be sure of the amount you can actually ask in relation to your income. Avoid making the mistake that the amount exempts what you can really pay.

Bad credit history

Before approving a request to make a decision on whether to approve the credit or not banks check the credit history. A good credit history is very important. It does not matter if the applicant has high salaries and stable jobs since the credit score demonstrates the attitude of the borrower in his previous debts, if he paid the total debt, if he did not have arrears in the previous payments and this is the only factor that leaves to take into account when approving the application.

Sometimes errors occur in credit reports that therefore lower the credit score. Typical errors are late payments, closed credit cards or outstanding debts when in reality everything is already settled. If the bank rejected your loan application, check your credit history and credit report and update the information in the records to obtain a personal loan approval.

Many debts

Do not apply for a loan if you have too many debts to pay. Once your bank discovers that your in relation to your income, consider The application will be rejected as soon as the bank finds that you have debts that are too high with respect to your income level. Divide outstanding credit card debt and monthly loans by monthly income, the debt-to-income ratio should not exceed 12%. This will prevent a rejection of the bank.

Incomplete details

Try not to make mistakes when completing the form. A simple error in the application can bring a denial in the loan request. The integrity of the personal and financial information of the borrowers must correspond to the data provided. Make sure that you have not made mistakes and that the information is true otherwise you can verify your data, the process of the personal loan request will take some time to be approved or it will be rejected that it is the worst. Be attentive as you will receive calls from the bank to verify your data.

The rejection of a loan is somewhat disappointing. In order not to receive a denial, try to improve your credit history and comply with the established requirements and you will see that your application will be approved.

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