For many consumers, it has now become a matter of course that they get borrowed money from the bank when they need a loan. For most citizens in this country, it does not pose a major problem, for example, to get a installment loan from the bank or to be granted a discretionary credit on the checking account
However, there are also many thousands of consumers in Germany, where the banks make a negative credit decision, reject the loan application accordingly. There can be various reasons why the loan request is ultimately rejected.
Income is insufficient
By law, all banks in Germany are required to verify in a loan application both that the borrower is creditworthy and creditworthy. While the creditworthiness can be determined very quickly on the basis of the identity card, the examination of the credit rating is significantly more complex. First and foremost, banks are guided by SCHUFA and income when they have to give credit ratings.
A common reason for rejecting a loan application is an inadequate income. The income does not necessarily have to be nominally too low, but on the condition that the monthly expenditure is higher than or only slightly lower than the income, there is also an insufficient income-to-expenditure ratio.
On the other hand, for example, an income of € 1,200 per month does not automatically lead to a rejection of the loan, for example if you only spend € 900 per month.
Characteristic almost always means rejection of the application
Another main reason why the loan application can be rejected is a negative entry in the SCHUFA. SCHUFA is as important to most banks as matching revenue and expenditure so that lenders are extremely sensitive to a negative listing. The most common negative features that lead to the rejection of the loan application include in particular:
• Arrest warrant
• Enforcement notice
• Declaration of an oath
• outstanding loans
If such an entry exists in the SCHUFA, in principle you can do little else than to ensure that the entry is deleted as soon as possible. Alternatively, of course, there is still the possibility to opt for a loan without SCHUFA.
Insufficient collateral ensures rejection of the application
Another cause that leads, in quite a few cases, to banks rejecting a loan application is the lack of collateral. While this is not usually the case for discretionary loans or installment loans below € 10,000, but especially with larger loan amounts, banks often rightly demand credit security, for example in the form of assignment of claims, pledging of securities or a guarantee. However, if you can not provide any of these collateral as a loan seeker, this will often lead to a rejection of the loan application because the credit default risk is then too high for the banks.