3 Reasons Why Bank Loans Fail

WHY? Why can’t I get a bank loan? This might be a question to yourself when you want to buy a house, car or to operate a business then you loan from bank but you get denied! Today, we are going to talk about how to do a bank loan, find out the reason why your bank loan failed and the solutions. Let’s get started.

Reason for Bank Loan Fail

1. The bank loan application documents are incomplete.

This is a basic thing that should be checked prudently. Most people fail at this stage. You need to understand that a bank loan is a loan that does not require any collateral such as a house, car or land. Thus, the documents must be carefully checked in order to consider the bank loan. 


A preliminary document to be prepared for a loan

  • A copy of ID card
  • A copy of the house register
  • A copy of the marriage registration (in case that a joint borrower is a spouse)
  • A copy of proof of firstname-surname change (if applicable)
  • In the case of a corporation, a corporate registration certificate, a copy of the trade register, is required.
  • Financial documents, in the case of a corporation, include a copy of the latest financial statements, a copy of the annual income tax statement, a business location map, and property rights documents.
  • Financial documents, in case of fixed income earners, include salary certificates, salary statements, bank deposit account books.
  • Financial documents, in the case of independent professionals, include employment copy or proof of payment. In the case of doctors, lawyers, auditors and engineers, a professional license is required. Statements dating back 6 months evidence of income and property.

2. Liabilities, bad financial records

Those who have a lot of credit cards but do not manage well in using and pay back, do not pay debt on time or do not pay debt at all will damage the financial records of themselves. This is one of the factors that cause bank loans to fail because the bank thinks you have tended to not pay back the loan. The solution is to pay all the debt as soon as possible. You might have passed the bank loan.

3. Never had a credit history.

Many people might think not having any debt must be great, but the bank will have no idea about what would you do if you have debt to pay.  Thus, the bank decides not to give you a loan or it will take much time before the approval for the loan. However, you need to check if the bank you are going to do a bank loan with has this policy.

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