In certain situations, we need additional cash. The first thought of many people is the bank and credit, but sometimes it turns out that after visiting the branch we receive information that the institution is not able to offer us any financial support. Does this mean a definite strike out of the chance of getting extra money? Of course not – in some cases, even if the bank does not want to give us credit, we will be able to borrow a certain amount from a non-bank company. Its amount depends on the specific offer and our capabilities. http://www.jj-technique.com/banking-puts-obstacles-to-the-financing-of-80-of-smes-according-to-the-cameras/ has examples
Reasons for refusal to grant a loan by banks
The bank may have various reasons that it will not accept our loan application. During the procedure of applying for funds, the institutions examine our creditworthiness. If this verification falls out – in their opinion – in an unsatisfactory way, then the credit will probably not be granted to us. Among the common reasons is:
- bad credit history
- too low earnings
- unstable revenues
These factors may affect both the total refusal to grant a loan by the bank, as well as to provide us with an offer that will seem unfavorable to us, including, for example, increasing the interest rate or reducing the amount of the benefit.
The specific conditions depend on individual banks, but if we have debts, we earn little, and we ask for a large amount or our income is irregular, we may have a problem getting a loan from the bank.
Credit history is usually checked using the National Debtors Register and on the basis of the Credit Information Bureau report . If the institution finds disturbing information there, it has grounds for not giving us financial support. Low income as well as instability can also be a reason for refusal.
Another issue is that if our budgetary position is not certain, then we should seriously consider whether it is a good idea to take on such an obligation.
Terms of non-bank loans
However, the problem with obtaining a bank loan does not mean that we are completely deprived of the opportunity to use additional sources of financing. In many cases it will be possible to borrow from a non-banking company, which is why it is worth to be interested.
Probably not every non-bank loan will be available to us, however, some entities offer solutions dedicated to people who can not submit evidence for a satisfactory financial position or earn their income in an irregular way.
If in this case we are considering a non-bank loan, we should consider those offers that limit the formalities as much as possible. In this way, the aspect of documents can be dealt with quickly and efficiently, and the necessary money can be obtained relatively quickly.
There are entities operating on the market that do not require any certificates, so we do not have to disclose their income. Therefore, if the bank refuses to credit us on the basis of low or irregular earnings, we can try to find an alternative solution for non-bank companies.
Some companies also offer loans without checking the interested party in the Credit Information Bureau, which allows financial support for those who already have other liabilities on their account. Limiting formalities may therefore have tangible benefits in such situations.
However, one must take into account that the loan amounts offered by non-banking companies are not usually excessive. It may not be possible to buy a home with these funds, so it is more of a way to finance the needs of a smaller caliber.
Undoubtedly, however, the proposed amounts can provide specific support for the home budget. So if there is a situation in which an important and urgent reason compels us to spend more money, we can help in this way.
No creditworthiness, and borrowing
Whenever we think about applying for a loan or a loan, we should think carefully. In the aforementioned cases, when the bank determines that our ability to pay off the liability is insufficient, it may be an unsettling signal.
Lack of consideration when borrowing may result in serious consequences, therefore a thorough analysis of our personal financial situation is crucial here. The spiral of debt is a serious problem for many people, because too much debt to repay is certainly a burden on the household budget.
The criteria set by the banks are therefore not unfounded. If we make little money, we may not be able to give away the borrowed money. If we receive our revenues only once in a while, then our situation is not necessarily certain – especially when the earnings depend on the number of clients acquired in a given period.
It must be remembered that even if we have a good run, the market can change it – there is no guarantee of long-term financial success. In turn, debts are a signal that we have not fulfilled our obligations in the past in a proper way – the reasons for this may be different, but this does not change the facts. That is why we should assess our financial situation by ourselves. However, this should be done in a prudent and rational manner.
A good strategy is simply avoiding the risk of loans. If, despite being aware that we will not be able to pay the debts, we are still taking on new obligations, we show irresponsibility and we can wait for the unpleasant effects of such actions. Execution of bailiffs and the never-ending hope that once a commitment is outdated is certainly an example of how unreasonable loans or loans can end.
How to borrow with common sense?
Certainly the fact that we want to take out a loan is justified in some way. However, we should approach the matter critically and consider whether this step is absolutely necessary. Perhaps it is in our case about some temporary whim or fancy to follow trends.
Borrowing for such purposes is not always a good idea, because we never know if there will be a really crisis situation in the future, in which money will be absolutely necessary. Quite a different matter are the moments in which cash is needed for sudden and justified reasons, for example related to an accident in a family or flooding a flat. However, even forethought and reason are desirable even then.
In each case, you must carefully analyze our ability to pay your liabilities. If we really want to borrow money for entertainment purposes, our financial condition should be impeccable. Momentary budgetary problems are not yet a disqualifying factor, provided that the prospects are better than just favorable.
In terms of money, there is usually no certainty that the situation will not get worse, which is why caution is very important. It’s good to know, however, that even if we are not the right candidates for a loan for a bank, non-bank companies can be supportive for us, while the limitation of formalities can sometimes improve the whole process. If, therefore, the conclusions from the analysis of our budget and risk are positive, this solution may turn out to be a temporary solution.