Loan application rejected: grounds for refusal
Are you looking to submit a loan application and you want to know what grounds could be used for refusal? Your loan application was rejected and you want to know the most likely reasons for this?
Broadly speaking, the grounds for rejecting a loan application can be divided into 4 categories:
- Basic conditions not met, concerning the applicant’s age, financial situation, nationality – residence permit – legitimation card / place of residence, professional situation
- Loan amount greater than the legal ceiling (budget calculation)
- Negative ZEK code
- Poor credit score
Basic conditions not met
Under 18 or over 70 years of age.
Income: less than 2,600 CHF net per month exclusive of tax.
- Declarations of insolvency: instant refusal
- Involved in unjustified legal proceedings without solvent spouse
F, N, S residence permit: instant refusal
B & L permit:
- Permit issued less than 6 months ago.
- Permit issued between 6 and 12 months ago: if the amount exceeds 15,000 CHF
You work in Geneva: term of employment contract not exceeding 12 months at the time of your application.
You work in other Swiss districts: term of employment contract not exceeding 36 months at the time of your application.
Main residence abroad: instant refusal
Loan amount greater than 5 times the monthly benefits.
- Residing abroad
- Less than 3 years of activity
Term of employment contract not exceeding 12 months.
Loan amount greater than the authorised ceiling
If the amount of your loan exceeds the authorised ceiling with regard to your personal situation (income and expenses), refusal is guaranteed.
Negative ZEK code
If your credit history comprises a ZEK code that is considered to be negative, your application is likely to be rejected.
Poor credit score
A poor credit score, the weighting of which is specific to each bank, may lead to a rejection, even if the basic conditions are met and the budget calculation complies with the directives of the Swiss Consumer Credit Law.
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