The 4 Main Reasons for a Loan Rejection

Are you planning to apply for a loan and want to understand the potential reasons for a rejection? Have you already been denied and wish to identify the probable causes?

Content

Failure to meet basic requirements
Loan amount exceeding legal limits
Negative ZEK code
Poor credit scoring
Consequences of a rejection

The 4 main reasons for a loan rejection

In this guide, you will learn about the most common reasons for a loan rejection and their consequences, helping you to better prepare your application and maximize your chances of success.

A loan rejection in Switzerland can be attributed to one of the following four main categories:

1. Failure to meet basic requirements

Basic requirements include age, financial situation, nationality, residence status, and professional situation.

Age:

Being under 18 or over 70 years old leads to an automatic rejection.

Financial situation:

Insufficient income: Less than 2,600 CHF net per month.
Certificates of unpaid debts: Any such certificate leads to immediate rejection.
Unjustified debt collections without a financially stable partner.

Residence permit:

L, F, N, S permits: Automatic rejection.
B permits: If issued less than 18 months ago or for higher loan amounts, rejection is likely.
Cross-border commuters (G permit) or Swiss citizens living abroad: Conditions vary by canton (minimum 12 months of employment in Geneva, 36 months in other cantons).

Cross-border workers

Other professional or statutory situations:

International civil servants with a legitimation card D, E, F, and main residence abroad: Automatic rejection.
AVS/AI pensioners: Loan amounts are limited to five times the monthly pension.
Employees of their own company or self-employed individuals: Less than 3 years of activity or residence abroad leads to rejection.

2. Loan amount exceeding legal limits

The requested amount exceeds the legally defined limit based on your income and expenses? Your application will be automatically rejected.

Learn more about how budget calculations affect the potential loan amount.

Budget Calculation

3. Negative ZEK code

The ZEK (Central Office for Credit Information) records credit histories. A negative code (payment delays, financial problems, etc.) significantly reduces your chances of approval.

4. Poor credit scoring

Banks assess your financial reliability differently. Poor scoring can lead to rejection, even if basic requirements are met and the budget calculation is compliant.

ZEK and Scoring

How to obtain a private loan in Switzerland?

To learn more about the criteria for obtaining a loan in Switzerland, it’s important to understand that lenders consider factors such as age, employment status, and residency. Find out in detail how these rules influence your chances of obtaining a loan by visiting the linked page.

Lending Criteria

Consequences of a loan rejection

After a loan rejection, it is important to understand the potential consequences, particularly regarding the entry into the ZEK database and your future loan applications.

1. ZEK-entry

A rejection is recorded in the ZEK database for 6 months. If you go through a broker, the entry is only made if the application is submitted to a bank.

2. Multiple rejections

Three or more rejections make it more difficult to obtain future loans. A waiting period of at least 6 months is recommended.

3. Debt collections as a reason for rejection

If debt collections caused the rejection of your loan, you often have to wait more than 6 months before submitting a new application.

When to submit a new loan application

Before submitting a new loan application, it is crucial to identify and resolve the reasons for the initial rejection. If the issue is related to basic requirements, you can usually reapply after 3 months once the situation is corrected. However, if debt collections are the cause, a minimum waiting period of 6 months will be necessary.

Crédits Conseils: our services and commitments

Detailed analysis of your profile and creation of a complete application file
Calculating your budget to determine your credit capacity
Personalised advice throughout the process
Information about your rights, including the right of revocation ("cooling-off period") and early repayment
Information on insurance covering you in the event of job loss or health problems
Selecting the lender adapted best to your profile
Negotiating attractive interest rates
Absolute discretion: neither your spouse nor your employer will be informed of your loan request.

Increase your chances of acceptance with Crédits Conseils SA

In order for your credit application to be accepted by the banking institution that will receive your file, you therefore understand the importance of being advised to match the lender's scoring.

Thanks to our years of experience and the good relations we have with financial institutions, CC Crédits Conseils SA is familiar with the procedures of each financial institution as well as the criteria that influence up their scoring.

This is why we have a success rate above market average for the applications we file with the selected financial institutions.