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?
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?
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.
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.
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.
Three or more rejections make it more difficult to obtain future loans. A waiting period of at least 6 months is recommended.
If debt collections caused the rejection of your loan, you often have to wait more than 6 months before submitting a new 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.
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.
Calculation example
Loan of CHF 20'000. An effective annual interest rate between 4.9% and 10.95% and a term of 48 months generate total interest between CHF 2'018.10 and CHF 4'549.60. Term: 6-120 months; Maximum annual interest rate (including all credit charges) 10.95%. The granting of a loan is prohibited if it leads to the over-indebtedness of the consumer.(Art. 3 LCD)
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:
Basic requirements include age, financial situation, nationality, residence status, and professional situation.
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.
The ZEK (Central Office for Credit Information) records credit histories. A negative code (payment delays, financial problems, etc.) significantly reduces your chances of approval.
Banks assess your financial reliability differently. Poor scoring can lead to rejection, even if basic requirements are met and the budget calculation is compliant.
