Banks often reject loan applications for incomprehensible reasons, even if you meet the requirements they describe for a borrower. Sometimes the application is approved, but the terms are less favourable and unsuitable: a higher interest rate or a smaller amount than you wanted. To increase your chances of getting a favourable offer, keep the following points in mind.

Good credit history and high credit score

Banks assess their own risks, so they carefully analyse information about a potential borrower. It is important for them that the money would be returned, and on time. That is why it is necessary that your credit history is free of debts and arrears. All previously repaid and current credits and microloans are assessed. It would be advisable that you have fewer outstanding debts when applying for a new loan. Therefore, to increase your chances of getting a favourable loan, pay your existing debts on time and avoid late payments.

At this stage, it is better not to submit many applications to all credit organisations, as multiple rejections can worsen your credit history. Don’t worry, it can still be fixed, but you will have to be patient and spend a lot of time. There is only one way. You need to pay your existing debts on time, close your microloans on time, and then apply for new ones. After a certain time, banks will see that you are solvent and responsible. If you apply this scheme to loans, your credit history may improve a little faster as loans are granted in the short term.

If you have no credit history because you have never requested money from banks or financial institutions, this is also a disadvantage for them. They will have no way of assessing your ability to pay and honesty.

A credit score is presented in numerical form and consists of the scores of all previous contacts with lenders, products accepted and repayment behaviour. The higher the credit score, the better, but it is not the only determining criterion. Also important are the age, place of work and marital status of the borrower, the term of the loan and the purpose for which it is being purchased.

So check your credit score thoroughly. Creditors usually look at your credit score in order to understand your creditworthiness. Aim to have a good to excellent credit score to increase your chances of approval.

Improve your credit history. Make sure to pay your bills on time and reduce outstanding debt to improve your credit history. A positive credit history can make you a more attractive borrower.

Provide all the information you can

The more information you provide about yourself and your creditworthiness, the better. You can present not only a certificate of income from the organisation you work for, but also other documents confirming additional income (for example, from renting out real estate or registering as an individual entrepreneur).

Often the most favourable credit terms are offered when pledging movable or immovable property, as well as when making a down payment or attracting a co-borrower. This increases the chances of the application being approved.

It is very important to provide accurate and up-to-date information. Inaccurate information could lead to a denial of your application.

What to do if you haven’t got a loan?

Try to understand the situation and find out from the bank why your application was refused. In some cases, this information is not provided, so you can try to assess on your own what criteria negatively affected the bank’s decision. If it is not possible to correct these factors, you can apply to another credit organisation with more flexible requirements.

By following these steps, you can improve your chances of being approved for a personal loan and secure the financing you need.